Winner of The Letter Review Prize for Unpublished Books
SPRING
1.
In the beginning was C/r. If a bond pays a periodic payment of C in perpetuity, its value is cash flow divided by the interest rate. Assume yearly payments of $100 and an interest rate of 5%. That bond is worth $100/.05, or $2,000. Every other cash-flow value derives from that.
You need cojones to issue a perpetuity. When you do that, you proclaim that you will be around to pay out on it forever. The Brits called their last undated gilts in 2015. Even they don’t issue them anymore.
A growing perpetuity, or a bond that pays out a steadily increasing stream of payments in perpetuity, is C/(r-i), where i is the increase in C. Assume the same bond as above, only payments increase by 2% each year. That bond is worth $100/(.05-.02), or $3,333.
Unlike a steady perpetuity, a growing perpetuity is easy to find. Rental real estate is a growing perpetuity. Land will be around forever, and God is not making any more of it. Everyone, always, will need a place to live.
Life is messy. Real estate is messy. Numbers are a consolation.
2.
My name is Joe. I live in Manhattan and make money by splitting the space between the wallpaper and the wall. My second name is Dubay. It sounds funny, I know. It got me stuffed into a few lockers. I didn’t choose it, and I did not choose the people who gave it to me.
3.
I sound strange here, but I present as normal in real life. I am thirty-three years old, white, cis, male and a vice president on the ETF arb desk at a bulge-bracket bank. I studied political philosophy at the London School of Economics (MA thesis: The Limits of Practicable Political Possibility: An Application of John Rawls’ Theory of Justice to Contemporary Capital Markets), with a semester at Sciences-Po. Analyst at a British investment bank before that. Undergraduate degree in history and business at SUNY Albany. Valedictorian and debate team captain at Ogdensburg Free Academy High School. I escaped my humble origins by following orders, being the best in the class and studying subjects that looked good on my resume. It’s a simple formula. Work hard, go along to get along. Repeat until rich.
4.
Today is a Tuesday. Some idiot has brought in a drone and is flying it around the trading floor. It whooshes quickly over me and the intern, Alyssa Chen, does a few loops around the bank of clocks, buzzes the guys in Agencies and the sad sacks in Merger Arb, and then hovers over Mary, the head of the Convertible Arb desk. She doesn’t seem to notice it while it is stationed two feet above her monitor. The drone pilot, wherever he is, gets bored, and sends it toward the glass wall that separates the big boss’s office from what would be the fifty-yard line, if the floor really were a football field. Someone pulls out an Air-Zooka, aims and fires. The drone performs an evasive maneuver and zooms off.
Constantinople fell on a Tuesday.
I ask Alyssa, Why don’t the trade blotters match the transaction report? She says, They tie back to the general ledger. Let me show you. She is twenty-five, in the MBA program at Columbia. Great quantitative skills, poised, unflappable. Her hair is tied back in a ponytail and her hands are thin but strong – looking. She opens a pivot table and scrolls down. For the first two months after I started on the desk, I was always on edge. Everyone seemed to be busy doing what they knew they had to do. I did not understand a word anyone said. I sometimes think about Alyssa, How can she stay calm when things pop around her? She has a center that I don’t. Normal people seem to dance to music I don’t hear. She hears it. I don’t, and I can’t dance to it.
A bank of digital clocks hangs from the ceiling twenty yards in front of me. New York, 0750; London 1250; Frankfurt, 1350, Deli 1620, Hong Kong 0850. One of the lacrosse players on the Volatility desk is shouting at Sam, the tax lawyer, Hey – Doctor No! Whaddya say? McCarthy and Schneider in Index Arb are talking about a football bet. McCarthy is tall, broad and balding, wrestled and played football in college, everyone’s friend. Schneider is a head shorter, pudgy with a high, stringy voice and three days’ growth of beard. The south Asian quants in Risk Management are huddled over their computers, quiet.
