From the arc of sweat I see spreading beneath Ballsbridge’s Thomas Pink shirt, I assume he’s losing money. He can’t sit still, taps his computer mercilessly, and has several graphs on his screen with dramatic downward slopes.
Marcus is big in every area of his body. His fingers are so wide they mistakenly press two computer keys at once, the necks of his shirts are custom widths, and the thigh areas of his slacks strain from the muscles beneath. He was a defensive lineman at the University of Texas and it shows. While I’m tempted to turn his fan off and tell Naked Girl she wouldn’t be so cold if she actually wore clothes to work, I put a hard drive on my papers to protect them from the hurricane behind me and keep my lips together.
My papers are more lists of collateralized debt obligations, the jargon-laden stuff that Henry has been buying. I’ve been getting Kathryn to tutor me on these things on slow afternoons like this.
My heels clack across the granite lobby to the elevator as I head to the eleventh floor, where the goddess of mortgages works. Kathryn is a senior managing director, an intense, robotic human frightening in her perfection and beauty who generates stratospheric commissions. Bond Girl sits in a central spot amid the chaotic row of attached desks, and exudes an almost ethereal calm. Her nails are never chipped, there’s never a paper on her desk, her garbage can has none of the banana-peeled, coffee-cupped, ripped-ticket remnants that most mortals slough off. Kathryn’s garbage remains mysteriously nonexistent.
Dressing sensibly in St. John knit suits and low-heeled pumps, she’s the most senior woman in bond land and the only person the traders on this rowdy desk seem afraid of.
As I walk toward her, I note that she’s the only employee on this floor of 180 people who never removes her blazer. She stares straight at the triply stacked screens on her desk even when I’m within inches of her. I’m still not comfortable just plopping next to her. I wait to be acknowledged.
I’m not.
I roll a chair beside her and sit myself down, busting into her space. She seems to be meditating on the intricate rows of numbers in front of her with the devotion of a nun.
“Hey, Kathryn,” I say, and wait.
Each year, Feagin has a meeting for women who are managing directors and senior managing directors. Out of 13,566 employees worldwide, we are a 1 percent club. Kathryn Peterson has met me at these meetings and yet every time I’ve come to visit her here, and even though we’ve been having lots of phone time together putting merchandise up for Henry, she still gazes over my shoulder as if she’s trying to place me.
I tell her again that I want to speak more intelligently about the mortgage-backed securities market. I tell her that some of these synthetic products that roll across my desk lately make me feel like a three-card monte guy in Times Square. She doesn’t smile or laugh or turn. She simply tolerates me because together we’re finding a windfall with Cheetah and we need each other to keep this going.
“Tell me what you know, Isabelle,” she says deliberately. This is how our sessions always begin. Like a shrink trying to get the conversation going, figuring out where to start, she waits.
“This is what I know,” I say. “Everyone who has ever borrowed money has a credit score. The range goes from three hundred to eight-fifty. If someone’s late to pay a debt the score falls. Once below six-twenty you’re considered a riskier person to lend to, you’ve become subprime. Any mortgage issued to you is a subprime mortgage.”
“Well, yes?” Kathryn murmurs, unimpressed.
I interpret this comment as, “Duhhh.”
So I continue, “The interest rate on that mortgage will be less attractive or higher than a rate available to a person with good credit. Most risky mortgages balloon, making their payback more expensive. If the borrower can’t pay the inflated amount she’ll have to refinance the house or sell it. Even though many banks lend to people who can’t possibly pay them back, the banks figure the value of the real estate will rise, so if they stop getting paid back, they foreclose, leaving them with a property that’s gone up in value. That makes the banks’ risk minimal.” I pause for air.
Bond Girl stifles a yawn and keeps her eyes forward so I plug onward, conversing to the side of her head. “To get investors involved and to lower the risk to the banks even further, Freddie Mac designed a type of bond called a CMO, a collateralized mortgage obligation, which is a pooled piece of debt. The mortgages themselves are the collateral. These bonds are put into tranches or categories that are rated based on how risky the underlying debt is.”