Chapter 7 — Diversification

_August 20, 1983, Chicago, Illinois_

{psc} "Do you have that exam every time you see a doctor?" I asked Bianca when we left the Doctor Wisniewski's office.

"You mean the gynecological exam? Once a year, since I lost my virginity. They don't do Pap smears or internal exams until a girl has sex for the first time."

"That would imply cervical cancer is caused by sex," I said.

"I honestly don't know about that, but I'm sure it has to do with the taboo of violating a girl's virginity."

"I suppose that makes sense, though you would think medicine would ignore those taboos."

"That makes sense from a purely medical perspective, but there are a lot of girls who would freak out that kind of exam if they were virgins. And the patient's views have to be taken into account, even if it doesn't necessarily make sense. And logic doesn't override taboos or religion for most people."

"You know me," I replied. "I'm guided by logic."

"Bullshit!" Bianca protested. "Getting married to Keiko last weekend had zero to do with logic!"

"Actually, it was completely logical." I countered. "I love her and want to spend my life with her, so the logical thing to do was to ask her to marry me. Once I'd done that, we scheduled a wedding date, but given Keiko's health, it was logical to get married right away so we didn't have to contend with conflicts with her treatment."

"Love isn't logical!"

I chuckled, "That wasn't what you said! You said what I did last weekend was illogical!"

"OK, Greg!"

"Greg?"

"Brady! He did a whole thing with his dad about exact words. It had to do with driving a car versus driving the Brady's car."

"I must have missed that episode of _The Brady Bunch_! Back to the prenatal exam, Juliette was exactly right about the vitamins and the folic acid."

Instead of heading home, we went to Jewel to do the weekly shopping, stopped at the dry cleaner, and then headed home, where Dustin, Archie, Costas, and Trevor were setting up for the bachelor party. Bianca and I put the groceries away, I hung my suits in my closet, then went to the Japanese room to spend time with Keiko before the rest of Jack's and my friends arrived.

"How are Bianca and the baby?" Keiko asked.

"So far, so good," I replied. "No ultrasound, but Bianca's vitals are good, they drew blood, and performed an exam. She just needs to eat a balanced diet, do low-impact exercises, take her vitamins and folic acid, and avoid alcohol."

"Good! I'll remind her to be very careful to not touch me or any of my clothes or sheets or anything because that could harm the baby."

"She did mention your chemo to the doctor today, and the doctor said the same thing. Bianca's also supposed to avoid smoke, and fortunately, nobody on the FX team smokes in the office."

"Your boss in the mailroom did, right?"

"Cigars, until his cardiologist made him quit, but he only smoked in his office, not in the mailroom. Does anyone in your family smoke?"

"No. My dad did as a teenager, but my mom made him quit before she'd kiss him. He obviously wanted her badly enough to quit smoking! Did you ever try smoking? Or pot?"

"No. I wasn't interested, and even if I had been, I didn't have money to literally burn! I see no point in taking up smoking cigars, even though it seems to be a thing all traders do. Whisky is really my only vice."

"Besides girls!" Keiko teased. "Fortunately for me! And even more fortunate that you gave up that vice except for me!"

"And I happily did so."

"You guys are mostly staying outside, right?"

"Yes. Nobody will bother you in this room. Is everything set for tomorrow with the girls?"

"Yes," Keiko replied. "You and Jack are going to the Cubs game tomorrow, right?"

"Yes. We don't want to crash your bridal shower. Glen, Dustin, and Archie are joining us."

"Are you telling the guys we're married today?"

"Yes," I replied. "They'll understand why we did what we did. And so will the girls. Is Monday's plan still the same?"

"Kristy will take me to the hospital before class, my mom and grandmother will visit, and you'll pick me up. That's set for all five days. Do you still plan to take a long lunch on Tuesday and Thursday and come see me?"

"Yes. I'd skip going to the gym this week, but you insisted I not do that."

"Remember what we talked about."

"I remember. That's why I'm doing what you asked me to do."

"You're taking great care of me, Jonathan," Keiko said. "And I very much appreciate it. It's obvious you love me, but you also need to focus on work and stay in good shape. You're going to miss time when we're in Rochester, so you need to be at work now."

"I know," I replied. "That doesn't make it easier."