The big boss, the Capo di Tutti, is in his office with the door closed. His feet are on the desk, his shoes are off and he is talking to the blond-haired, blue-eyed, ex Princeton, ex football head trader, laughing. Behind him, framed, is a page from the New York Times listing the manifest of the ship that brought the big boss’ grandfather, Salvatore Bisaquino, to Ellis Island. The big boss wrestled in high school and college, and now coaches a local high school team.
I type EYES ON YOUR OWN SCREEN, FUCKFACE into an email and Kumar, the mortgage backed trader who sits next to me, explodes in laughter.
My head hurts from a hangover, and I am in a cranky mood. The joy in what we do is in the numbers, not the strip clubs, the ass-kissing, the numb-nutted rules, the Kool-Aid or the banter about football or ass-grabbing. A normal person who pulls up an option chain will see a bunch of numbers. A trader will see straddles, strangles, butterflies, condors, jade lizards the way a sculptor sees a hand, a neck, or folds of cloth or flesh inside a chunk of marble. A good trader will see arbitrage opportunities. Like a leprechaun, an arbitrage looks like nothing you have ever seen before, and it disappears as soon as it hits the center of your field of vision. That is why I do this. I don’t care about the rest.
A small group of traders has gathered by the picture window next to a stack of old Whitecastle boxes. A bunch of guys from FX and Crypto. The token woman and the soccer player from Agencies. The head of Volatility, son and grandson of famous writers. The Capo di Tutti’s belly leaves its office, strolls over and joins the group. I squint and see, through the window, hanging off the building across the plaza, a window washer stranded outside the fortieth floor. One of the two cables that suspends his platform has snapped and the platform is hanging at a seventy-five degree angle. He is just a speck, but the speck is clinging to the platform’s railing, and appears to be waving its hands. A helicopter is hovering near the speck, unable to get close enough to rescue it.
The Capo shouts, Give me an over-under!
Forty-five minutes, someone says.
Thirty, tops.
Make me a market! the Capo says.
Kumar asks, Guruji. You want in on this?
I say, No.
The gaggle of traders by the window has grown. An open-outcry market life begins to supplement the on-line market. I ask Alyssa, Do you want to place a bet on that guy’s life? She smiles and ducks the question.
A trader named Cesar appoints himself stake-holder for the open-outcry market. He waves a stack of money that grows as guys hand him hundred-dollar bills. He holds the stack above his head, waving, Fill or kill! Fill or kill! Fill or kill! Next to me, Kumar says to nobody, I gotta hedge my gamma risk, man.
Then, my boss, Nowak, shouts to me over a row of bald, sweaty heads. Hey, Dubay. Your sonar is ringing. I hop over to my desk.
Nowak has put my phone under a coat to deaden the ringtone. When I pick up, it is just silence at first. Then, I hear the voice of an older man speaking tentatively.
Joe?
This is Joe, I say.
This is Vergil Gagnon-
Vergil pronounces his last name ‘Geeagnaen’, the way people do where he lives. I wave off Alyssa and Nowak. Vergil continues,
Your father’s had some kind of something, Vergil says. He’s in the hospital in Syracuse.
I have ten million shares in five hundred names that I have to deliver to the authorized participant before the market moves and I get my face ripped off.I haven’t seen or spoken to my father in a decade. Fuck if I want to drop everything.
Why are you calling me?, I say
He asked for you. They said they need someone to make decisions for him.
I look to my right and to my left. My mother is dead. I don’t have brothers or sisters. Fuck, I think. Fuuuhck.
Can’t you call Duplessis? I ask.
Bud Duplessis is an old friend of my father’s. His wife died five years ago.
I only know what they tell me, Joe, Vergil says.
I don’t want to leave the desk, but things seem to have me by the short hairs. Even I can see that it would be small for me to blow this off. After a beat I say, I’ll be there tonight.
