Climbing the Ladder 5 - Reaching New Heights
Copyright© 2026 by Michael Loucks
Chapter 69: Profiting From Tragedy
Fiction Sex Story: Chapter 69: Profiting From Tragedy - Jonathan's business life is booming, but he's also suffering from yet another loss. While he's done his best to pick up the pieces of that sundered relationship, he can't help but feel responsible. However, where two close relationships have withered, another blooms. Violet has transitioned from a badly damaged girl to a vibrant woman. Will he continue to climb this ladder, or will there be another ladder to climb in his future? No matter what, the only direction he plans to go is up.
Caution: This Fiction Sex Story contains strong sexual content, including Ma/Fa Workplace
November 28, 1984, Chicago, Illinois
On Wednesday, the Fed cut its interest rate target by half a point, a significant move that telegraphed fairly rapid cuts for the next several months. With the Fed Funds rate sitting around 8.5%, the Prime Rate at 11.25%, and ten-year Treasuries currently yielding 11.5%, the pieces were in place for the stock market to break out of the doldrums.
That likely would not start in earnest until January, mainly due to the usual low volume around the Christmas-New Year's period, with traders closing out risky positions so they could vacation for a week. Once December options expired, money would begin flowing into the market at an accelerating pace, as bond holdings were reduced and the cash was dumped into equities.
"How do you want to proceed?" Jack asked when I went to see him on Wednesday afternoon.
"You tell me," I replied.
"We have the money from the four former Arrow Fund investors coming in. I think, at least for the moment, I'd dump that into S&P futures to see what opportunities we have after the market starts moving. There will be undervalued stocks we can snap up."
"A reasonable approach. I'd also like you to close out the rest of our Nikkei holdings and use the proceeds to buy JPY, covered with December put options. Use some of the money from the Arrow Fund investors to buy 200,000 December JPY calls."
"¥2,000,000,000?" Jack asked in surprise.
"First, what's the exchange rate?"
"Around ¥225 to the dollar."
"Right, so how much is that?"
"About the same size as the GBP move you made; well, about a million less. Actual forward contracts?"
"Yes. Cover them with married put options."
"I think I need to spend more time looking at currencies. This is out of the ordinary for you."
"It's a hedge against the US market, and if our projections are correct, it'll perform better than Treasuries. What would you do with precious metals?"
"I think, from everything you've said, long gold."
"Yes. Given our portfolio asset allocation guidelines, and the fact that we closed out our positions, 10,000 September 86 gold. Use a light hand for both the currency and precious metals moves. I'm OK if it takes into January, because we don't want to clue in the market by buying during the Christmas lull."
"FX will be doing the same thing, right?"
"Yes. They're already loading up on JPY and GBP. Both will strengthen into the end of the year. After that, well, my crystal ball isn't quite that good, but I believe the dollar will significantly weaken in 1986. We have plenty of time, though."
"What about Treasuries?"
"We have to hold them for the cash income for the pension fund payouts. They won't be a drag until they yield under 10%, and then we'll need to look at other options."
"OK," Jack agreed.
"Have you heard from Perry Bass?"
"I spoke to him, and I think we'll get some of his money. I figure a trip to Texas will seal the deal, and I saw on your calendar you plan to visit in late January."
"That is the plan, along with going to Cincinnati to see MTB. I'll figure out when to go to LA when CeCi is home. I want to coördinate with her so she's available when I see Ford, Jackson, and Finch, and the Hollywood guys, as well as get to San Francisco to see Sierra Nevada Re. I want you to handle the union pension funds and the other local clients."
"Including Hart-Lincoln?"
"Yes. I'll meet with Tom Hart, but you should handle the regular quarterly meeting with their partners. I want everyone to be comfortable with either of us. You'll come with to the remote clients at least once a year."
"Got it. I'll start making the calls."
"Thanks."
I returned to my office, and at the end of the day, Violet and I headed to her house for dinner, and then we went to class. After class, I walked her home, then returned to the condo where I spent two hours finishing my reading for my class, then watched CNN for twenty minutes before Chelsea and I went up to bed.
"Deanna asked if I would model for her," Chelsea said.
"What did you say?"
"That I wasn't sure because she wants to paint me nude for the show in New York."
That was an interesting development, as I had expected Deanna to show her abstract work alongside the Nuclear Family series.
"That's a decision you have to make for yourself," I said. "Did she suggest a pose?"
"She said it would be similar to The Birth of Venus, and when I didn't understand, she showed me a picture in one of her art textbooks."
"Well, your hair isn't quite long enough," I observed.
"I doubt I could grow it down past my waist," Chelsea replied. "The longest it's ever been is just below the tops of my shoulder blades, like now."
"What do you think?"
"I don't know that I could have so many people look at me naked."
"Have you seen Nuclear Family?" I asked.
"Today. I was shocked! You're really OK with her showing those in New York?"
"Yes."
"And you'd be OK with guys looking at a painting of me like that?"
