“We all should have supported you. We were just in shock.”
“Well, thanks for nothing,” I say, “because in the end Metis was my only friend. Metis spoke up even if she did so while hiding behind an untraceable server. You know what’s weird?” I ask Kathryn. “I miss her. I miss those spunky emails. I liked thinking there was some woman in a far-off office whom I could be friends with.”
“Don’t get weird on me.”
“I’m only a little weird, but anyway, I want to talk to you about something else.”
Kathryn shrugs. “I have to be at yoga at seven p.m.”
“I’ll walk you to yoga.”
“I do yoga at home.”
“I’ll walk you home,” I say, not bothering to check in with Bruce about the time.
There’s a small pause while she considers this before answering.
“Okay,” she says while sighing in a way that makes me think she feels sorry for me.
I’m not sure what type of comfort I think I’m going to get from Kathryn, but there’s something wise about her and I want some of that to rub onto me.
Within minutes we’re walking all the way down from Midtown to SoHo, giving us plenty of time to talk.
“So”—I cleared my throat—“When I spoke with Henry Wilkins today, um . . .”
“I know what you’re going to say.”
“What am I going to say?” I ask shakily.
“You’re going to tell me he’s freaked out about the market,” she says coolly as she pulls up the collar of her cashmere coat. She looks regal while I look like her disorganized Sherpa.
“It’s not just the stock market, Kathryn. It’s the entire United States financial system, which is essentially the world financial system.”
“Calm yourself,” she practically hisses at me. Kathryn stops and glances around us as if she wants to see if anyone heard what I just said.
“What you meant to say is that Wilkins feels some banks may fail,” she says evenly.
“It’s possible, right?”
Kathryn takes a moment before responding. “The Fed will open the discount window and lend us money. They’d never let us fail because every hedge fund, every mutual fund, every granny in the land would put a run on the banks. Nobody wants a banking panic and that’s what we’d have. Worst case is government intervention.”
Kathryn acts casual but I can tell she’s thought this through. Just like at work, she never looks my way, always forward, as if she’s containing herself. All the way from our offices, with only the switching walk and don’t walk signals slowing us, we talk through every possible scenario of doom.
“The discount window is for commercial banks, not investment banks, and I don’t think the government is about to bail out a bunch of rich people,” I say.
“That’ll change if something terrible happens. It’ll change in a nanosecond,” Kathryn answers calmly.
“Still. Henry’s pretty confident Feagin, Bear Stearns, and even Lehman Brothers are looking for someone to buy them. He thinks we aren’t able to go it alone anymore, that we’re getting so many requests for cash we’re running out of money. He thinks Morgan Stanley could fail.”
“That could be true,” she says, adjusting her leather gloves just so, and then she is silent while she thinks. “By nature that Wilkins guy runs extremely hot and cold. Are you sure he isn’t short the stock?” She stops to take a good look at me, as if she suspects something about him. “People are making a lot of money from our stock going down. It wouldn’t surprise me if Henry is one of them.”
I think about this. What if Henry had a short position in Feagin Dixon stock? What if he were actually helping to create this doom scenario by scaring people like me to sell into the panic, sending the stock down and making him even more money?
Kathryn has moved on in her thoughts. “Worst-case scenario is Feagin Dixon finds a buyer and life goes on,” she says like she’s convincing herself of this.
“But whether or not the rumors are true, our stock is crashing,” I note.
“It’s short sellers and dumb money that’s selling into this. It’s panic. Buy on the weakness.”
“Yeah, but it doesn’t feel dumb.”
Dumb money is arrogant street lingo referring to the individual investor, the lemming, and the uneducated in all matters financial. If Average Joe is selling stocks, it’s probably a good time to buy.
“But this feels smart. It’s the hedge funds that are shorting the life out of the financial stocks. They can make this disaster happen by making the individual so frightened she’ll run to liquidate her retirement account. This disaster can be self-fulfilling and could take all of us down with it.”
“So how can this be something you control in any way? Why worry about it?” Kathryn asks in a mantralike voice, as if she’s in a trance.