Stephen and Steven came from more or less the same socio-economic background: two parents, middle-middle class, products of suburbia and a decade we call the 80’s. Both went to college and shared some courses as well as a dorm wing together. They became fairly good friends but upon departing the maternal arms of university halls, their lives went separate directions much like a rail can split a train to either one or another destination.
Stephen always knew he wanted to be a Public Accountant like his father from the time he could run his own adding machine at the age of four. His infatuation with numbers bordered upon obsessive (Stephen’s mother actually had a few worrying conversations with his doctor about it, privately of course) and he was certain of his path upon entering his freshman year of college. After a few semesters of business classes though, Stephen’s interest piqued enough that he changed his direction from public accounting to business major and set his sights on Wall Street.
Steven slogged it out with accounting and his degree earned him a spot as assistant finance manager at the great and honorable metropolis of Sacramento, California. His aspirations focused on the challenge of climbing the corporate ladder, he chose city employment since he felt he could make a difference at the local level. He was idealistic and convinced that governments wasted more money than they ought – he wanted to change that mentality. Steven married a nurse, had three kids, and coached their soccer teams while at the same time achieving his goal of securing the CFO (Chief Financial Officer) position of the aforementioned great and honorable metropolis.
At their ten-year reunion, Stephen and Steven had similar stories to share about their success and its amenities: travel, bonuses, and dwellings (Stephen had a modest Manhattan gig, Steven just purchased one of the newer homes in a gated community outside of Sacramento and was also investing in other building projects). Stephen enjoyed the growing niches of Wall Street, while Steven reveled in his budget slashing abilities and his ties with city council allowing him development connections. It was 1998, Billary was in office, and the financial opportunities they shared with each other were promising, invigorating, and…. well, big. They vowed to stay in touch and left their three-day reunion with a sense of camaraderie and importance: they were both affecting financial change and enjoying the accompanying adrenaline rush.
The adrenaline rush lasted nearly until the next reunion. Stephen (always on the lookout for the ‘next big thing’) managed to wiggle his way into a very specialized branch of mortgage bonds, nearly hidden away in the behemoth known as Deutsche Bank. He spent hours in a similarly reclusive office, poring over numbers and synopsis, participating in conference calls, and directing the purchase of millions of dollars of insurance against the bonds in the unlikely event that the entire housing industry would suddenly collapse. At the end of a double-digit workday, Stephen would slink off to the nearest watering hole with a few of his cohorts where they would rant about the insanity of their days’ work and the fact that they were getting away with something they knew wasn’t quite right.
Steven was investing in housing as if it were gold. Indeed, for a few years, the market grew as if someone had found just the right fertilizer for it. His connections with the city council allowed him favorable development terms and he borrowed against his own house and the two rentals he owned as a means to further his sub-division – building frenzy. He bought, built, sold, and extended his credit far beyond what he knew his limit to be…..and his bank was more than willing to throw money at him. On occasion, Steven would worry about his debt ratio (he recalled his business classes and their logic), but this or that detail concerning the next building project always saved him from admitting there was something wrong with the entire operation.
He was forced to admit it by the time of their twentieth reunion, which he barely made. He had lost everything except his family and was utterly ruined. The only reason he decided to check out the reunion was the hope that maybe there were others like him with whom he could commiserate. Stephen attended the reunion only because he was experiencing some downtime from Wall Street. The fat cats were lying low after they blew out the housing bubble and many of their underlings had scattered for a time to let things settle.
Stephen barely recognized Steven when he saw him. Steven spent the previous few months watching his entire life’s effort dissolve in front of him, similar to the way a single, lazy ocean wave can claim a sand castle. He had lost his job (massive government layoffs accompanied the housing crash), his wife was forced to go back to work, his two oldest sons were sharing a bedroom and their higher education options were severely limited. He was dressed haphazardly, his hair needed a style, his razor had apparently gotten lost. The overall effect was disconcerting to Stephen. He rushed to his old friend and scooped him up in a hug, “What the hell happened to you?!” he asked.
Steven mumbled something about the housing market crash and Stephen took off with the narrative: “I know, wasn’t that some ride?” he asked and then went on to give the juicy, sick details of buying poorly packaged mortgage bonds. He often interjected an excited “We couldn’t even believe they let us get away with this shit.” Stephen was caught up in his story of Wall Street mania and didn’t notice that his friend’s expression had changed from apathy to a combination of deep interest and ….. recognition, as if a lost memory suddenly made its way to his conscious. “….We had to fight it out a bit, but they gave us our bonuses any way and I am off to my favorite Tahitian island after this reunion.”
Long silence followed this last comment while the two Stev(ph)ens just looked at each other. ‘Tahiti’ hung in the air like the acrid smoke of a firecracker and refused to go away. Stephen was first to speak, he sort of cleared his throat and mumbled a poor criticism about the tropical locale as a means to appropriately diminish the enthusiasm he had just moments ago. He realized that he hadn’t asked Steven about his life the past ten years and lamely inquired about it.
Steven simply laughed a loud, long manic laugh. It made Stephen uncomfortable – he downed his gin and tonic in one gulp, looking around at the same time for an escape. What occurred to Steven was this: here, right before his very eyes was the personification of the entire racket that led to his downfall. He heard and read reports coming out of Wall Street and understood enough to know that whole setup was one mass rip-off of millions of people by a small group of number crunchers tucked far away in isolated offices and presumably unaware of the devastation wrought by their deeds. He laughed because he had a chance to tell one of those bloodsuckers exactly what he thought of them – an obsessive monologue he’d rehearsed a million time over in his head. He laughed because of the absurdity of it all. He laughed because it was either that or a mental meltdown. He laughed because he could see it made his friend uncomfortable and that was the only safe revenge he could affect.
He stopped suddenly, catching Stephen off guard once again, and wrapped his big arms around his friend in a hug that could be interpreted a thousand ways. Holding him at arm’s length, hands upon Stephen’s shoulders, Steven looked his friend in the eye with immense scrutiny and said “We each had a different end of the same stick, didn’t we?” He turned around and walked out of the reunion without a goodbye to anyone. Stephen was left holding an empty glass, a shallow plane ticket, and a laugh that would haunt him for years.
(Acknowledgement must be made to author Michael Lewis and his book “The Big Short” which intricately relays the story of the housing bond bubble and the persons involve. It was a rich resource for this storyline. No similarities should be drawn from the ‘Stephen’ character in this story and Steve Eisman in Mr. Lewis’ narrative. I chose the name simply for the two variations of spelling since I wanted to work with the idea of the two characters also having their name in common. I liked the way it provided consistency and delineation at the same time. Be Well, Frankie)