Nowak looks like a gnome would look like, if the gnome had a PhD in applied math and wing-nut ears. His hair is bald and thinning, his nose is bigger than you expect it to be each time you see it, and his eyes are blue and wide-set. Like Gorbachev, he smiles but has steel teeth. When I look up from my phone, he is sitting near me, smiling. I say, There has been a family emergency. I gotta go. Sorry. His smile fades.
You do what you gotta do, Dubay, he says.
Thank you, sir. I will.
5.
To pack for a short but open-ended trip, you start from the bottom and work up. Socks, grunts, gym shorts, regular shorts, long pants. Tee shirts, a long-sleeved shirt, an extra pair of glasses. A toothbrush, toothpaste, razor, contact solution, supplements. Tablet, computer, phone. Maybe a book. Head-lamp, multitool, baseball cap, rain jacket. Everything fits into a gym bag. There is a Walmart near the bridge. Anything I have forgotten, I can buy there.
The apartment is a box in a rectangle. I don’t share it with anyone these days. When the door closes, I notice that the carpet in the hallway is worn down near the center of the run. The doors to the other apartments look like the doors in a hallway in a hotel.
Luis at the front asks me ?Que tal, Señor Joe? He really means, Why are you here? It is mid-morning on a weekday. I should be doing my knowledge-work. It is his job not to comment, but he makes it his job to know. I say, as he has taught me, Jodiendo, gracias, y usted, señor? and he chuckles loudly. For a beat, we enjoy the banter that men share with each other.
The door expels me like – I want to say – the birth canal. Outside, it is sunny and TriBeCa. Old John on the repo desk says this area was all sex workers forty years ago, although he doesn’t say ‘sex workers’. Now, it is cobblestones, yoga studios, cafes, stores that sell vanity. John uses the NATO alphabet when he executes trades on the phone and tells you things like, I hope your dick is long enough so that you can fuck yourself, when you piss him off. Nowak says that, when Old John retires, a piece of Wall Street will die. A couple of girls who couldn’t be more than twenty-two walk past me, one with black hair, one with green. When I reach a break in the canyon of buildings, I see Jersey City on the far shore of the river. People from where I come from don’t know why I pay five grand to live in a box and work sixty hours a week. This is why, I would tell them, if I could. It is because when you walk out into the street, you swim in an ether that conducts electricity and light. You don’t get that in a town with no center. Maxwell’s equations went out in the early twentieth century. The ether was a hypothesis we didn’t need anymore – but it’s still here in Manhattan, if you bother to notice it.
On the way to the car rental place, I pass a store that calls itself the Amish market. It sells scones, cut flowers, CBD and tiny pieces of fruit set in boxes of ice for $5 apiece. Clip clop, clip clop, bang bang, I think. An Amish drive-by shooting, we used to say, when we saw horses tied up in the Walmart parking lot. What do these people know about Amish?
6.
The road is not different from the last time I drove it twelve years ago, only this time I do it in a Zipcar. Potholes in the FDR Drive. Right, then left, onto the Willis Avenue Bridge. A tickling feeling in my butt as I drive across the metal-grate surface. Under the I-95 viaduct, across the other bridge at the Tappan Sea, then north. It is late afternoon, late spring. The sun will be in my eyes when I turn at Albany. When I reach the west bank of the Hudson, I pass a minivan with Quebec plates, driven by a middle-aged man. His wife is in the passenger seat and three children are scattered throughout the back rows – a boy of fifteen, a younger teen girl thumbing her phone, a little girl in a car seat. I play alt-country and Celtic fiddle music as I drive, nudging the cruise control with my hand instead of stepping on the gas. I overtake the minivan again around Ravenna, after I have stopped for gas and a piss at a rest stop. I wave to them and the wife smiles and waves back. They are in my rearview mirror when I turn left at Albany and they continue north.
