Exordium


Exordium
Dennis Gibb

Copyright 2015 Dennis Gibb
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means,
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copyright law.
ISBN: 1507789203
ISBN 13: 9781507789209
Library of Congress Control Number: 2015901733
CreateSpace Inependent Publishing Platform
North Charleston, SC
 Acknowledgments
No book, regardless of the authors ego, gets written by itself, and while the clich it takes a village
springs to mind as a description of the process, it is imprecise. A book is more of a river, a combination of
individual streams of thought that flow downhill, merging and growing. The purpose of the
Acknowledgments section is to identify those streams.
The grandest of them came from my parents, Henry and Luella Gibb. Both are gone now. If I have one-
tenth of their strength, I consider myself blessed. Dad always had a hard time with me. I seemed to be so
different from him, but he was like those of his generation: a tower of responsibility, strength, sacrifice, and
love that is all too rarely seen in the modern world.
While this is a work of fiction and the characters are not real people, the narrative contains influences
of those I really met along the way. It would be too burdensome to name all the members of the various
army units I served with, but they aided me in immeasurable ways to become the man I am today (some of
them will be saying right now, Huh, failed again!). The men of Bravo Battery Second Battalion, Ninety-
Fourth Field Artillery from 1971 and 1972 deserve a call out. You let me lead you, and that was inspirational
for me.
My conjugal family, of course, helped immeasurably in a lot of ways in the composition of this book
through encouragement, providing me with material, and mostly in letting me alone.
My heart will always have a soft spot for H. Ross Perot. He took a chance on a bunch of slightly off-
balance ex-military officers and provided career paths for us when few existed for those with our recent
experience. He got me into the investment business, which has been my home for forty-odd years.
When you write something like this, it takes a good deal of time, and part or all of the manuscript gets
read by various people who provide input. Rosemary, Allison, Beth, Franz, Phil, thank you for your
guidance. I dont take criticism well, but you gave it in ways that I was able to.
The most patient of all those who heard or read parts of this book were my two dogs, Frodo and Eowyn,
who lay under the desk and listened endlessly to me read back my own words. I just hope they will not
judge me too harshly for my assaults on their ears.
Robert Kidd took the first crack at trying to edit this into a readable book, and while he and I didnt
agree on timing and methods, what you will be reading is in large part due to his work.
Finally, to all the hundreds of thousands of people who interfaced with me over sixty-odd years of life
and unknowingly gave me glimpses into the human condition, thank you. You are all fascinating, each in
your own way, which is the real beauty of human existence.
 A Foreword
This is a book by a man about a man growing up and maturing in what was at that time an almost
exclusively male world. This book makes no attempt at political correctness, inclusiveness, or to
conform to any other popular meme. There are parts that will be offensive; I have a unique talent
for being an equal opportunity offender, so there will be no apology.
 This is a work of fiction. The characters, incidents and dialogue are drawn from the authors
imagination and are not to be construed as real. Any resemblance to actual events or persons, living or
dead is entirely coincidental.
 Chapter 1
The Beginning of Things
Waking up from being knocked unconscious or from general anesthesia, you go through a process. At first,
you sense coming out of a long, dark tunnel. One eye blinks open and gazes about uncomprehendingly.
Then sleep descends again.
In the second stage, the tunnel is a bit shorter. Both eyes open with some understanding of what they
see, as the brain is somewhat able to associate the images with its stored patterns. Pain from the blow or
operation is felt for the first time; then sleep comes on again, blessedly.
In stage three, the tunnel has virtually disappeared. Both eyes open with a rush and images flood in,
almost overwhelming your ability to recognize them. The pain is now intense and disturbing. This time,
sleep does not come as quickly, and the pain sears, burns, throbs, and pulses throughout your entire body.
If youre lucky, someone gives you pain medicine, and the relaxation only opiates can provide flushes the
pain away.
Hed just finished struggling through the third stage of his recovery but was unlucky; no one came to
take away the pain. He tried to move, hoping to relieve his suffering. He could move his feet, but from the
knees up, he felt a constriction, like a soft, heavy weight on his knees and thighs. He struggled against the
weight, but the pain stabbed up into his abdomen and chest like a hot wire.
He moaned and passed out.
