After his chastening session with Kathy that Monday morning, Larry wandered out of the orientation building a little dazed and a little proud: he had managed to lose his dignity. He had stood naked in front of Kathy and not flushed. He’d given her back the three hundred dollars and not felt a fool – or rather felt like a fool but also felt like a fool for feeling a fool. He found himself looking to see if Rick had yet returned his car, but saw no sign of it. Then, with a sudden rush of anxiety, he realized the markets were open and were racing off in every direction without him. He had to phone Jeff.
With the cellular phone in his car not an option, he’d have to use the pay phone in the orientation lobby, which annoyed him considerably since it had very little privacy. He hurried back in and soon huddled himself in a corner, with his back to the room, and called Jeff.
He was still a little distracted by the session with Kathy so it took a little while before some of the things Jeff was telling him finally sunk in.
‘What the fuck are you talking about!?’ Larry said after Jeff had presented his new recommendations and Larry had finally grasped them. ‘We can’t go short that much oil!!’
‘The price is way overvalued,’ Jeff insisted. He was also hunkered down – in his cubicle at BB&P peering out at the other brokers and traders as if each one was a foreign spy. Sweat was pouring from all the usual pores and several that hadn’t been used since adolescence. He had just received a new inside tip from X, the biggest ever, but couldn’t tell Larry. ‘The market’s way overbought. I figure the President is bound to do something after the election that he’s been hiding before the election. That’s the political process. Almost any news that doesn’t make it look like war for certain is bound to lead to a sell-off.’
Then how come none of the other traders has figured this out,’ Larry barked into the phone, trying to shout into the corner so that his voice would be muffled for the half-dozen others milling in the room behind him. He was wondering what had gotten into Jeff this time. Until two months ago. Jeff had never had a risky idea in his life, or if he had, he’d kept it carefully to himself. ‘All our indicators are still on buy signals.’ Larry continued. ‘How can we justify suddenly selling?’
‘The market is overbought,’ said Jeff desperately.
‘So what!? It can stay overbought for weeks. Let it sell off and trigger some sell signals, then we can talk about going short.’
‘But you used to like to sell overbought markets!’ Jeff persisted.
‘That was before I’d taken several baths because the overbought markets kept going up and up and up.’ hissed Larry, shuffling back and forth in the corner as far as the phone’s short cord would permit and feeling caged.
Jeff cradled his phone closer to his cheek and crouched down even lower in his chair. He’d already gotten Larry to agree to cover shorts in the stock market and to go short a few gold contracts, but the key to it all was oil, going short oil. After they’d exchanged code words X had told him that a few days after the election the President was going to announce a new peace initiative, one that would have a credibility that would at least for a moment make people think that war would be avoided. If this happened, the price of oil, inflated by war scares, might fall 20 or 30 per cent in a day! Fortunes would be made! It was a futures trader’s wet dream! Larry simply didn’t understand that the Gods didn’t like people who thought that the future was going to remain like the past. The Gods liked gamblers who believed only in luck and the Gods and cheating.
‘Look,’ Jeff finally said, lowering his voice. ‘I’ve got a friend in the State Department.’
Larry, who had been staring out unseeing into the room and nervously scratching his back against the phone box, now froze in that position.
‘You’ve got a friend in the Slate Department,’ he said evenly.
‘A fraternity brother,’ said Jeff, deciding that if cheating was all right, lying must be too. ‘I was at a party with him over the weekend. After he’d had a lot to drink, he let out that … well, something that next week – after the election – will make the price of oil fall.’
For Larry, who didn’t yet share Jeff’s insight into why insider trading was moral, had to think about this. Strictly speaking, acting on information about some change of government policy that had not yet been announced did not constitute insider trading. For one thing there was normally no dear or necessary market play based on some vague government policy change. State Department leaks were not part of the Securities and Exchange Commission’s mandate, the SEC figuring that such leaks were so common, and spread so widely, that ‘insiders’ constituted half of the investment community. Also, thought Larry, a drunken rumour was good luck, not insider trading. Even he would trade on some unpremeditated, gratuitous, but reliable bit of drunken insider information. It was paying for information, or trading such inside information in an unauthorized way, that was clearly wrong.
‘May I ask what that something is that’s going to make the price of oil fall?’ Larry finally asked.
‘A peace initiative,’ Jeff mumbled.
Well, yes, that would do it.
‘I see.’
‘If my friend’s right,’ said Jeff, ‘the profits will be enormous.’
‘I would say so,’ said Larry. ‘Did your hunch about the T-Bonds come from this same guy?’ he suddenly asked.
Jeff’s body began running in all directions at once, which meant his teeth gritted, eyes bulged, face twitched, hands quivered and sweat glands, all two million of them, put in overtime.
‘No, no,’ he answered. ‘This guy is State Department. He doesn’t know beans about economics or bonds. He put all his money in condominiums.’
This last statement was a masterstroke, the sort of seemingly trivial detail that makes the liar’s story ring absolutely true. On Wall Street in the early 1990s anyone who had put all their money into condominiums was clearly a complete ass – as opposed to the partial asses that everyone else was – except me and thee.
‘OK,’ said Larry. ‘We go short two hundred December oil contracts – gradually, today and Wednesday, assuming the President will wait a decent day or two before telling the public what he wouldn’t tell them during the election campaign. Put the stop … about fifty cents above the market. Let’s see if we can make more off drunks than we can from ten years of experience and education.’
Jeff dared to smile.
‘That’s exactly it.’ he said. ‘I think we can.’