Until I-84 crosses the Thruway, I think: Nowak knows which positions are open. He knows the counterparties. Alyssa can do the reconciliations. Rates are at historic lows. The market is buoyant. The VIX and the VVIX have tanked. That sucks for the guys on the vol desk, but we make money regardless. By Albany, the road grants me a rhythm. The country is open, rolling hills and billboards, and the highway is straight, but not too straight. Someone said that, if you drive long enough, you do not pass over the road. Instead, the road passes through you. Mile markers tick off my distance from the City, and then, my distance to Buffalo. Past Ilion, I remember that truckers call this ‘windshield time’.
When I get to Syracuse, it is dark. A nurse at the desk inside the door to Neurology points me to Room N-103. The other patient is Hispanic, male, young. His parents and a younger sister sit beside them. The sister is looking at her phone; the mother is holding her son’s hand. The son’s eyes are open, but he is neither sitting up nor talking. My father’s bed is next to the window. It looks out over the older part of the city, the nineteenth-century public square, the lipstick hotel, a few headlights, ribbons of cars on the highway, darkness. Vergil told me that his wife had found my father slumped over his desk, passed out and unresponsive when she had come into the office to pay her water bill. My father is propped up in the bed, wearing a light blue hospital gown and nothing else. I sit on the chair next to him.
Vergil called me, I say.
I get confused sometimes now, Dad says.
He tells me that he had had headaches and had vomited a few times in the middle of the day. Part of his left eye’s field of vision was black. Vergil had told me that he sometimes called water ‘soup’, a car a ‘zebra’ and electricity, ‘water’. The doctors had moved him to Syracuse because they wanted to do more tests. His hair is thin, white and longish and he is skinny enough to make his nose look like a beak. I remember that his hands used to be thick and covered with dirt and callouses. Now, they rest on the outside of the blanket and look like an old man’s hands – crinkled, veiny, blotched. By the time I left home, I didn’t like him much. He was something to bang against and little else. Now that thing is withered. I am angry that the only option is for me to do the right thing, but I also feel a void that nags. His eyes stay on the TV screen as we speak. After a long pause, he speaks up. His voice is creaky, like a smoker’s, although he never smoked.
Can you do me a favor? he says.
What?
I’ll be in here for a week. Go up and take care of the park while I’m gone.
The park he refers to is the shitty mobile home park that he built and that I escaped fifteen years ago like Houdini escaped Appleton. I would like to say, No Dad. I can’t deal with your pissant piece of land, but of course I don’t. Instead, I say, You sleep now. I will be back to see you tomorrow.
Mobile home parks are like black holes. They have strong gravitational fields. They suck in everything around them. Once matter enters, it never leaves, and it obeys laws that differ from those that pertain outside.
7.
I once said that real estate is like light. It is both a wave and a particle, depending on how you look at it. To the person who lives in a mobile home, the space where they live is home, the place where, when you have to go there, they have to take you in. To the owner of the land, it is an entry on a balance sheet. The two things are incommensurable with each other, but the same thing is both at the same time. Struggle with that, if you like.
According to manufacturers’ statistics, approximately five-point-six percent of the population of the country live in mobile home parks. Most of those people own the structures but rent the land underneath them. Real estate costs are rising and the middle class is disappearing. Manufactured housing is the only avenue to home ownership for large swaths of the country and the only non-subsidized source of affordable housing. Park ownership is a good business because it is a way to provide clean safe and affordable housing to working people who need it. That is why my father did it.
Few people who live in parks can afford to move their homes. Because of that, people who live in parks tend to stay put, even if lot rents go up every year. Park ownership is a good business because you have a captive audience, like a waffle house where the customers are chained to their seats. That is also why my father did it.
Gravity bends light. That can be observed when light passes by a massive object like a star. In the case of an exceptionally massive object, like a black hole, it can be swallowed entirely.
8.