"Jonathan," Jack said from the door to the Japanese room, "our friends are starting to arrive."

I kissed Keiko, then followed Jack into the backyard. I was very happy that both Tom and Stuart could make it, as I hadn't seen Tom very often since he'd married. When I greeted Stuart, he pulled me aside.

"Tom and Maria separated," he said quietly.

"That sucks," I observed. "Is it something that can be solved?"

"I can't share what he's told me privately," Stuart replied. "But I'd say there isn't much chance of reconciliation."

"Bummer."

We rejoined the other guests, and Jack introduced me to several friends from High School, as well as his brother and a cousin. From my perspective, the only downside of the bachelor party was that my female friends weren't able to attend. Most of them, including Marcia, Violet, Bev, and Beth, would be at Keiko's and Kristy's joint wedding shower.

Once everyone had arrived, and the grill was on, I stepped up onto the deck and called out for everyone's attention.

"I have an announcement to make," I said. "As most of you are aware, Keiko will need a bone marrow transplant. Because the availability of a suitable donor is unpredictable, it might be that she's in the hospital on October 8th. We're still planning our Shinto ceremony at Chicago Botanic Garden that day, but out of an abundance of caution, Keiko and I were married by a judge last Saturday."

After a few seconds of stunned silence, my friends applauded and cheered, and I received several hearty handshakes and claps on the back. None of the guys questioned my decision, though I had some good-natured ribbing from Stuart about tying myself down when I had so many gorgeous young women interested in me. He was a guy who I felt would never marry or even date exclusively, something I couldn't personally contemplate.

We had a great time stuffing ourselves with brats, burgers, and other food, washing it down with beer and pop. Just before the party broke up, Stuart brought out a bottle of _The Glenlivet_, a single malt Scotch whisky. and everyone shared a toast to Jack and me. Following the toast, most of our friends left, though Dustin and Archie stayed to help clean up.

Because I had been with the guys and outside all day, I showered before getting into bed with Keiko.

"Did you have a good day?" she asked.

"Absolutely," I said, as she snuggled close.

I reached over, turned out the light, and my wife and I quickly fell asleep in each other's arms.

_August 21, 1983, Chicago, Illinois_

On Sunday morning, when I turned on CNN Headline News, I was greeted with a report of the assassination of Benigno 'Ninoy' Aquino Jr., an important opposition figure in the Philippines. He had been shot immediately after disembarking from his plane on his first visit following an exile in the United States.

That news convinced me that my analysis of the Philippine peso was correct, and that the puts I'd purchased at the end of May would pay off handsomely. I made a note to call Rich at Spurgeon early in the evening and have him extend my short position as well as buy November puts, if the price was right. I contemplated whether I should call Mr. Matheson, given I'd been predicting devaluation for months, and decided it was better safe than sorry.

"It's goddamned early!" he growled when he answered the phone, clearly having been woken by it.

"It's Kane," I said. "Benigno Aquino was assassinated in Manila. I plan to call Rich as soon as he's in the office to extend my position and buy November put options."

"Fuck that!" Murray Matheson growled. "Let me call around and see if I can find someone to take those trades right now. How much?"

"$20 million," I said.

"Options, not straight puts, right?"

"I can't take the risk," I replied. "I'll pay the extra bips for insurance."

"OK. I'll piggyback that on my move, which will be a massive short combined with put options. How sure are you for November?"

"I am not uncertain," I replied, using my code phrase for being as sure as I could be.

"Let me get on the phone; thanks for the call."

"You're welcome."

He hung up without saying 'goodbye', which was his usual style. If I was right, and I was sure I was, I'd theoretically make something on the order of $4,000,000, a return of around 20%, minus the cost of the put options, which were already in the money based on a 7% devaluation in June. I expected the next one to be at least 20%. If things played out the way I expected, even with doing nothing else for the rest of the year, I'd have a 29% return on my fund. By my calculations, the DOW and NASDAQ would return around 20%, so I was in very good shape.

"How much money did you just make?" Keiko asked.

"None," I replied. "The options are for November, so that's when I'll settle."

"How does that work?"

"I buy Philippine pesos at the market, then deliver them in exchange for dollars. If my counterparty played it right, he insured himself by shorting the peso or by using a mix of options."