Sometime laterhe had no idea how much laterhe awoke again. He still hurt, but the pain had abated
somewhat. He still couldnt move his upper legs or hips, and now he couldnt move his right arm. He looked
to his right and saw two clear tubes. One ran down to the inside of his elbow, the other to the back of his
hand. Following the tubes upward, he saw the IV bottles hanging like bananas from metal hooks. Standing
next to the bananas was a woman in army green, her plain face emotionless and without makeup. Just as he
was about to say something, she walked away.
Beyond where shed stood, he could now see a figure in the next bed, white sheets pulled up to the
chest, shoulders, and head elevated by pillows. A mask partially hid the face. Next to the bed were more
bananas and a green bottle of oxygen. To his left, another figure, and beyond that, more. With considerable
pain, he raised his head and over the lump on his middle. He could see bedridden figures across a narrow
aisle. Hospital, he concluded and lay his head back down.
He could hear sounds of people talking and the defining sound of Vietnam: helicoptersHueys, by the
sound of their rotorstoing and froing outside. There was little noise in the area immediately around him.
As he bounced his head back and forth, he noticed that neither of the figures closest to him moved. He grew
tired again and fell back to sleep.
He awoke after an indefinite time but felt that hed had no rest. His mouth was dry and metallic tasting,
the only pain now a throbbing in his midsection. Looking left and right, he saw there were still figures in
the beds, but they were different. The one to the right was black; he was sure the first time he looked, the
guy there was white. His left-hand partner was still white, but there was no one beyond. He concluded he
must be in a different room. The helicopter noise had diminished, but he could more distinctly hear wheeled
vehicles now, and in some vague way, that wasnt as comforting.
He heard clattering nearby and strained his head and neck upward painfully to see a person in jungle
fatigues entering the room, pushing a high cart. The cart moved steadily toward him, stopping at the foot
of his bed. The guy pushing it was a Mexican Spec 4.
Hey, LT, said the man in a slightly accented voice, using the universal Vietnam lingo for a lieutenant
among the enlisted.
Hi, he croaked back. His mouth felt like the Russian army had walked through it in stocking feet, his
tongue strangely heavy and nonresponsive.
Ill get you some water, said the Mexican.
Good, he thought. That means I dont have a belly wound. They told us in OCS that you never give
water to a guy with a belly wound.
 The water was piss warm, like all the water in this place. Even the ocean was warm. But this water
tasted somehow differentbetterbetter than beer, better than an iced Coke on a ninety-degree day when
the air was so heavy with moisture, you could see it. Nothing was better. It sloshed around his mouth, and
so desiccated were his tongue and cheeks that little found its way to his throat. The second sip went farther,
and he could feel the life returning. The relief from the water spread through his chest and felt like a cool
cloth lying across his chest. It was heaven. Wow, that tastes Grrrrrreat! he said in a poor imitation of
Tony the Tiger.
The Mexican chuckled, You want anything to eat? The LT shook his head and the cart moved on,
stopping at the next bed and then reversing and leaving the room. The water was hitting his stomach now
and he felt a bit nauseous, so he held the plastic cup and straw in his left hand and lay back.
 Chapter 2
The Wow
Fully awake, he started his habit of analyzing the situation. He was in an American hospital. That was good,
because the alternative was medical care delivered by the North Vietnamese Army (NVA), or even worse,
the Allied South Vietnamese Army of the Republic of Vietnam (ARVN).1 The bad news was that he was
wounded.
All of his body parts seemed to be working and his face was untouched, but there was this restriction
in the middle and the lump over his lower abdomen restricting his movements. What was it? He could feel
his stomach, and there was no shit bag next to him, so his intestines were intact.
His drug-dulled synapses finally connected the lump with stories from flight school and the events of
the last few days. Oh my God, he thought, the wow! He had gotten the wow! Shit, he said to himself. His
mind raced on. If I had the wow, it would hurt like hell. Ive been kicked in the balls before. You cant move.
And that was only a foot. Surely a bullet would hurt more.
He was distracted by the sounds of footsteps in cadence, and into the room came marching four people:
two women in fatigues and two men in white surgical outfits and long lab coats. All four wore stethoscopes,
and the long tubes holding the chest pieces swayed in a rhythm opposite the strides of the intruders, making
them look like a small herd of elephantstwo of them whiteout for a stroll.
They were all in step! In step in a goddamned hospital! Most of these medical yahoos couldnt tell one
rank from anotherand theyre walking in step? What a joke! They were marching in a column of twos,
or, in the argot of the military, a column of ducks, and they marched down to the fellow across the aisle,
stopped, and raised their clipboards. One of them began to discourse in the patois doctors use to make sure
no one understands them. After theyd all listened to the patients heart and taken his pulse, they marched
away.
