Story Length: 2,000 words, approx. 8 print pages.
PAYDOWN
A Leopold Blake Thriller
By Nick Stephenson
Summer 2007
Leopold Blake sat in the hotel bar, two martinis already in him, and waited. A man in a tux played the piano in a far corner and the room was full, though Leopold had managed to find a stool near the taps. He helped himself to a handful of peanuts from the jar on the counter and caught the barman’s eye.
“Same again?” The man cleared the empty glass away.
“Dry this time,” said Leopold. “No peel. If I want lemon, I’ll order lemonade.”
The barman nodded and picked up a shaker. Leopold watched him fill the steel container with ice before pouring in a healthy measure of Bombay Sapphire. Next, he dripped dry vermouth into a cold glass, swirled the liquid around the rim, and poured the contents away. He stirred the gin and strained it into the glass.
“Sir.” The barman slid the drink over.
Leopold nodded and sipped. It was good enough, not perfect. The room felt warmer, probably thanks to the alcohol, and Leopold felt hungry. The peanuts didn’t help, making him want to drink his martini all the faster, but his aim wasn’t to get drunk, not tonight. Not while he was working.
Outside the barroom, near Reception, a woman marched across the floor. The clip clap of her heels on the polished tiles sounded a familiar gait, the right foot falling harder than the left, either a limp or ill-fitting shoes. Leopold figured the latter. A cop’s salary didn’t usually stretch to luxury footwear.
She reached the carpet, the sound of her approach vanishing just as the light hit her face. Her features were alluring, Leopold always thought, with her high cheekbones and sharp jaw. And the eyes.
Leopold stood up as she drew close, her perfume drifting into his nostrils. She wore a black dress, a clutch bag slung over one shoulder. The outfit looked brand new.
“Blake, you better have a damn good reason for dragging me out at this time of night,” she said.
He glanced at his watch. “It’s ten thirty p.m.”
“Damn right. You know what time I get up?”
“We’re here to surveil. We can’t surveil someone while we’re asleep, can we?”
“Are you drinking?” She eyed his half-empty glass.
“I’m blending in.” He smiled and took another sip. “One for you?”
“I’m on duty.”
“You strike me as a Bellini kind of girl.” He turned and snapped his fingers. The barman had apparently overheard, fetching down a bottle of Moët from the fridge.
“I said no.”
“Relax, Mary. We might be down here a while.”
“That’s Detective Jordan to you, Blake. After what happened last time, make sure you behave yourself, or you might find yourself in more trouble than your high-priced lawyers can handle.”
He raised one eyebrow. He liked it when Mary got mad. Her Brooklyn accent always broke through when she got riled up.
“I’ll try to behave.” Leopold slid her drink over. “At least hold on to it.”
Mary obliged. “Any sign of the mark?”
“I saw him come through around eight. According to his calendar, he’s due for drinks at eleven, meaning he’ll resurface soon.”
“I suppose I’d better not ask how you got access to his calendar.”
Leopold smiled. “This guy does most of his best work outside the office. The VIP room at Suave is a regular haunt—bottle service usually gets the clients loosened up pretty fast. After that, it’s back to the hotel for room service and paperwork until around three. Then he’s back in the office for nine a.m.”
“You’ve been tailing him a while, I see.”
“It pays to be thorough.” Leopold drained the last of his martini.
“Take it easy. We’ve got a long night. I need your...” she paused. “I need your particular skills as sharp as possible. You’re no good to me half-asleep.”
“I prefer to think of it as half-awake,” he said, ordering a fourth cocktail. “And don’t worry. Even with half my brain, I’m still smarter than anyone else in the room.”
“And so modest, too.”
“Modesty serves little purpose. Other than to feed one’s insecurities by inviting more praise, that is. I have no need.”
“No. You have an entirely different need.” She eyed his fresh glass. “Just stay sharp, that’s all. What else can you tell me about the mark?”
“Teddy Gordon’s a Wall Street guy through and through. Private school followed by Princeton got him into all the right parties, landed him a job at Needham Brothers. Made senior analyst within a few years, then partner. He was bringing home five hundred grand a year plus the same again in bonuses before he hit thirty.”
“Looks like I’m in the wrong profession,” Mary said. She sighed in defeat and took a sip of the Bellini.
“Five years later and he’s a senior VP, managing eight hundred million in client money. That’s quite the ladder to climb in such a short time.”
“You think he’s working an angle?”
Leopold dropped a handful of peanuts into his mouth and chewed thoughtfully. “We’re in the middle of a housing boom. It’s been six years since the dot-com bubble burst and people are throwing their money around again. Downtown property values have risen eight percent a year for the last three years in a row. That kind of growth doesn’t happen without a few people bending the rules. And Teddy Gordon keeps some interesting company.” Another handful of nuts.
“You think Needham is turning a blind eye?”
“Undoubtedly.”
“How do you know all this?”
Leopold shifted on his stool. “I had to get used to dealing with money at an early age. Just as well, really. How many fifteen-year-olds inherit enough money to pay a small country’s tax bill?”
“Poor you.” Mary took another sip of her drink.
“Look, there are tricks you can play to manipulate the market. It’s all based on perception. The money isn’t real; the value of something is based solely on how much someone will pay for it, and that’s controlled by how the buyer thinks everyone else is going to react. A smart banker understands how the buyer thinks, how the market thinks. He reacts accordingly.”
“Yeah, you lost me.”
“I’ll give you an example. A bank gives some poor schmuck a mortgage at 100% the value of his property. No deposit. The bank sells the debt off to a larger bank in return for instant cash. The larger bank bundles up a hundred crappy mortgages like this and sells insurance policies for ten cents on the dollar—because their analysts tell them it’s a sure thing. They do this with thousands of loans. The mortgage securities market grows. Nothing can go wrong, right?”
“Until the homeowner can’t make his repayments.”
“Right. Enough defaults, and it starts a chain reaction. The value of the house goes down, so the original bank can only reclaim 75% of the money. Or less. The larger bank who bought the debt is now on the hook for the insurance payout, and has to cover the full value of the mortgages they bundled together. They lose their cash reserves, meaning they stop lending. Or they go bust.”
“And if nobody’s lending, nobody’s buying. Everybody loses.”
“Yeah. Well, except for the guy buying up the insurance policies.” He winked.
“It’s an interesting theory. But what’s this got to do with Teddy?”
“That’s what we’re here to find out. “ He checked his watch again. “He’s running late.”
Mary put down her drink. “Maybe it’s time we arranged a visit.”
“What did you have in mind?”