"Everyone can't make money," Keiko observed. "Who loses?"

"Anyone holding accounts denominated in Philippine pesos or who has contracts for imports denominated in dollars or a European currency. Or, put simply, the Philippine people."

"And you're OK with that?"

"I didn't do it to them," I replied. "Ferdinand Marcos did. I'm simply taking advantage of his mishandling of the economy, and, though I obviously can't prove it, assassinating his main rival. Fundamentally, if a country raises its financial risk profile, people do not trust its currency, which causes fluctuations in exchange rates. A country can defend against that by having a strong central bank with significant reserves and a willingness to raise interest rates; the Philippines have neither, and it's the fault of their government."

"A dictator, right?"

"Yes. And, if you look at what the financial markets are doing, they are punishing Marcos for being, please excuse my using this word, an asshole dictator. At some point, things will be so bad in the Philippines that the people will rebel and Marcos will be exiled, or, more likely, killed. But that's up to the people of the Philippines, much as it was the people of Iran."

"Wait! You support the Iranian government?"

"Hell no! They traded one dictator for another, and one with religious motivation. But they rose up against the Shah, which they should have done. Unfortunately, things got worse, not better, similar to Hungary in 1956 and Czechoslovakia in 1968. Revolutions are often ugly, with ugly results. The US is an anomaly compared to the Russian Revolution, the French Revolution, the English Civil War, the Spanish Civil War, and many others, which resulted in some form of autocracy."

"So revolutions don't work?"

"Often it's out of the frying pan and into the fire. But, we do know it's possible, from our own experience. Hopefully, others will follow that example, rather than the more common negative ones."

"Back to my question — how much _could_ you make?"

"It depends on the devaluation, which I'm guessing will be around 20%. That would net my fund around $4,000,000, less the cost of the options, which is a few percent. They already devalued by 7% in June, so my options are in the money, that is, profitable."

"You used a word I haven't heard before — 'bips'. What is that?"

"A 'bip' is a basis point, or a tenth of a percent. Basically, it's an additional cost for me having the option to sell or not sell, with the buyer required to complete the transaction if I choose to exercise the option. I am, in effect, paying for the right to force him to make the deal if I want to, but not have the right to force me to make the deal.

"Mr. Matheson is going to use straight put options, which means he agrees to complete the transaction no matter what. By not paying what amounts to an insurance premium, he makes a bit more money. And given he's likely to take a position in the range of half-a-billion dollars, half a percent is a big deal!"

"I'm missing something. If you have the Philippine pesos to sell, didn't you buy them at the higher rate?"

"No. I don't own a single Philippine peso. The contract says I have to deliver pesos at the end of November. I can buy them at any time prior to the day the contract settles. The contract prices are predictions of the future, and I predicted a much larger drop than the one in June, which is why I bought contracts that expire at the end of November. Those contracts had factored in a devaluation of about 5%, so I've only made about 2% so far. My overall profit will depend on the price Mr. Matheson can negotiate before the markets open."

"How much of that $4,000,000 is actually ours?"

"When it all shakes out, about $50,000, but that has to stay in the fund as 'carried interest', or I'd end up paying half of it in taxes."

"And that's over and above your salary and bonus, right?"

"Yes. Mr. Matheson will likely make $2,000,000 in salary, bonus, and commissions this year, and his carried interest is something around $50,000,000 total."

"How does he get that out?"

"He can take it out, he just has to pay taxes on it. There are strategies to reduce taxes, mainly having to do with long-term capital gains. He'll likely cash out completely when he retires, and I'd wager he'll wind up with something on the order of $100,000,000."

"Those numbers are mind-boggling! Keiko declared.

"I know! When Spurgeon finally decides to get out of the game, he's likely to have north of $600,000,000 in total assets. And that will be a VERY interesting situation, because he has to find the right person to run the firm, or investors will move their money away from Spurgeon, and with less capital, there is less opportunity for gains."

"What do you do with that kind of money?"

"Whatever you want!"

After breakfast, I helped Bianca and Juliette prepare for the bridal shower, and at 10:30am, Jack and I left the house to head to Wrigley Field for the Cubs game against the Braves. We met Glen, Dustin, and Archie outside the ballpark, then went in, taking our seats in the bleachers.