He went back to his evaluation. He noticed that all the other patients were in hospital gowns, but he
was still in his flight suit. His boots and helmet were gone, but that was all. He squirmed in the bed and
stopped quickly as the pain reminded him that things werent well. But his movement uncovered that, for
some reason, his .45-caliber pistol was still there by his side. The returning pain drove the fog from his
mind, and he began to remember what had happened.
For the first three months after he had arrived in Vietnam, hed flown for the 101st Airborne Division,
the famed Screaming Eagles of World War II. His unit had been created to break up the enemy formations
threatening the US forces remaining in-country. They flew OH-6A helicopters, which in parlance of the US
Army meant Observation Helicopter Type 6, Model A. The troops called them Loaches; others referred to
such a ship by its distinctive shape: The egg with a hard-on.
The unit had started with nine Loaches and eighteen flight crew, and between September 1971 and
January 1972, every one of the original crew except one had been killed. While he alone had survived, hed
been shot down six times, and three observers sitting less than three feet away had been killed.
In the end, the idiots whod come up with the idea of sending unarmed helicopters out as bait to draw
enemy fire admitted that 94 percent casualty rates were unsustainable. The unit was ordered to stand down.
Hed been removed from flight status, so he was a floating officer. Finally, in March of 1972, he was
assigned to Military Assistance Command Vietnam (MACV) in Dong Ha, twenty miles below the
demilitarized zone (DMZ) marking the division between South and North Vietnam.
The war, for the Americans, was clearly winding down. The 101st had gotten orders to move to the
world. Once they redeployed, there would be only a single brigade of American troops left in the most
northerly section of Vietnam; it bore the designation I Corps1 (or Eye Corps). As the Americans disengaged,
the level of attacks on the South Vietnamese troops increased, and you could feel the pace of the war
changinglike a storm front when the pressure of the air changed and you knew before the rain hit that it
was coming.



1 NVA: North Vietnamese Armythe bad guys. ARVN: Army of the Republic of Vietnamthe good guys.
 In late March, the commander of the Dong Ha MACV unit, K. Leslie Kirk, received orders from MACV
in Da Nang, which in turn had gotten orders from MACV Saigon for MACV aviation assets to start
observation missions along the DMZ and the Laos-Vietnam border to discover any large incursions by the
NVA.
Some genius had come up with the same idea that had worked out so well in the 101stsend up
observation helicopters with a pilot and an artillery observer to find the enemy and direct fire to the targets.
The theory was that the artillery, air, and naval assets would be able to respond before the enemy shot down
the helicopter. They were betting their lives on the efficiency of South Vietnamese artillery batteries. Hed
never been a gambler, but this bet seemed foolish even to him.
The first day confirmed his feeling. He and the Vietnamese artillery officer took off from Dong Ha at
dawn, and about the time there was good light on the ground, they saw ten soldiers moving south out of the
DMZ into South Vietnam. The only friendlies that would be coming out of North Vietnam wouldve been
special ops, and their briefing contained no mention of any friendly operations. On seeing the enemy, he
had reduced power and moved away to the south to avoid detection. The Vietnamese officer prepared the
data for the artillery and called it to an ARVN battery. The battery told them that the time of flight of the
rounds, once fired, would be forty-seven seconds.
He took the helicopter around to the west and moved slowly back east to make sure the target was still
there. Usually when an artillery battery fired, they told the observer by transmitting the word shot. Five
seconds before impact came the word splash. Theyd received no confirmation of firing even ten minutes
after the data had been sent.
It was dangerous to hang around over territory of uncertain loyalty, and he finally decided to call the
MACV liaison with the ARVN artillery to see what was going on. The LNO told him to stand by. Like he
had some place else to go! After a long two or three minutes, the LNO came back and asked that they verify
that the target was the enemy.
To do that, he had to get very close or overfly the soldiers, which surely would alert them to discovery.
He told the LT to get ready; it was going to be a quick pass, and he rolled on the throttle mounted on the
collective pitch. They passed ninety knots and flew right by the soldiers, who looked up almost in arrogance,
and one even wavedthey were unafraid! A few seconds later, he discovered why.