"Unlike your dad and your pastor, I don't believe I own you, so my opinion is pretty much irrelevant," I replied. "It's whether or not you would be uncomfortable."
"I don't know."
"All I can say is think about it, and decide what's right for you. You're a beautiful girl with an incredibly sexy body, and you have nothing to be ashamed about."
Chelsea smiled, "You're welcome to check it out very closely, if you want to!"
"I do!" I declared, pulling her to me.
November 29, 1984, Chicago, Illinois
On Thursday, after a typical morning, I left the office just after 11:00am to meet Isabella and her best friend at Medici in Hyde Park. I saw Isabella waiting by the hostess stand with a girl who was about as opposite as could be in looks — where Isabella was tall, blonde, blue-eyed, and light-complected, her friend was shorter, with auburn hair and brown eyes. She looked like she was fifteen or sixteen, but Isabella had said they had graduated together, so I was sure Kaitlin was eighteen.
"Hi!" Isabella exclaimed when she saw me, giving me a tight hug and a peck on the lips.
"Can anyone do that?" her friend asked.
I nodded, and she hugged me, pressing her firm body against mine, then surprised me with a peck on the lips.
"This is Kaitlin Quinn," Isabella said. "My best friend since grade school."
"Nice to meet you," I said.
I asked the hostess for a table for three, and we were seated right away, as it was before the lunch rush. A waitress took our drink orders, and we reviewed the menus. When the waitress brought our soft drinks, we placed our orders.
"Are you at UofC, Kaitlin?" I asked.
"No. I decided not to go to college, at least not right away. I'm working as a secretary. Isabella says you're an investment analyst and stockbroker. That's pretty impressive because you're so young; well, you know, compared to what I think about stockbrokers."
"Thanks. Are you thinking about going to college at some point?"
"Maybe. I know a few people who took gap years, and it didn't hurt them."
"I think that's a reasonable plan," I replied. "I have a friend who did that, and she's planning to be an attorney. Another friend worked as a paralegal for three years before going to college for pre-law."
We chatted, and I had a picture of a girl who had ambition, but no plan, and who was unsure what she wanted to do with her life. I gently encouraged her to come up with a plan, and she was responsive. She had a winning smile and a positive attitude, and I enjoyed chatting with her. As we ate, I decided I'd honor Isabella's request, assuming she still wanted to have the threesome.
When we finished our meal, I paid the check and left a generous tip. The three of us went down the stairs to the lobby. Isabella gave me a tight hug and a quick peck, and Kaitlin followed suit.
"I'll call you later, OK?" Isabella said.
"Yes."
I walked to where I'd parked and headed back to the office. Isabella called that evening after dinner, and I wasn't surprised when she said Kaitlin was interested. I concurred, and after Isabella confirmed that Kaitlin was on the Pill, we agreed to meet for lunch at Bennigan's at 11:30am on Saturday.
November 30, 1984, Chicago, Illinois
On Friday, I had lunch with Thomas Hart at Gordon, a reservation that I'd obtained by slipping the maître d' $50 after my lunch with Andy Fastow. That largesse, which would be repeated, would guarantee me a table whenever I needed one. It was, in my mind, no different from the monthly envelope I gave to the doormen at the Hancock Center, or the perks I provided for my clients. It was, in the end, a cost of doing business.
"Kayleigh was delighted to see you on Saturday," Thomas said.
"And I, her," I replied. "We agreed to continue seeing each other when she's home."
"She mentioned that. Changing subjects, did the IRS ever close your audit?"
"Yes, though with the implied promise for round two next year."
"They do tend to become annoyed when they think they have you, but don't. Anything from the SEC?"
"All quiet on that front. I haven't made any trades that might attract their attention. I also keep meticulous notes about the source of any information, and if there's even a hint of a question, I clear it with our Compliance team. I've had to forego a few trades because I couldn't source the information from anyone except an insider."
"Keeping meticulous records is your best defense, both with the IRS and the SEC, so long as you aren't trying to pull a fast one on them, which I'm certain you aren't."
"I won't even smudge the lines, let alone cross them," I replied. "Can I pick your brain about something?"
"Of course."
We were interrupted by the waiter taking our orders.
"I had a client, an attorney, approach me for financing for a potential class action. The way he described it was, in effect, an investment, with the return being a fixed percentage of any settlement or award. I was disinclined because I couldn't calculate the risk, and when I spoke to Compliance, they outright forbade the transaction because it was nothing they had ever heard of, and they couldn't evaluate the risk or exposure."
"I've heard of attorneys doing that, though usually the funds come from the partnership. As an attorney, you need to be very careful because you cannot borrow money on behalf of a client, and there are strict rules about non-party funding of lawsuits. It can be done, but it's rare, and usually it's by an interest group, such as the ACLU, who provide pro bono legal services.
"I haven't looked into it, but I suspect you could structure it so that it was legal, and that you could assign part of the settlement or award to the person providing the funding, but, in the end, the court could tear up an agreement like that for a host of reasons, including fairness, State or Federal law, or an objection by the opposing party.