The game was wild, with the Braves scoring six runs in the top of the first, chasing Dick Ruthven from the mound. It wasn't all Ruthven's fault, though, as the Cubs made three errors which resulted in three un-earned runs. The Cubs got one back via a lead-off home run by Thad Bosley, then scored a run in the second inning and three in the third inning to make it 6–5.

Unfortunately, with the Braves scored single runs in the fourth and fifth innings, putting them up by 3, while the Cubs rallied back with 2 in the bottom of the fifth to make the score 8–7. Another run for the Braves in the sixth, and two in the seventh, put the game out of reach, at 11—7. The Cubs did score single runs in the seventh and eighth, but it wasn't enough, and they lost 11–9.

"Those three errors sank them in the first inning," Glen observed as the five of us left the stadium.

"Five different Cubs pitchers," Archie observed, "and the only one who didn't give up a run was Proly, who only faced one batter."

"This isn't their year," I said with a smirk.

"What year IS?" Dustin asked, disgustedly. "Seventy-five years since the last World Championship, and no hope in sight! At least the Sox are having a decent year!"

I had plans with Keiko, so while the others had pizza at a small pizzeria in Wrigleyville, I headed home so that Keiko and I could join our families at the restaurant on the 95th floor of the Hancock Center. My grandparents had been invited, but despite encouragement from Alex and Wendy, they had chosen not to attend. We had a great time, though Keiko and I didn't stay late as she tired very easily.

_August 22, 1983, Chicago, Illinois_

On Monday morning, I left the house early so I would be able to leave the office at 3:30pm to take Keiko home from the hospital.

"Morning Rich!" I said when I walked in. "How is the Philippine peso?"

"Down a bit; Mr. Matheson made a number of private trades, and I made some on the market on his behalf. Others are piling on, as you would expect."

"Anything else major happen in the overseas markets?"

"No. Just some minor fluctuations in regional currencies, as you'd expect in a situation such as this. but nothing worth trying to eke out a few bips. Europe is calm so far, and there wasn't much movement in precious metals since Friday's London fix."

"Thanks."

I performed my usual morning routine, sat down at my desk with a hot cup of coffee, and began work on my daily analyst report. Bianca had created a template in _WordPerfect_ for me, which helped, as that provided all the 'boilerplate' information, as well as put the necessary dates on pages, and had all the normal disclaimers. I completed each section, updated my analysis of political risk, entered the new market volatility index information, and bumped up my global risk factor by half a point, based on instability in the Philippines.

Once all of that was completed, I went to Personnel to check on the availability of Bears and Hawks tickets, securing four Bears tickets for September 11th versus Tampa Bay, as well as four tickets for five Hawks games — against the Penguins on October 27th; against Edmonton on November 13th; against Boston on December 18th; against the North Stars on January 25th; and against Winnipeg on March 21st.

I returned to my desk and spent the rest of the morning doing a complete portfolio analysis, Just before lunch, Naomi from the mail room brought me an envelope which contained the signed application and transfer forms from Allen & Baker. I verified they were complete, let Mr. Matheson know, then took them to Legal to begin the new client onboarding process.

"Allen & Baker are on board," I said to Bianca when we sat down to have our lunch.

"You're on a roll, Jonathan!"

"There's still a long way to go," I replied. "No resting on my laurels."

"I can't imagine you doing that," Bianca observed. "That's just not you."

"I'm just saying that there is still plenty of hard work to be done. And that will never change. I'm sure you see how hard Matheson and Spurgeon work. To me," I continued, lowering my voice, "that's the minimum level necessary for success, because if I do it your way, I'd be competing against them, rather than coöperating with them. And remember, I still have a lot to learn and I need to have a Rolodex full of contacts."

"You have a secret weapon!" Bianca smiled. "I'll go with you!"

"Yes, and so will Jack, and I'll pick up teaching Ellie later this year or early next. She still has two years of school, not to mention having to find a job in the industry. Hopefully, Spurgeon will hire her, but there are no guarantees. Jack has another year before he'll be considered for runner or trading assistant. We're getting WAY ahead of ourselves."

