What’s the angle? they asked. The choke point, the place to look?
“See if Morningside Realty pops up,” she suggested. “They’re the broker for this offer on the Met tower. If they’re brokering more like that, I’d like to know. That might tug all the leads together. Also Pinscher Pinkerton. Keep an eye out for them, they’re trouble right now.”
She stayed for the meetings but quickly grew tired. There was a reason they called it Lame Ass. Lemmas, that was some kind of bread, also the name of their local currency, issued in blocknecklaces; but Lame Ass was usually how it went. Everybody had to have their say, no doubt this was right, but damn. How people went on. She could see why Vlade and Charlotte didn’t make many of these meetings. End of a long day, go over and help run the whole wet zone as a town hall meeting, Robert’s Rules of Order or whatnot: painful.
Then again, the alternative was worse. So the lawyerly and conscientious, the young or argumentative, or stubborn, kept meeting and making the effort. Hang together or hang separately: the great American realization. A Ben Franklin pun, young Franklin Garr had recently informed her with a look of amused pride.
She finally stood when the meeting was over, and lots of people grabbed hold of her, many of them strangers. They liked having her there. They were the same as the submariners; it was nice to have some manifestation of the force on hand and paying attention. Even if she had been falling asleep in her chair.
Now they needed her at the dance. “Ah God,” she protested. But they dragged her along, and a punk power band with a gaggle of vocalists was firing through Lou Reed’s “Heroin” like it was the national anthem, which down here maybe it was, and Gen wanted to object that the drug being celebrated was more likely to create a flow state than this supercharged nails-on-blackboard style they were indulging in, but what did she know really. They made her dance to it and she did, it was still just the jitterbug, shimmying with gusto, bouncing big men into the walls with her butt, ignoring her sore dogs. You could ignite a dance floor if you let the spirit come down. And God did they need it. Afterward someone gave her a ride home in a gondola. She would fall asleep the moment her head hit the pillow. Just like she liked it.
Lorca was on Wall Street on Black Tuesday in 1929 and saw many financiers dive out of skyscraper windows and kill themselves. One almost hit him. Later he said it was easy for him to imagine the destruction of lower Manhattan by “hurricanes of gold.”
Bert Savoy was struck by lightning after talking back to a thunderstorm on the Coney Island boardwalk. “That’ll be enough out of you, Miss God!” he said right before he was hit.
Henry Ford was afraid that the amount of dirt that was being removed to make room for the foundation of the Empire State Building was so great that it would have a disastrous effect on the rotation of the Earth. Not a genius.
g) Franklin
Well, fuck. Fuck fuck fuck. It isn’t fair. It isn’t right.
She lied to me. Or so I told myself. She told me she was a trader in a hedge fund, so we were doing the same job, had the same interests, shared common concerns and goals. So I fell for her, I most certainly did. And it wasn’t just because she was so good-looking, even though she was. It was because of her manner, her talk, and indeed those interests we shared. We were soul mates as well as bedmates or I should say cockpit mates, and the former made the latter out of this world. I’d never felt like that before. I was in love, yes. So fuck me. I had been a fool.
But I still wanted her.
The thing is, working for a hedge fund—that’s about making money no matter which way the market moves, no matter what happens. God declares Judgment Day, you’re hedged. Okay, you’d have to trust God to pay out as being the final source of value. But any conceivable scenario less apocalyptic than that, you’re covered and you’re going to make a profit, or at least you’re going to lose less than the rest of the players, which is the same as making a profit, because it’s all about differential advantage. If everyone’s losing and you’re losing less badly than the others, you’re winning. That’s hedging and that’s what hedge funds do. Jojo worked for one of the biggest hedge funds in New York, I worked for a big hedge fund, we were a match made in Black-Scholes heaven.
But not. Because in many hedge funds the effort to maximize profit had led to activities additional to trading per se, including venture capital. But venture capital makes liquid assets go illiquid, a cardinal sin in most finance. Liquidity is crucial, a fundamental value, it’s the hyphens in M-C-M'. Venture capital is therefore small potatoes in most hedge funds, and VC people usually end up talking about “value-added investing,” suggesting that they aim to bring in expertise that will help whomever they are investing to succeed at whatever they’re doing. This is mostly bullshit, a flimsy excuse for the outrageous illiquidity of their investments, but there’s no denying that a lot of them cherish the delusion.
And this, I feared, was the rabbit hole Jojo had dropped into. That she wanted to do more than make money, that she wanted to make some kind of value-added investment in the so-called real economy, was worrisome. Eldorado was almost certainly leveraged a hundred times beyond their assets on hand, so illiquidity made them vulnerable. VC was super-longing and thus dangerous, because there was no such thing as super-shorting to balance it. This suggested Jojo had gotten emotionally overinvested in a small part of her company’s business, which was dangerous in itself, and indicated that her eye had strayed, that she somehow wanted more than what finance could give her, while nevertheless staying in finance. So there was delusion and pretentiousness and aspiration and lack of focus there that I didn’t like to see.