"You could have what appeared to be an ironclad contract, and the court could say that you could only receive your investment plus reasonable interest, rather than a percentage of the award, and you'd have a tough time defeating that order, and a tough time going after the attorney with whom you signed the contract."
"You just identified a risk I hadn't even considered."
"It's an untested area, and I could even see a judge throwing out a case where a non-party provided the funding if they weren't a relative or what's called a 'next friend' — someone who has some kind of personal relationship with the person filing suit. That mostly happens when the plaintiff is not competent to bring or manage the case — a minor, someone who is a ward of the state, or something similar. Or, as I mentioned, someone doing the work pro bono."
"Thanks. I'll actually mention that to Compliance in case someone else is approached."
"Personally, I'd steer clear of it until it's tested in court and someone with deep pockets and a lot of free time takes a case to the Supreme Court and we get a definitive ruling. I suspect, at some point, given the increasing cost of litigation, we'll see someone try to make a business of it, and they'll be the ones to test it in court. You should focus on all the other things that make us a ton of money!"
"Absolutely! I've turned down a few other opportunities because they struck me as either too good to be true or because the risk was unacceptable."
"Mind if I ask?"
"Securitized debt and interest rate swaps."
"I know about securitized debt because I have some money in Ginnie Maes, but what are interest rate swaps?"
"An interest rate swap involves exchanging one stream of interest payments for another to manage exposure to interest rate fluctuations or achieve better borrowing terms. Typically, this swap involves converting fixed-rate payments to floating rates or vice versa. As a hedge fund, we can purchase them to earn higher returns because our borrowing costs are low. For my fund, I can do better with traditional methods."
"I'd say your formula works, and as an investor, I'd prefer you didn't change it unless the market dictates an alternative strategy."
"I agree completely. I did make some sizable bets against the British pound and the Japanese yen, though within the limits of the asset allocation guidelines. I expect both to weaken against the dollar for a time, but then strengthen significantly. I have things set up to be able to swap my bets around the expected inflection point."
"Are you able to share how you make those determinations?"
"A series of complex computer models making use of historical data, along with paying close attention to current trade data and changes in policy. I'd be able to make more if others hadn't effectively come to the same conclusion around the same time. I wasn't first, but I was close enough that I'll make what I consider an acceptable return. Hedged, of course."
"I'm happy with the returns, so I'm not going to argue with your strategy, though, as I said, I appreciate you sticking with what works. How are things otherwise?"
"I'd say very good," I replied. "My daughter is healthy and growing like a weed. She talks, pulls herself up against the couch, and is seriously thinking about walking."
"They're wonderful at that age," Tom said. "I'm looking forward to great-grandchildren!"
"How long do you plan to continue working full-time? If you're willing to share."
"I'm targeting December of 1992. I'll be seventy, and that's a typical time for our partners to transition to part-time and handle only select cases. After that, it all depends on health. You're much younger, obviously, but do you have a timeframe?"
"Assuming I can continue beating the market, which is never a sure thing for any trader, I figure age forty-five is when I'll consider doing something else, though I'll trade my own account as a Family Office until I'm unable to for whatever reason. Twenty years is a LONG time in the industry, and that would give me twenty-five."
"How old is Noel Spurgeon?"
"Thirty-eight. I don't see him leaving the industry before he's in his fifties or even sixties. I expect I'll be out before he is."
"Do you have criteria, or is it just age?"
"You know the structure of the fund and my situation, so you know I already have more than enough to live a very comfortable life without any concerns, including doing pretty much anything I want to do. I like what I'm doing and find it both enjoyable and challenging. I suspect you feel the same way about the law."
Tom nodded, "I do. Tough cases are the most interesting, but take the most out of you, and it's more challenging at sixty-two than it was at thirty-two. I won't claim that attorneys need the stamina of surgeons, but mental exertion is tiring, and as you get older, it's more tiring."
"My friend, the ER doc, has the most stressful job I know; neither you nor I work thirty-six-hour shifts! That said, I agree that mental exertion is tiring, and stress takes its toll as well. Right now, at twenty-two, I eat it up; I think it'll be different at forty-five. In that way, I don't think I'm built the same way Noel Spurgeon or Murray Matheson are."
"Which is a recipe for them to have heart attacks," Tom observed.
"Something I certainly want to avoid!"
The waiter brought our meals, and we began eating. We chatted during the meal, and I picked up a few hints that Tom would be very, very happy if Kayleigh and I got together, but given my thinking about marriage, that was unlikely to happen. That said, Kayleigh had been correct that improbable did not equal impossible, though with Violet in the picture, the probability was extremely low. When we finished our lunch, I paid the check, and Tom and I parted, each returning to our own office.
That evening, Violet and I went out with Jack, Kristy, and the Boys, with one addition — Ken, who was Rick's new boyfriend. We had dinner at Star of Siam, then went to Buddy Guy's, and, as usual, Violet came home with me.
December 1, 1984, Chicago, Illinois
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