"And yet, we have to keep our long-range goals in mind and do what's necessary to achieve them."

"True," I agreed.

We finished our lunch, went to the gym, and then returned to the office to complete our workday. I left early, as planned, and headed to Rush Presbyterian to see Keiko.

"How are you feeling?" I asked when I sat down next to her.

"The first day is always the easiest," she said. "Doctor Morrison did say I'll receive a blood transfusion on Monday."

"How were the results of the tests they ran at Mayo?"

"Just barely under," she replied. "It was up a total of 4% since the end of the previous round."

"Good," I replied. "That means 'status quo' and we continue the treatment plan."

"That's what Doctor Morrison said, and he spoke with Doctor Weiss, who concurs."

"On a totally positive note, I received the application from Allen & Baker today and turned it in to Legal to start the process of bringing them on board."

"That's great!" Keiko declared.

A few minutes after I arrived, the tech came to disconnect the empty IV bag, and after a check of Keiko's vitals, I was allowed to take her home.

_August 23, 1983, Chicago, Illinois_

On Tuesday, after leaving the office early and taking Keiko home from the hospital, I drove to University Village and parked in front of Violet's house. We intended to follow our previous pattern – dinner before class, then pie and coffee after class while we worked on homework. As usual, I helped her put the finishing touches on dinner, and after we ate and cleaned up, we headed for Circle.

"What class do you have tonight?" I asked.

"Economics; My Monday and Wednesday class is music history, which is my Fine Arts elective. Your friend won't be in school this semester, right?"

"Teri? Correct. She and her brother were Seniors in High School and are at UofI now. The only way she'd have stayed here was if I'd asked her to marry me."

"Did you consider that?"

"In the sense that I was aware she was interested and continued to see her, yes, but it became increasingly clear to me that Keiko was the girl I wanted. I let Teri know that, and that was basically the end, which it had to be."

"Sure. I was just curious if you considered alternatives."

"I did, including you!"

Violet smiled, reached over and grabbed my hand and squeezed it.

"I just wish things had been different," she said wistfully. "I'm glad you're my friend."

"And I'm glad you're mine," I replied, squeezing her hand gently.

I walked her to her classroom, then went to my classroom in the same building. Ninety minutes later, I left the classroom and joined Violet for the walk to the diner.

"How was your class?" she asked.

"It's going to be tough, but it's something I need to understand, at least at a basic level. How about you?"

"I think econ will be fairly easy. I read several chapters in the book before class and understood them, so I have something of a head start."

"Good. Do you have homework?"

"To read two of the chapters I've already read! I took notes on them, so no, no homework. You?"

"Some very basic math problems — determining mean, median, and mode for sets of data, and plotting a few curves."

We reached the diner, ordered, and while I worked on my assignment, Violet read further along in her econ book, and a chapter of her music history text. Later, I walked her to her house, then drove home.

_August 25, 1983, Chicago, Illinois_

"Now that Hayes has won election to Congress, have you put in an application?" I asked Marcia when we met for lunch on Thursday.

"Yes." she replied, "and I've already spoken to his Chief of Staff. I'm confident I'll be hired for a role in his district office."

"That's great news!" I declared.

"How is Keiko?"

"You saw her on Sunday!"

"Yes, of course," Marcia replied, "but I meant how she's handling the chemo,"

"The same side effects — hard to keep anything down except broth and Jell-O, she's very tired, it ensures she won't have any hair, and otherwise makes her feel lousy."

"No word on a bone marrow match?"

"No. Her grandfather arranged for testing in California where he has many Japanese-American friends, though our best bet will be either 'Issei' or 'Nisei', born of two Japanese parents. Those words mean 'First Generation', that is immigrants who came from Japan; and 'Second Generation', that is, those born here to parents born in Japan. Those are the most likely to match, though anyone, of any ethnicity, could potentially match."

"What happens if they can't find a match?"

"Nothing good," I replied.

"You both seem so calm; I'd be half-insane if it were me."

"So, same as normal. then?" I asked with a smirk.

"Jerk!" Marcia exclaimed, but she had a smile on her face.

"I think, at least for me, the question is, how would freaking out help things?"

"It wouldn't, obviously, but it's a normal human emotion."

"I'm anything but normal!" I chuckled.

