“No, I thought you might want to visit me over spring break down in Florida. My grandfather’s got a place, and I’m going to need a doubles partner for the tournament at the club.” They were walking through the main gate to the campus, heading across Broadway.
“C’mon, Chas, you’re going to import a New Yorker to knock balls around at Hobe Sound? What if we win? Wouldn’t that look great on the trophy? I can see it—1924 champions: Tilden and Cravath; 1974: Laver and Wickersham; 1984: Harper and Hebrew.” Hament was grinning. He’d heard about Chas’s family having palatial vacation homes and was excited to be invited to see one.
“C’mon, there’s no way anyone would know, except for that hair.” Chas pointed at the locks trailing down Warren’s neck.
“Right! But what about this?” Warren pointed to his nose as the pair stopped to look for a taxi.
“Hah! Doesn’t seem to hurt you with the ladies! Besides, mine’s twice as big and busted. Listen, Eliza and a friend of hers are going to be coming down for a few days. Oh, I forgot to mention that there’s also a Swedish family next door with four incredible-looking daughters who like to hang out on our beach.” Harper’s smile was now big enough to sail in.
“You know, it’s funny. Ever since my great-grandpa came over, it’s been an overriding goal of the Hament family to collect the Hobe Sound Blue-Blood Title Belt. Or whatever.” They flagged down a cab and gave the driver Chas’s address on East Eighty-Third Street. The two had discovered during orientation week that they lived six blocks apart and shared a ride up and back every day. Chas lived in an expensive high-rise with a doorman, while Warren’s apartment was a walk-up in a dark brownstone, but it was much cheaper, and he loved the high ceilings, big windows, and elegant mouldings.
“And maybe meet a few hot blondes?” Harper smiled and gave him a shove.
“That too. That too.” Warren nodded. Harper was known to never tire of chasing girls.
Warren Hament had come to Columbia Business School almost a year and a half ago, on what seemed like good advice. His childhood and schooling had hardly trained him for any productive employment. His father, a tennis coach, had given him the only education he knew—a game good enough to make him admired at country clubs around Millbrook, New York, where he’d lived until he was ten, and the scourge of junior tournaments in East Hampton, where they’d moved when his parents divorced. But once he’d come up against the California and Florida kids with their personal trainers, nutritionists, and entourages, his casual work ethic and big topspin shots were simply not enough.
After four years at Brown, idly infuriating the tennis coach and barely passing his courses, his first paid job was as an intern two days a week at a Madison Avenue art gallery. He had learned a lot about the cutthroat art world, and a lot more about the gorgeous, well-dressed socialite art-history majors who gravitated to the Madison Avenue milieu. As an attractive, and straight, young man, he got a fair share of attention. He’d struck up a brief friendship with one woman, Roxanne Nahid, whose father was an immensely successful commodities broker. They’d met in the lobby of Christie’s, where she worked in Special Client Services, a group of dilettante private shoppers for serious collectors. He was there to deliver a check for the gallery, and she was intrigued by the bright, fit young man with an honest and open face.
Although she’d lost interest in Warren after several nights in her family’s Fifth Avenue apartment, he had ventured to look for breakfast one morning while she slept in and encountered her father in the spectacular glass-enclosed terrace overlooking Central Park. Lucien Nahid, an intense, white-maned Iranian, had taken an instant liking to Warren, who asked endless and intelligent questions, and invited him to see the world of commerce at perhaps its most fundamental level. “You don’t need an Ivy League pedigree for this world, young man. That is only necessary for my daughter” was his startlingly frank evaluation. The next day, Warren met Lucien in the lobby at seven o’clock and rode down to the World Trade Center in the backseat of a navy-blue Rolls-Royce.
With a visitor’s badge pinned to his jacket, Warren quickly learned the language of the commodities exchange’s trading pits. It was an elemental world of bids and offers, winners and losers. In few jobs was success or failure so clearly defined at the end of every day, where office politics were distilled to the unbridled pushing and shoving of bodies immersed in the frenzy of screaming that accompanied the sustained hysteria of the open markets. Nahid was right—it seemed to require no special training or degrees.
Warren visited the exchange several times over the next few months, and Nahid, who seemed disappointed his daughter had moved on, even allowed him to enter a few orders for gold futures contracts after opening an account for Warren with his life savings of $6,000. Warren was surprised to see that he started to make some money. One morning, a rumor of a major artillery attack on Israel had driven gold prices straight up, and Warren had made a quick $4,000. That was more than his father made in a month of eight-hour days on the court. Within two months, Warren’s account held almost $40,000.
In that same span, he’d seen several faces come and go, like high rollers at a casino. Henry Greenberg, an overweight accountant from upstate New York with a Fu Manchu mustache, had come into the pit on a Monday as a new member of the Exchange. He told Warren over breakfast that he had sold his bookkeeping practice to buy the seat, convinced that his method of graphing price movements could accurately predict short-term market trends. After two days of carefully marking each trade on a sheet of graph paper, he had suddenly exploded in a flurry of action, arms flailing and his shrill, nasal shout booming, buying contracts wildly. He was right—the market had “broken through long-term resistance” on the chart and was climbing. By the end of the week, Henry’s account had swelled from $200,000 to almost $2 million. When he got to $5 million in just a few more weeks, Warren asked him why he didn’t just quit. Henry admitted he was hooked and wanted to make $50 million. Within two months, his account was in negative territory, and his membership was sold the following week to settle his debts. The four Cadillac Sevilles he had bought for his family were repossessed. Warren never saw or heard of him again.
There were others, such as an ex-fireman from Brooklyn who was tied in with a big broker at Montgomery Trading, and who always seemed to know in advance when the big customer orders were coming. Jimmy would suddenly buy fifty or a hundred gold contracts, and a moment later, Montgomery’s heavy hitter would appear with an order to buy five hundred or a thousand, always allowing Veneziano to sell him the last lots at the highest price. Warren figured Veneziano’s front-running made him at least $700,000 in the time Warren observed, and he only wondered how much of this was passed back to the Montgomery broker in a fat envelope.
He was quickly instructed that no good could come of discussing what was happening so openly. “Warren, all markets incur ‘friction,’” Nahid had said. “All transactions have costs, whether it is a fee, a tax, or fraud. It will always be this way. It would be unwise, or even dangerous, to interfere.”
For the honest brokers, executing customer orders at $3 a contract could be a nice and honest living, but only the traders with their own cash at stake made the big money—or lost it. It didn’t matter to Warren. Despite the money he was making, he had no real taste for the pit, just as he hadn’t enjoyed the trip to Atlantic City he’d taken with a few other traders. His grandfather, a bookie, had inoculated him against gambling in all forms, and what he was doing was almost purely gambling. He figured out a way to make a reliable income trading “spreads”—relatively safe trades that exploited small changes in the relationships between different delivery months, and he found his strategy made him a tidy income without the big swings that could wipe him out.