As he was pulling up on the collective, adding in left pedal and pulling the cyclic to the left, the air in
front of the windscreen was bisected by two streams of green tracer rounds, the sure sign of 12.5 mm
machine guns. Theyd fired too early. He let his feet off the pedals. Without the pressure of his feet, the tail
rotor went to a neutral position and the helicopter torqued around the main rotor shaft to the left. The
airframe groaned with the G forces and then again as he stomped the right pedal to stop the rotation. Just
as quickly as it had started, they were headed back west, away from the machine guns and once more over
the soldiers.
Once clear, he came around in the coordinated turn they taught in flight school and went into a non-
ground-effect hover.
Trung tei, he said into the intercom, using two of the six words he knew in Vietnamese. No answer.
He looked over, and the LT sat there frozen in his seat, staring straight out the windscreen. Trung tei!
he repeated more loudly, using the ugly American trait of shouting when a foreigner doesnt understand.
Still no response.
A motion drew his eyes to the lieutenants Adams apple, which was bobbing up and down in response
to rapid swallowing, and then the lieutenant let loose a stream of vomit, which, judging by its volume,
apparently contained every meal hed ever eaten. The green-yellow mess shot out and splashed on the
windscreen, instrument panel, and the floor. It was followed by another, lesser stream.
Fighting to control his own stomach, he hit the push-to-talk switch. Termite Timer Three Alpha,
Termite Timer Niner One, over.
The response was immediate. Termite Timer Niner One, this is Termite Timer Three Alpha Romeo,
over.
Timer Three Alpha Romeo, Timer Niner One, RTB, over.
Niner One, Three Alpha Romeostate reason RTB. Over.
 Three Alpha Romeo, Niner Onebarf obscuring instrument panel. Over.
Niner One, say again, over.
Three Alpha Romeo, my AO barfed his guts all over the inside of the cockpit! I cant see any of the
instruments!
Niner One, this is Timer Three. RTB. Over. Crap. Timer three was the S-3 Air, and his reputation
was as an asshole.
Timer Three, Timer Niner One, roger, out.
He turned the OH-6 to a heading of ninety degrees magnetic. This would take him south of the enemy
and particularly away from the 12.5 mm machine guns and bring him to the coast in about five minutes.
From there, hed turn south for fifteen miles to Dong Ha.
The Vietnamese LT was still sitting there with barf all over his uniform, and the stink was overpowering
even with an eighty-knot wind flowing by the open doors, so he cranked on more throttle. As the speed
passed ninety knots, he noticed that the air was full of droplets and realized that the increased wind was
atomizing the barf.
What a shitty thing. No quick way out of the smell and mess, he thought.
As he got a visual on the town of Dong Ha, something else came to his nose. It was a terrible smell, the
rotten egg smell, and it was mixed with that of burning iodine. The iodine scent was a sure sign of either
pot being smoked or an electrical fire. He did a quick cast around the cockpit to see if there was smoke
anywhere. Then it hit him.
He looked over at the Vietnamese, and if a human who has just barfed all over himself could look any
more miserable, this one did. His eyes were wide, bulging out of his head, and the head itself was moving
back and forth in quick movements. He made eye contact, and in a flash came the realization: The fucker
shit his pants too!
He was cleared to land immediately, and he flew downwind, made the crosswind leg, and then came in
over the 35 number on the runway. He came to the regulation ten-foot hover, then to a four-foot hover,
and then taxied to the flight line, where he set the bird down.
He brought the power to idle, did a quick check of what instruments he could with the barf coating, and
shut down. At some point, the Vietnamese LT unassed the helicopter and ran for the latrine, trailing behind
him shit, stink, and the remains of whatever hed eaten in the last week. Before the rotor stopped, Sgt.
Blakely, the crew chief, was next to the door. He was not happy.
That had been on Monday morning. Later in the day, they learned that Lt. Semore had taken fire while
flying the other OH-6A and crashed out near the hinge where Laos and South and North Vietnam came
together. The crew had been recovered, but the helicopter was lost. That meant that the aviation section was
down to two OH-58 Kiowa, the other kind of Loach used in Vietnam, and his deadlined OH-6.
He noticed a larger number of chaplains in the area than usual, and someone told him it was Easter
Week and they were ministering to their flocks. He spent most of the rest of the week working with Blakely
and the crew. Not that he was a good mechanic, but it kept him out of the way of all the crap details.
The fire and patrol bases strung like pearls south of the DMZ were taking increased mortar and rocket
fire, and probes of the wire were increasing. The ARVN artillery battalion up the road was firing all night,
almost every night, and there was an endless line of deuce-and-a-half trucks rumbling by the MACV camp,
taking ammo to the guns.