"You said it, not me!" Marcia declared.

"Back to the original question, when will you hear about the job?"

"By the end of next week, at the latest."

"Keep me posted," I said. "Lunch again next month?"

"Absolutely," Marcia agreed.

We finished our lunches and when I returned to the office, there was a message from Bill Wyatt, so I returned his call.

"I have four buildings that might interest you," Mr. Wyatt said. "Two in Rogers Park, one in Lincolnwood, and one in Wrigleyville. They're all two-flats in good condition and listed at a reasonable price. I'll fax you the listing sheets and you decide which ones you want to see."

I thanked him, we ended the call, and ten minutes later, Mia brought me the fax. I put papers in my satchel and resumed my usual afternoon research and analysis. Recently, Mr. Spurgeon had purchased a subscription to a private newsletter covering the US military, which was delivered each day by fax.

The key information I could glean from it was the location of the US fleet positioning, especially aircraft carriers, which had to move in advance of any US military action. The newsletter also covered news about 'choke points' in the sea lanes, including the Straits of Hormuz, the Suez Canal, the Panama Canal, and the waters around Indonesia.

Another newsletter, which we'd been receiving since before I started at Spurgeon, covered oil production in every major field in the world, as well as tanker movement. A third report covered container ships and port volumes, again on a daily basis. I was positive there was a way to make use of those numbers in some kind of predictive model and discussed it with Bianca just before I left for the hospital to pick up Keiko.

Keiko was suffering the same general set of side effects, though she also had a runny nose, which Doctor Morrison attributed to allergies, as blood tests showed no indication that would point to a viral or bacterial infection. They were giving her antibiotics as a precautionary measure, so that made sense to me, as a layman, given Keiko had complained about mild hay fever in the past.

"How were things at work today?" she asked once we were in the car and on the way home.

"Good. No major moves, though I did receive a list of four possible buildings from Bill Wyatt. I'll look at them next week."

"Will your fund buy them?"

"It doesn't fit the asset allocation rules I established. Buying into an REIT is within those rules, but individual real estate is not. I don't have enough individuals to whom I could spread the REIT shares, so I can't use an REIT at the moment. I can, on the other hand, use my carried interest as additional collateral to obtain a better rate on a commercial loan through our prime broker."

"Prime broker? Not a bank?"

"Sorry, a prime broker is a bank. They provide overnight capital for clearing trades, find securities to borrow for a short, and clear trades. We actually have two firms that do that for us — one is Madoff Investment Securities, who clears our NASDAQ trades, and the other is Goldman Sachs, who handles everything else. I'll go through Goldman for this."

"I don't know if you ever explained about buying buildings."

"For the income," I replied. "I'll contract management services with Kasia Pucinski, and she'll handle everything, including renting the property, maintenance, and coordinating repairs. I'll simply receive a monthly check from her that is the net of the rent, less her fees. It won't be a lot of income at first, but as I buy more buildings, the relative cost compared to the income will go down. And I'll have capital gains in any increase in property values."

"You plan to keep our current house when you, I mean we, buy a new one, right?"

"Yes. It'll be another investment property which will also generate income. I want to make sure I have multiple income streams and don't have all of my wealth tied up in securities and other financial instruments. I'll diversify into a number of asset classes, including art. One of my goals is to help Deanna become a 'rock star' abstract artist, similar to Jackson Pollock. Granted, that's a stretch, but if we can get the right kind of publicity, she'd have a shot. The other thing I want to do is support CeCi in her filmmaking."

"Is that normal for people at Spurgeon?"

"Not really. They'll buy art as an investment, but it's not about supporting the artist. And they often don't really diversify outside of financial products. I don't want to be dependent on any one thing, or even one class of things. Once I have sufficient resources, I'll look for small businesses in which I can invest to create both income and growth."

"It's amazing how far you've come and that you have everything mapped out, but knowing you, I wouldn't expect anything else! I'm curious if you plan to retire young or keep working?"

I laughed, "I'm not even twenty-one! That's something I haven't considered, and I don't even know what my criteria would be. My original goal was to be comfortable, and everything I'm doing is towards that goal — ensuring I don't depend on any single source of income. Once that's done, then I suppose the goal is to be what is politely called 'independently wealthy', but which is called having 'fuck you!' money in the financial services industry."

