Adam Haslett - Union Atlantic

“What about our own trades?” Holland asked. “Where do we stand?”

For all his bluster about cash flow, this was why he had asked Doug to his office: to hear news of profit.

“Hong Kong netted thirty-five million last week. Next week, it’ll be forty.”

Holland glanced up, raised his eyebrows, and smiled. Then he strolled to the opposite side of the office to gaze from the window. Beneath a cloudless sky, the water of the harbor shimmered, a white ferry churned slowly from the pier, planes in the distance glided onto the peninsula of runways at Logan, the whole brilliant vista softened by the tint of the glass.

“That guy from Time called again,” he said. “He’s coming next week. They’ve decided to go ahead with the profile after all.”

“Congratulations,” Doug said.

“Thanks. So what’s the news with you? Are we neighbors yet? Have you moved out to Finden?”

“Yeah. Which reminds me. You know a woman named Charlotte Graves?”

“Never heard of her. What the hell are you going to do with all that space, anyway?”

“I don’t know,” Doug said. “Make a killing maybe?”

Holland laughed. “My wife loathes people like you,” he said. “Probably because she used to be one.”

From inside the blooming lilac, Charlotte whispers, Come. You’re missing it. Come and see . The pleasure, somehow, always hers. Mother and father with their drinks on the veranda in wicker chairs watching; traffic whirring in the distance on the post road. You’re missing it , his sister whispers. The air is soft in the first spring heat. Henry tries to walk toward his sister but his legs are fixed to the ground. Her whispers fill his ears from behind those coned purple flowers, the sunlight on the arced branches a brilliant diffusion. Here, what you’ve been looking for, here it is , she says, as the siren begins to sound.

Swallowing dryly, turning his head on the pillow, Henry half opened his eyes. The room was pitch-dark, only one edge of it discernible from a strip of light under the door. A hotel, certainly: the familiar hush of conditioned air falling into the padded gloom of rug and curtains and armchair, the tiny red signals of the television and the motion detector. But where? What city? For a moment, the yearning for a world saturated with meaning pulled him back toward sleep, but he caught himself and reached for the bleating phone, the grid of the present regaining administration of his mind, leveling in an instant the fading kingdom of dreams.

He was in a suite on the Atlantic coast of Florida and it was one fifteen in the morning.

“Mr. Graves? Is this Mr. Henry Graves?”

“Yes. Who is this?”

“Sir, my name is Vincent Cannistro. I’m vice president of market operations at Taconic Bank.”

“Hold on a moment.”

He reached up to switch on the light.

“This better be serious,” he said. “In which case, why am I talking to you?”

“That’s a perfectly fair question, sir. Fred Premley, our CEO, is currently in Idaho and we have been trying to reach him by cell phone for a number of hours now. I have a car headed to his location at this time and we expect to be in contact with him shortly.”

“And your chairman?”

“Our chairman, sir, he’s in that same location.”

Henry sat upright and reached for his glasses, bringing the room into focus. Briefing books for the conference were piled on the desk opposite.

“So you’re in a bind and your management’s gone fishing. Have I got it right so far?”

“Sir, I would have to say that is more or less correct, yes.”

“All right, then, Mr. Cannistro. What’s your situation?”

There was a pause on the line. Even in his groggy state, Henry could sense the fellow’s unease. He’d heard men’s voices like this before, taut as a drum, overly formal, restraining with effort the profanity they’d been hurling at their subordinates for hours or even days. This man was making a call well above his pay grade. If things didn’t turn out right, he could lose his job.

“We’ve got a liquidity problem,” he said.

“Well, you don’t call at this hour if you’re unhappy with the examiners. What’s your position?”

“We’re on the short end of an interest-rate swap. We owe a hundred and seventy million. Payment was due nine hours ago.”

“A hundred and seventy? Whose rates were you betting?”

“Venezuelan to rise.”

“Jesus. That was stupid. I assume you hedged it. You covered it with something, right?”

“Sir, that’s the problem. The model had us covering the position with oil futures. They were supposed to drop if Chávez trimmed his rates. They didn’t drop.”

Henry rested his head back against the wall. For a moment he’d thought maybe his caller had jumped the gun and done nothing more than further damage his bank’s reputation with the Federal Reserve, in which case he could go back to sleep. Pulling the covers aside, he rose, took a pad of paper and pen from the coffee table, and settled himself into an armchair.

“Mr. Graves, are you there?”

“I’m here. That’s the most inane hedge I’ve ever heard of. And you’re telling me you can’t raise the money for the payment?”

“As of this hour, no.”

“I see,” Henry said, nodding to himself. Under normal circumstances even a small retail operation like Taconic would have credit enough with the market to cover such incompetent trading. But they had been carrying a lot of bad tech loans for a year or more now and their retail base was being squeezed on one end by Chase and on the other by the national discounters. In the last few weeks they’d begun borrowing heavily to cover their own trading positions.

As president of the Federal Reserve Bank of New York, Henry Graves had oversight responsibility for all the banks in his district, including Taconic. He also regulated the large bank holding companies that had come to dominate the industry. But the New York Fed, unlike the other regional Federal Reserve banks, was more than simply a supervisory institution. It was the operational hub of the whole Fed System. It acted as the Treasury’s agent in the market, buying and selling T-bills. Nearly every country in the world held some portion of their sovereign assets in accounts at the New York Fed. The wire service the bank ran cleared a trillion dollars in transactions each day. Simply put, Henry Graves was in charge of the biggest pumping station in the plumbing of global finance. His most vital function was to keep money moving. To do it quickly. And, above all, to do it quietly.

Which meant making sure a situation didn’t become a crisis. Taconic’s problems, small as they were in the scheme of things, couldn’t be allowed to spread. The bank’s ultimate failure, if that’s what it came to, would pose little systemic risk. In receivership, it would be broken up and sold. But in the short run, a nonpayment of this size could cause trouble for Taconic’s creditors. A resolution, however temporary, was needed before the morning bell.

“Who do you owe the money to? Who’s your counterparty?”

“Union Atlantic.”

Henry’s thought was one of relief. At least they were dealing with a known quantity, and a bank under his supervision. Union Atlantic meant Jeffrey Holland. A bit glib, a bit of a showman. In it for the sport of the deal. Not Henry’s favorite banker, but he could be reasoned with. He and his wife, Glenda, had showed up at the same hotel in Bermuda where Henry had taken Betsy just after she’d gotten sick. The four of them had eaten dinner together out on the terrace one evening. They’d sent a huge arrangement of flowers to the funeral.