Thropp had begun the meeting. “Welcome, everyone.” He nodded toward the man and woman. “Rich, Andrea, thanks for taking the time to come down.” He rubbed his hands together. “Well, now, we’re all here to listen to Peter tell us about his new idea. Peter has been quite mysterious about it, playing it close to the vest, so I can’t tell you much about what he’s cooked up. He tells me it has the potential to be something very big. I’d usually want to spend some time going over a presentation like this myself, but Peter was so insistent on having a meeting that I said okay just to get him off my back!” Mild chuckles.
Thropp turned to Peter with a smile and gestured to him. “Go ahead, Peter,” he said. “It’s your meeting.”
This isn’t right, Peter thought. His heart began to pound. “Thank you, Gregg,” he said with a quaver.
What he had to say was very preliminary, he explained, and he had only a few slides to show. Then he had gone through it all: What is the greatest source of wealth in the country? The equity people have in their houses. Over the past twenty years, the debt on people’s houses had been securitized, providing a great benefit to borrowers and investors—and the firms in the middle. In Peter’s view, the mortgage market looked shaky. Would there be a way of securitizing home equity? Say a homeowner could sell some of the equity in his house. There could be individual transactions (after all, each mortgage is individual), and you could bundle up those equity stakes just as in the mortgage-backed market. Think of the advantages: home buyers would have an alternative to debt; homeowners could pay down debt and benefit from a rise in prices without selling their houses or borrowing more; they could diversify, buying equity in houses in different markets from their own. With the home equity securities would come hedging opportunities: people could short their own houses if they were in a bubble, and there would be any number of derivative plays. It would spread risk around, make the market more efficient. Then imagine the money you could make if you were the first to come up with such a product.
Peter liked his idea even though it was at only the fantasy stage, and as he spoke he couldn’t help but become more enthusiastic about it; this excitement combined with his anxiety made for a great agitation within him, as he allowed himself to think that he might possibly have carried others along.
He hadn’t. After he finished, saying, “Well, that’s about it. As I mentioned, it’s all very preliminary,” there was silence. A cough. A rustle of papers. Some taps of a pencil. Another cough.
Thropp spread out his hands. “Reactions? Rajandran?”
Rajandran was one of Thropp’s liege men, and Peter didn’t know him well; he spoke with great precision, polishing every phoneme. “Well, I am sure we all agree that Peter has some interesting ideas.” He smiled. It was amazing how white his teeth were. “But it seems to me that he’s missed the boat on this one.” Rajandran rattled on for several minutes, enumerating all the reasons everything Peter had said was absurd. The basic premise was nonsensical. The problems with execution would be horrendous. Peter completely misunderstood the market, the simplest model would show that. And on and on. Someone—some mysterious person—had obviously briefed Rajandran on what Peter was going to say and then instructed him to prepare an informed rebuttal. Peter glanced at Thropp, who was rocking in his chair and trying to suppress a smirk. Peter thought he could hear him humming.
As soon as Rajandran finished, before Peter could even begin to respond, someone else piped up. “You know, of course, Peter, that a futures market for housing prices was tried in London and was a complete disaster.” Another case of advance research!
“Yes,” Peter said, “but, really, there was a marketing problem—”
“Marketing problem!” his antagonist said sarcastically. “You want the firm to spend billions of dollars to redo the economics of housing—and you think a few ads will make the difference?” A snicker traveled the room.
A third henchman joined in. “What about the owner’s balance sheet?”
And then each member of the trio simply began to fire away: “Look at the piss-poor reaction to the Chicago Merc product.” “Wouldn’t insurance make more sense?” “Is it stochastic?”
Peter tried to answer (“… preliminary, something that would need to be looked at, I can’t be sure, um, uh …”). And then he just sat there listening, trying to look unfazed despite his red face and the sweat trickling down from his armpits. Finally, the bloodlust of his tormentors seemed to have been sated.
“Anyone else?” Thropp asked. When no one spoke, he turned to Peter. “Well, Champ, I guess you’re a few bricks shy of a load.”
The man and woman from Upstairs had whispered to each other and gotten out of their seats and were now leaving. They gave a nod to Thropp, who said, “Rich, Andrea, we’ll try to give you a better show next time.”
Peter’s head throbbed. He felt rage and shame. He knew that he was putrefying before everyone’s eyes. A nauseous odor was beginning to arise from him, the putrescent stench of failure. From this moment on, people would slip by him quickly in the halls; they would respond to his phone messages and e-mails in the most perfunctory way; they would edge toward the walls when they found themselves in the same room with him. Even if some of them knew that Peter had been set up, they would treat him as one infected with the plague; it was enough that somebody very senior had wanted to lay a trap for him and that he had fallen into it.
“Okay, everybody,” Thropp was saying. “That’s it.” Then he turned to Peter with hooded, menacing eyes. “My office. Five minutes.”
When Peter presented himself at Thropp’s office, he found Thropp rocking in his chair with his folded hands on his stomach; he wore gold cuff links the size of quarters.
“Ah, Russell, come in,” he said.
Peter stood in front of the desk. Thropp didn’t invite him to sit.
“Quite an interesting meeting,” Thropp said.
Peter nodded.
“Yes, quite interesting,” Thropp said. “Tell me, Russell, do you like walnuts?”
There was a large bowl of walnuts sitting on Thropp’s desk, but this non sequitur bewildered Peter. He shrugged.
“Go ahead and pick out a couple,” said Thropp.
Indifferently, Peter picked up two walnuts.
“Take a look at them.”
Peter did so.
“Now give them to me,” Thropp said.
Peter handed the walnuts to Thropp, who looked at them for a moment while rolling them around in his right hand.
“Do you know what these are?” Thropp asked.
Peter shook his head.
“These are your nuts, Russell,” Thropp brayed. Still holding the walnuts in his right hand, he squeezed them so hard that his fingers turned white. “And I’ve got ’em, right here!” Then he leaned back and laughed. “Oh, it was wonderful!” he said, laughing even harder. “‘Home equity securities!’” He could hardly speak. “’Home equity securities!’” Stretching out his thumb and pinkie, he held his hand up to his head like a phone and put on a deep voice. “‘Hello, I’d like to buy one hundred shares of 487 Maple Drive.’” Thropp was laughing so hard now that tears came to his eyes. “And the look on your face when Raj got going! Oh God! Beautiful!” He laughed and laughed and wiped his eyes. “Oh, it was wonderful,” he said finally, as his laughter subsided in a sigh.
“I’m happy to have been able