The GPS tells me to take 81 north to Watertown and then 37 to Ogdensburg, but I take 90 east to Rome and then head north. Instructions to turn left or merge interrupt songs about a town on the plains where everything dries up and blows away because of unsustainable irrigation practices. The road is just two lanes. It passes through farmland, small towns, some forests and hills. Just south of Boonville I pass some Amish kids on the right, in front of their house, two boys and a girl, wearing bonnets, dresses, black trousers, white woven shirts and funny hats but half-size with no beards. The boys are throwing sticks into a pond on their land, and the girl is standing watching them. Long cylinders of white plastic wrap holding thousands of cubic yards of hay lie parallel to each other on their neighbor’s land. The road curves gently, never straightens entirely, and never hairpins. It is a clear day. I am almost hypnotized as I drive past the entrance sign (Leisure Living Estates – Lots Avail) and pull into the driveway in front of the park office. It is ten o’clock on a Wednesday in early spring. The sun is halfway up the sky, and the river is where I remember it being.
When I see Vergil on his porch, he’s sitting in a fold-up chair wearing a porkpie hat and wrap around shades that make him look mean. Before I pull into the office driveway, I see him lift his hand from the elbow, put both palms on his knees, and lift himself out of the seat.
Everything in the office is still there. The drop ceiling. The door at the back leading to the kitchen. The desk top made from a single cross-section of a tree trunk edged with bark and covered in polyurethane. The two greasy armchairs that I used to burrow into. A computer from 1990. More paper and dust than I remember. The office is the entrance to the house. Behind the kitchen is the living room, a staircase, and the second floor where my parents and I used to sleep.
9.
The first time I placed a trade, I was nineteen. It was for a second-year class in investments that I took in college. The professor gave each of us a paper-trading account funded with twenty thousand fake dollars. Each week, we learned a different instrument. Week one was equity. Week two was debt. Things got complicated after that. Futures, options, binaries, swaps, asset-backeds, repos, hybrid instruments, bespoke trades, tax plays. Crypto was not a thing yet. The professor was young, wore slacks and open-necked shirts, and spoke with an accent someone told me was Israeli. Have at it, he told us. Your grade will be measured in dollars. Your expected return is $20,000 less commissions.
A butterfly is a four-legged trade. It is called a ‘butterfly’ because the payoff graph at maturity looks like a butterfly. The wings are two straight lines that run below and parallel to the breakeven line, to zero on the left and to infinity on the right. The body is a triangle that rises above the breakeven line whose apex is the strike price of the two short options.
When I first typed ‘butterfly’ into the trading platform, it defaulted to a diagram that was one strike wide at the wings with the body at the current market. I was in the stacks of the business school library. I looked over the top of the carrel where I sat. All I could see were white painted bricks on my left, a similar carrel in front of me and a line of black metal numbered bookshelves stretched out, if to the left to zero and if to the right, infinity. I thought, The body of the trade doesn’t have to be at the market. You can put it above or below. If you do that, it becomes a directional trade.
A directional trade with positive time-value and limited risk. That is like perpetual motion, or insulating paint.
At the end of the semester, my account was at twenty-seven thousand and change. I had risked three thousand dollars to get that. I had had a bit of luck, but that happens half the time. The professor walked up to me after the final class to hand me my grade. He said, Good job. You kept your Sharpe ratio high. Most people make foolish bets or do nothing. When I walked outside, it was Albany. The colonnade behind the fountains was white, spare, brutalist and symmetrical. We had never even mentioned real estate in the class, except in passing. I had learned that there were ways to make a living using numbers instead of work, land or people. It was not like discovering sex (I will get to that shortly), but I was in love.
10.
Friends from the City don’t get it when I tell them stories about the park. They expect dialogue that makes sense, a beginning, a middle, a denoument and an end, but it doesn’t work like that. Shit just happens. I would call it stochastic, but option trading is simpler than the real world. When I turn around, I see Vergil standing on the office porch, knocking on the door jamb.
How’d you get here so fast, I ask him.
He holds up his hand for me to see. It is brown, wrinkled and waxy. He pinches the webbing between the thumb and forefinger. He says, I can barely feel that.
What’s wrong, I ask.
They don’t know.
How’s Lynn?