On Thursday, he was assigned to fly one of the fifty-eights on an inspection trip for some ARVN
colonel up from Saigon. They flew around for about ten hours, and during that time, he was able to spot
undeniable enemy activity on the south side of the line. He dropped the colonel off at an ARVN artillery
group a bit north of Hue and got back to base at about 1500. After he filled out the pilots bitch sheet of
what was wrong with the helicopter (plenty) and made the proper log book entries, he was called to the air
operations office.
It was the full-meal deal. All the other pilots were there even though there werent enough aircraft for
everyone. The assistant S-3 Air, Lt. Doncasheff (usually known as Donkey Dick), was there, and most
unusually, Major Densmore, the S-3 Air, was in attendance. In the month hed been with the MACV, hed
only seen Densmore at one briefing. Sgt. Eaton, the supply sergeant who was always a good source of
information, told him the good major had a Vietnamese honey in a village down the road and spent most
of his time there.
Densmore was a strapping son of a bitch, about six-two or three and 220 pounds. He had a jaw like a
shovel and big, big shoulders, not only wide but so thick they strained the shoulder seams of his fatigues.
He had reddish-blond hair that in a strong light made it look like he had no eyebrows. The Vietnamese sun
had burned his face to a permanent red, and set in the crimson were blue eyes that could cut like diamonds
when Densmore was mad.
Densmore took over right from the beginning. He posted on the map behind him the location of all
ARVN units and then with the help of a clerk began to post red markers where there had been enemy
activity in the last forty-eight hours. There had been rumors of more attacks, hed seen evidence the day
before, and now all of that had been proven correct. In the Army, rumors are often more timely and correct
than the official word.
Then Densmore delivered the orders. The area between the forward edge of the line of ARVN bases
and the south side of the DMZ was declared a free-fire zone; any activity in the area was presumed to be
hostile and was to be engaged by any means available. The DMZ was divided into three zones. They would
depart in the predawn darkness to arrive over the target area at BMNT (begin morning nautical time),
which was the earliest point in the day when a target could be identified. This was the best time to catch the
enemy. Orders were followed by long discussions of refueling and maintenance stops, coordination
instructions, and of how to cooperate with ARVN.
Three Vietnamese artillery officers were introduced as the AO in each aircraft, and he was thankful that
the shit-for-brains hed last flown with wasnt there.
The last thing in the briefing was to assign call signs.
Fergusson! Densmore boomed, Youre Alabama Fortune Niner One. Semore, you get Niner Four
and see if you can bring the bird back whole this time. This was followed by the nervous laughter of brave
young men in a gallows-humor situation.
Johnson tensed involuntarily as he waited. Would he get his own helicopter, fly as an observer in the
Hueys, or be the replacement guy?
Johnson, you here? Densmore knew full well he was.
Yes, sir, Johnson replied.
Youll be Niner Five.
Yes, sir.
Johnson, came the voice of Donkey Dick. Donkey Dick was up for promotion to captain and expected
everyone to call him sir. He was a first lieutenant, as was Johnson, but DD had been commissioned earlier,
so by rights, he was Johnsons superior. They hated each other, and Johnson purposely avoided giving
Doncasheff the respect he demanded. Youre only getting to fly because of your experience with this sort
of thing in the First of the Worst. I think youre unfit to fly and dangerous to others, but the Major overruled
me. Im going to watch you like a hawk, and you screw up once, youll be flying crop dusters for the rest
of your army careerwhich cant be too short for me!
Oh, and Johnson, Donkey Dick continued, not through torturing him, I hope you wont need to
fortify your courage with your friend Jim Beam tonight, he said with the nasty smile of the tormentor who
thinks he has had the final word.
Doncasheff, like most of those involved in air operations, had heard all the stories about Johnson in the
101st. When, shell shocked by the constant loss of his friends, terrified of being next, flying ten hours a
day, seven days a week in all weathers, like some well-trained mule, hed turned to drinking Jim Beam as
an escape. Eventually, he got to drinking a fifth a day.
Hed been able to fly, although not too well, and perhaps that had saved his life. But it all came to an
end one morning a few days after Christmas, when the deputy commander of the division decided to have
a look at the operation. He talked to the CO, LTC. Mitchell, and the other pilots and then took a walk down
the flight line. As he walked between two of the helicopters, he noticed a figure hanging out of the cockpit
of one of the OV-1 Mohawks parked at the back of the flight line.