But now, damned if I hadn’t gone super-long on Jojo herself, in essence making the same kind of mistake: lost liquidity, desire for equilibrium, dislike of volatility, attachment to a particular static situation, which even the Buddha warns against. And in that very dangerous situation, my intended partner in the mutual project of coupledom, which was also a kind of venturing of capital, had not hit the strike price. She had walked on her option. Actually these financial metaphors were making me sick, while also continuing to pop up in my head in a way I seemed unable to stop. No, just stop. I liked her, I wanted her. She didn’t want me. That was what it really was.
So, to get her back, I needed to do things that would make her like me. Put it like that. Just start from scratch, that’s all.
Fuck fuck fuck.
Well, clearly I had to keep being friendly. I had to pretend to Jojo that I was okay with us moving back to the level of a friendship of two people who lived in the same neighborhood and worked in the same industry, and saw each other in a group of mutual acquaintances after work. That was going to be tough, but I could do it.
Then beyond that, I needed to find a means to reverse the usual way of the world. Instead of financializing value, I need to add value to finance. That was at first beyond me to conceptualize. How could you add more value to finance, when finance existed to financialize value? In other words, how could it be about more than money, when money was the ultimate source of value itself?
A mystery. A koan to stymie one. Something I pondered almost continuously as the hours and days passed.
And I began to see it in a new way, as something like this: it had to mean something. Finance, or even just life: it had to mean something. And meaning had no price. It could not be priced. It was some kind of alternative form of value.
One of the ways I managed to make trading on the IPPI work so well for me was by keeping close track of the real intertidal. Of course I could only really do that in New York, as it took site visits to do it; but whatever was happening in New York was pretty similar to what was going on in the other great coastal cities of the world, in particular Hong Kong, Shanghai, Sydney, London, Miami, and Jakarta. The same forces were at play in all these places, mainly aquatic stress, technological improvements, and legal issues. Whether the buildings were going to stand or collapse was one of the crucial questions, maybe the
crucial question. It was a different story for each building, although big data sets could be gathered, and algorithms created to judge the risk pretty well in various categories. It was in individual cases where it got most speculative. As always, it was safest to generalize and play the percentages.
But to research this question in person, I could get in the Jesus bug and zip around New York harbor looking at actual buildings, see how they were doing, rate them against the algorithms that were predicting how they were supposed to do, and look for discrepancies that would allow me to play those spreads better than other traders. Real-world inputs to the models, thus getting a leg up on the competition, especially on the many traders who traded in coastal futures from Denver. Real-world inputs were an advantage; I was sure of this because I’d been doing it for four years, and it had worked.
What I was seeing, to the point of confirming it to my own satisfaction, was that the models for coastal property behavior, my own included, were simply wrong about certain categories of building, something I was hesitant even to think at first, in case I somehow lost the encryption on my own thoughts, for instance by blurting something after hours in a bar.
So, pondering all these things as I zipped around the waterways of the lunatic city, it seemed to me that I might already have a way to do value-added investing, by putting a little venture capital where it would serve a social good, thus encouraging Jojo to reconsider me in some fundamental human sense. I could perhaps identify buildings that were more likely to collapse than the models had them collapsing on average, and figure out ways to upgrade them, putting off their collapse long enough that they could serve as refugee dwellings or maker spaces. Housing of any kind was scarce, because too many people kept coming to New York and trying to live here, out of some kind of addiction, some compulsion to live like water rats when they could have done better elsewhere. Same as it ever was! Which meant there was need for some kind of Jane Jacobs–like housing reform. This was more than I could handle, but some improvements in the intertidal, that I could try. The intertidal was my specialty, so that was where I could start. Try to figure something out.
So I abandoned my screens one morning and went down to my sweet skimmer and hummed out of the building onto Twenty-third, and headed west to the Hudson. Time to go out and put my eyeball to reality.
The intertidal zone of lower midtown sloshed back and forth over an area with a lot of old landfill, and that double whammy had brought a lot of buildings down. Thirtieth to Canal was a wilderness of slumped, tilted, cracked, and collapsed blocks. A house built on sand cannot stand.
Nevertheless I saw the usual signs of squatting in the soggy ruins. Life there possibly resembled earlier centuries of cheap squalid tenement reality, moldier than ever, the occupants risking their lives by the hour. Same as ever, but wetter. But even in the worst neighborhoods there stood some islands of success, waterproofed and pumped out and made habitable again, in many cases better than ever, or so people claimed. The mutual aid societies were making something interesting, the so-called SuperVenice, fashionably hip, artistic, sexy, a new urban legend. Some people were happy to live on the water if it was conceptualized as Venetian, enduring the mold and hassle to live in a work of art. I liked it myself.
As always, each neighborhood was a little world, with a particular character. Some of them looked fine, others were bedraggled, still others abandoned. It wasn’t always clear why any given neighborhood should look the way it did. Things happened, a building held or fell down, its surroundings followed. Very contingent, very volatile, very high risk.