Vergil’s wife, Lynn, made me cookies when I mowed her lawn when I was in high school. She took me to the school bus stop mornings when my father was laying conduit and my mother was arguing with suppliers. Her own grandkids are scattered.
She calls my social security check my welfare check, Vergil says.
That’s what it is, isn’t it?
You got some real beauties in this park.
Through the office window I see potholes and sections of the road that are just chip and no tar. A tree has fallen on what used to be the leach field between the Seneca section and the road. A sofa sits in front of the steps to the home next to the office beside a pile of fat garbage bags. Three kids’ bikes and assorted plastic toys are strewn over the rest of the lot. Several of the homes have gaps and bows in their skirting. How the fuck did this happen, I think. Your father hasn’t been the same since your mother died, Vergil says.
Why didn’t someone tell me?
I didn’t have your number.
What’s going on?
Ask your dad.
Yeah, right.
11.
Chriss Ferro is standing in the doorway. He works at the prison not far from the park. He is short, compact, red-faced, nearing sixty. He’s still wearing his uniform. I just got in from a double, and Juliette told me you were around, he says.
I notice that Chriss looks kind of like Old John. That creeps me out.
When I took biology in high school, I thought that the park could be an organism. Veins would be water pipes. Water would be oxygen. Cells would be homes. Bones, roads. Intestines would be septic pipes and shit, well, shit. The peripheral nervous system – the part of the nervous system that doesn’t have a brain but that moves information around the body – would be Juliette and her friends. That’s why my father used to say, If you want news to get around the park, pull Juliette Ferro aside and say, ‘Don’t tell anyone, Juliette, but…’ Other than a few crows’ feet, Chriss has barely changed since the last time I saw him.
I say, I’m here.
How’s your father? Chris asks.
They don’t know yet, I say.
The berm he put next to our trailer isn’t draining right.
Awesome.
You married now, Joe?
Nope.
Kids?
Not that I know of.
We’ll find you a woman.
Later, Chris.
After Chris steps out, I look at Vergil and say, I guess everyone knows I’m back now. Gimme the download.
Make yourself comfortable, Vergil says.
I settle into the armchair. When I inhale, the smell of the grease in the cushions reminds me of something. I try to grasp what it is, but I come up empty. I breathe in again and get no more than the first time. By the third breath, I develop a tolerance. By the fourth, the chair yields nothing but the knowledge that something is missing. It is just cushions that have become shiny from contact with elbows and knees, breadcrumbs and scraps of lunch, but I know that it brings up something. I strain. A small tip of the iceberg surfaces. I remember a time when I was eight. I was sitting on this chair when the brother of the midget, Sam Pomerelli, had just left. It was mid-afternoon, after school. Sam had asked my mother if my father had any work that he could do while he waited for his back to heal. He was not a little person like his brother. He was regular-sized, taller than my father even, pale, thin with a long billy-goat beard, square glasses and a hat with a ripped visor. I found it strange that he called my father Sir and my mother Ma’am. My father was out. My mother had just told Sam that she would ask if there was anything he could do to earn a few bucks. I inhaled deeply and the musk from the cushions filled my lungs the way I thought smoke filled a cigarette-smoker’s lungs. I asked my mother what she was doing. She said that she was balancing the books. I said, What do you mean? She said, Everything has to balance. I did not understand what she said, but it made sense when she said it. I imagined an enormous fulcrum with two baskets hanging off it, anchored with pilings in the river, next to the bridge. In one basket was one thing and in another was something else. What was in the baskets – charges, payments, my parents, Sam, me, the smell of the chair – I didn’t know, but I knew that whatever it was, my mother made sure that it stayed balanced.
I ask Vergil, So?
He says, You got a lot of beauties here.
John Kaufmann is an attorney and mobile home park owner who lives in southern New York State. His writing has appeared in Off Assignment, Epiphany, Channel Magazine, The Journal of the Taxation of Financial Products, The Journal of Taxation of Investments, and Tax Notes. Kaufmann blogs at https://dirtlease.com.