 These were spy planes, and they flew high enough to be equipped with oxygen systems. On mornings
when Johnson just couldnt hack it, he paid the security guard at the Mohawk to let him suck pure oxygen
from the masks, which returned a sense of awareness to his alcohol-fogged brain. It was, of course, against
regulations to be near the plane without clearance and definitely a violation of something to bribe an enlisted
man.
The General set sail for the Mohawk, and just as he arrived, Johnson, tooted up with oxygen, jumped
down off the cockpit ladder. The jump had been ill advised, and a wave of dizziness and nausea swept up
in him.
What the fuck are you doing up there, mister? the General barked.
Igulps of airIgulps of air, burpI
This isnt the goddamned navy. What the fuck is this aye, aye shit? I asked you a question, LT!
Yes, si He never got the rest out as the dizziness forced his head down and the nausea of too much
booze and no food erupted into full-scale gastric revolt. Before the general could utter another profanity,
his highly polished jungle boots were surrounded by a pool of shiny, green, mucous-thickened vomit, and
Johnson lay passed out on his back.
Johnson looked at Doncasheff with pure hatred and said quietly, No, I wont have to, Jerry, but at least
I have courage to fortify. There was a collective intake of breath around the room. Hed just simultaneously
been insubordinate and called the assistant S-3 Air a coward. DD leaped up, fighting mad.
Enough, you assholes! bellowed Densmore. Johnson, Doncasheff, I dont know what it is between
the two of you, but if I didnt need both of you Id let you take this out back and settle it like men. You act
like punks. Youre fucking United States Army officers! Johnsons blood was up, and he opened his mouth
to reply. Densmore, knowing what was coming, said, Next word from either of you earns a court-martial.
Johnson snapped his mouth shut so hard, his teeth clicked.
Johnson stormed out of the ops hut and down the walkway. A few yards from the ops hooch was a
basketball court that was a black social club. Johnson was held in pretty high regard by the black enlisted
because he was irreverent of Donkey Dick and the other pompous white officers and redneck NCOs. He
was held in especially high regard by Sergeant Johnny Davis because Johnson had defended Davis when
the most racist officer in the 101st, a black lieutenant named Newsome, had tried to court-martial Davis on
some trumped-up charge.
Davis saw Johnson storming down the walkway. Hey, LT. you look like DDs been after you again.
Hey, Sergeant Davis, Johnson replied. Hed been taught by his army-officer father to always address
an enlisted man by his rank, and he tried particularly hard to do it with the black soldiers. Yeah, we had a
briefing, and he went after me again about my time with the Belching Buzzard. What an asshole!
He one tired-ass motherfucker. This from Specialist Five Jefferson, one of the aircraft mechanics.
Johnson said nothing, not because he doubted that DD had sex with his mother, but because he was too
mad to respond.
What was the briefing about, LT? asked Davis.
Change in ops due to all the hits on the ARVN along the DMZ, said Johnson. By this time, the
basketball game was over, and all the players were standing around to get the latest poop.
You flying command tomorrow, LT? Davis asked.
Yeah, I got one of those shitty fifty-eights to fly. I hate those things.
Woo boy, old beaucoup Dinky-Dow bird soldier, back in the saddle again! yelled Davis to the
laughter of the other troops as they remembered the name the ARVN had given Johnson as a result of the
nutty things he did with the 101st.
When all this shit start, sir? asked Jefferson. This was a real change. Jefferson never called any officer
sir.
Tomorrow at oh dark hundred, was Johnsons reply.
They making you fly on Good Friday, LT? This from one of the supply clerks, Hegenboom, who had
a glowering, angry appearance, his face that dominated by a protruding brow, sunken eyes, and flat, wide-
spreading nose earned him the nickname Gorilla, and he was very religious.
Dont have a lot of choice in the matter, said Johnson.
 Jefferson, you get your ass over to the flight line, and you make sure that the LTs bird is per-fuck-
tet, Davis ordered. Johnson smiled.
Jefferson outranked Davis and was bigger, but he took Daviss command. He smiled, looked at Johnson
and Davis, and said, Aint gonna be no fuckups due to mee-can-ic-al problems, and trotted away.