So on this day I hummed in very slowly to have a look at Mr. Hexter’s old neighborhood, south of the fallen tower. It was south of the Hudson Yards, I noticed, a small bay that had lost the railroad tracks that used to floor it, leaving the shallows there open to tidal tear so severe that it was said to be as deep there as in the middle of the river. Whether seepage from that hole in the side of the island had caused this tower to fall was unknown, but there it was, its broken upper half taking waves right in its broken windows. It looked like a crippled cruise ship on its last slide to the bottom.
A lot of other buildings were following it down. I was reminded of those photos of drunken forests in the Arctic, where melting permafrost had caused trees to tilt this way and that. Chelsea Houses, Penn South Houses, London Terrace Houses, they all canted drunkenly. Not the slightest bit inspiring, in terms of investment opportunities. Recovery techniques were improving all the time, but there is no point to waterproofing a house built on sand. The graphenated composites and diamond sheeting are strong but they can’t hold slumping concrete, they’re more like very strong plastic wrap; they need support to work, they’re mostly waterproofing.
As I purred along the narrow canals between Tenth and Eleventh I caught sight of the Great Intilt Quad, up near the shore of the Hudson. Here in the first rush of skybridge building a group of investors had suspended a mall about forty stories above the ground, in the middle of four skyscrapers that anchored the skybridges holding the mall in air. This had thrilled people until the weight of the mall had pulled the four towers abruptly inward, dropping the mall five stories at once and breaking everything in it before somehow the towers held. After that people had gotten a lot more careful, and now the Great Intilt Quad stood there like a bad Stonehenge, reminding people never to hang too much weight outside the plumb line of a skyscraper. They were only built to hold up their own weight, as many engineers pointed out.
All these drunken buildings: how long could they last? In the eternal battle of men against the sea, which antagonist was winning? The sea was always the same, while improvements were being made in humanity’s ramparts; but the sea was relentless. And it might rise yet again. A Third Pulse was not out of the question, although big masses of ice at risk of sliding were not currently being identified by the Antarctic surveys; this was a finding factored into the IPPI. Anyway, wherever sea level went in years to come, the intertidal was always going to be in trouble. Anyone who tried on a regular professional basis to fight the sea in any capacity whatsoever always admitted that the sea always won in the end, that its victory was merely a matter of time. Some of them could get quite philosophical about this in a depressive nihilist way. Nothing we do matters, we work like dogs and then we die, et cetera.
So a time was going to come when all the weaker buildings in the intertidal were going to need major repair—if that was even possible. If it wasn’t, they would have to be replaced—if that could even be done!
Meanwhile, people were living here. Signs of squatting were everywhere: broken windows replaced, laundry hanging from clotheslines, farms on rooftops. Especially by day it was obvious. At night they would turn off their lights and their buildings would look abandoned, perhaps here or there candlelit for their ghosts’ convenience. But by day it was easy to see. And of course it would always be that way. Manhattan never had enough places to live. And you couldn’t make rents high enough to keep people away, because they dodged the rents and squatted wherever they could. The drowned city had endless nooks and crannies, including of course diamond bubbles holding the tide out of aerated basements. People living like rats.
This was probably what Jojo was hoping to ameliorate with her value-added investing. It was hopeless, really; even if you managed to do it, it would make you a kind of topologically reversed Sisyphus, digging a hole that always refilled, pumping out basement after basement only to have them pop, often lethally; then back to it again. Aeration! Submarine real estate! A new market to finance, and then to leverage, so that the cycle could repeat at a larger scale, as the first law demanded. Always grow. This meant that once the island’s surface was filled to the max, you first shot up into the sky; then when that effort reached the limit of the material strengths of the time, you had to dive. After the basements and subways and tunnels were aerated, no doubt people would start carving caves deeper and deeper, extending an invisible calvinocity down into the lithosphere, excav
ating earthscrapers to match the skyscrapers, buildings right down to the center of the Earth. Geothermal heating available at no extra charge! Apartments in hell: and that was Manhattan.
Except not really. One could think pessimistically when boating about in the abandoned ruins of Chelsea, trying not to look back at the furtive faces in top-floor windows and yet seeing the misery there anyway. But it was easy to clear one’s head of these dreary visions; just turn the bug and hum out to the great river and throttle up to hydroplane speed, lift off and fly, fly upstream and away, away from the wounded city. Fly!
I did that. The broad Hudson sheeted under me, its internal movements coiling and fracturing the dark surface. And there it was, standing around me on both sides of the river: upper Manhattan and Hoboken, both of them studded with skyscrapers taller than anywhere else, the two sides of the river competing for dominance by prominence, right in a decade when the revolution in building materials had allowed the construction of skyscrapers three times taller than ever before. And it still pleased the rich to stash away a billion or three in a skypartment somewhere in New York, visit for a few days a year, enjoy the great city of the world. No way Denver was ever going to match the view I was looking at right now!
I let the bug down onto the water with a ducky splash and headed in to the long dock floating under the Cloister cluster. The great complex of supertowers, each well over three hundred stories tall, loomed overhead like the visible part of a space elevator; it truly looked as if they pierced the blue dome of the sky, that they disappeared up there without actually ending. This effect made the sky itself seem somehow lower than usual, like a turquoise-blue dome in some immense circus, held up by a four-pronged center pole.