"Meaning?"

"Having enough money that you can say 'Fuck you!' to anyone about anything and not have it hurt you in any significant way. And that's one reason I want to diversity my investments outside of Spurgeon Capital. Right now, only Mr. Spurgeon has that much. Murray Matheson _could_ if he moved money out of the various Spurgeon funds and diversified, but right now, he's dependent on Mr. Spurgeon and can't say 'Fuck you!' to him. Heck, I think at this point, Mr. Matheson would do anything Mr. Spurgeon asked him to do, even if it were illegal!"

"Because he has to?"

"His wealth is basically tied directly to Spurgeon. Part of it is that the rules require having a significant percentage of your compensation held in the Spurgeon Select Fund. Twenty-five percent of my bonus is paid into that fund, rather than into my fund or directly to me, and it has a five-year lockup period, or one year if you leave, but payout timing is at the discretion of Mr. Spurgeon. Nobody wants to take their money from the Spurgeon Select Fund because it signals disloyalty."

"But isn't it your money?"

"Yes, it is, but it's a sign of loyalty to Mr. Spurgeon. My advantage, and that of any other fund manager like Murray Matheson, is that your commissions are in your fund, held as 'carried interest'. That said, taking it out would incur significant tax liability, which also locks you in."

"So, how could you ever leave?"

"I would go to the investors in my fund and get written commitments from them to move their money to my new firm. I could even re-use the same fund name, because it's registered to me as fund manager. I'm governed by my employment contract, but it does not prevent me from leaving or taking my clients with me. The 'golden handcuffs' are strong, but not unbreakable."

"Has anyone ever done it?"

"Not in the sense that they left voluntarily. Mrs. Peterson, the Head of Personnel, told me the story of a hotshot young trader who was the fair-haired boy, similar to me. He was idealistic and didn't like the culture and refused to go along, but unlike me, he actively fought it. That eventually led to Noel Spurgeon terminating him and blackballing him with every firm in Chicago, New York, and London. The guy then tried to work outside the industry, but every time he found a decent job, Mr. Spurgeon used his money and influence to have the young man fired. Supposedly, the only job he could find was flipping burgers."

"But could that happen to you?"

"Obviously it could, but that's why I'm executing a strategy that allows me independence and making investments outside Spurgeon. And I know enough to counter any attempt at blackballing me."

"You have dirt on Mr. Spurgeon?"

"It's an open secret, but nobody has the guts to use it against him. It's my ace in the hole, so to speak."

"What is it?"

"Mr. Spurgeon has a penchant for bedding underage girls, and I know someone who knows who those girls are."

"Jeri, right?"

"Yes. I would never use it against him unless he came after me."

"Even though he's breaking the law?"

"That's between him and the government. You know I try to mind my own business and let other people mind theirs, and honestly, if a fifteen-year-old girl wants to have sex with someone, that's her business, not mine nor the government's. Even if I weren't married, I'd have zero interest in girls that age, but I'm not about to tell them they can't make their own decisions. Seriously, Illinois would say that Bev and me having sex was a crime, even though she initiated it and was only a year younger than I was."

"Do you think the government should butt out of regulating your work?"

"Nearly all the regulations are about transparency and not cheating customers, so, really, they don't get in the way if you're honest, which I am. Sure, there's red tape, but mostly that's handled by Legal and Compliance. I keep detailed notes about my trades, but I'd do that even without regulations. Ultimately, the regulations don't prevent me from making honest trades in good faith. It's not like the law we just discussed where even honest, ethical, and consensual action is prohibited by the government. That's a VERY different thing."

"I suppose you would have objected to Prohibition, right?" Keiko asked.

"I love what I heard from Marcus, the foreman for Brown Construction — 'Al Capone once said that he was a businessman supplying the people of Chicago with goods and services denied to them by their government'. It fits my view perfectly. If I want to drink, or smoke, or screw, or get high, and I don't hurt anyone else, it's nobody else's business."

We arrived home, and I helped Keiko to her old room, where she had to sleep during the week of chemo and the following week. After making sure that she was settled, I left the house and headed to Violet's for diner, followed by my stats class.