Johnson walked around for a while, letting his anger cool a bit, and had the talk most people have with
themselves after an argument: I should have said this or that, or this wouldve been better. It was a senseless
waste of time, since the moment had passed, and an opportunity wouldnt reoccur in exactly the right
context to make the afterthoughts or witty comments useful.
He also fell into reverie about the fact that he had lost his temper and shouldnt have. He knew that the
best way to deal with DD was to ignore him. Rising to anger gave DD a sense of power, and power in the
hands of an ass like Jerry Doncasheff was like an amphetamine.
He had chow and went back to the hootch he shared with the Huey crews. He read over the checklists
and emergency procedures for the OH-58. Then he spent an hour memorizing various landmarks and
reference points on the maps of the area in and around the DMZ. Hed never mastered the art of flying and
reading a map at the same time, so he compensated by memorizing the terrain and the grid-coordinate
pattern so he knew pretty closely where he was just by looking outside.
He took a shower to cool down before sleeping. It would be a long day tomorrow. At 0430, the duty
NCO woke him up and stood there to make sure he didnt fall back into bed. Satisfied that Johnson was
awake, the NCO, in one of those petty acts of terrorism such types can be infamous for, woke up the Huey
crews even though they werent scheduled to fly. He left to the accompaniment of a lot of cursing both at
him and at Johnson.
Johnson pulled on a clean set of underwearhis last, he noticedand stepped into his fire-retardant
flight suit. He laced up his boots and pulled his helmet bag from under the cot, checked that his gloves,
survival kit, and sunglasses were there, and then he unhooked his pistol belt from the end of the cot. He
pulled the weapon out, checking that it was loaded and that he had the required two extra magazines. He
had two standard canteens, a compass, and emergency bandage on the belt.
The words of his instructor pilot at Fort Wolters came back to him: There is no substitute for making
sure all your gear is with you and functional before flying. There is no PX in the sky. Satisfied that all the
gear was there, he clumped out of the hootch, making as much noise as possible to annoy the asshole Huey
crews. He stood on the steps in front, listening to a chorus of Fuck you, asshole! and breathed deeply of
the morning air. Pissing off the Huey guys made him proud.
After an intel briefing, meeting his Vietnamese observer, and a visual check of the helicopter, he got
into his seat. He helped the ARVN officer get in and gave him a run through of the procedures. The first
hints of true morning were along the edge of the sky over the South China Sea. The tower radioed him to
start engines, and once he reported in that he was running and ready, he was cleared to the runway. They
took off. Johnson climbed to five hundred feet and executed a right turn to clear the runway. They did
almost a 360 of the field while climbing to a thousand feet and picked up a heading to intercept the DMZ
about a third of the way along its length.
They buzzed around for about two hours, checking on the sightings from the intel reports and
responding to requests from the ARVN firebases. There were broken clouds between nine hundred and
fifteen hundred feet, and he was having some amusement flying in and out of them. They were flying back
to the east when he ran out of cloud, and through the intercom, he heard the ARVN officer say something
that sounded like Shit. He looked to his left, and he said Shit, also. There, stretching away into North
Vietnam, was a column of armored vehicles and trucks, all moving south. The leading elements had already
crossed the DMZ and were therefore invading South Vietnam. Both Johnson and the ARVN lieutenant
were stunned for a moment, and then the training kicked in.
Johnson told the ARVN officer that he should get every battery he could to fire a road runner. This was
a firing technique used to attack linear targets like this one that caused all the rounds to land one in front of
the other out to the maximum range of the guns. At the same time, Johnson hit the preset frequency button
on the radio and called in the sighting to his headquarters.
 Most army communications were done via FM radio, but his helicopter was equipped with an AM radio
set that allowed them to talk to the air-force and navy jets. He asked for a forward air controller to be sent
out. This column was a perfect target for the Navy and Air Force Phantoms, but they were on carriers or in
Da Nang and it would take time for them to get on-station. This seemed like perfect procedure so far and
the attack was underway, but hed forgotten something.
Armored units following Russian protocols marched with self-propelled antiaircraft guns on their
flanks. These were the notorious ZSU-23 cannons, essentially tank hulls with modified turrets containing
four 23 mm cannons. They could fire four thousand rounds per minute. To make this arrangement more
dangerous, it was fitted with radar that gave the gunner the range to the target. The Zoos, as they were
called, stopped and opened fire. The Loach wasnt equipped with radar detectors, so the first warning
Johnson had of the incoming fire was streams of tracers racing toward him. For some reason, his mind
forwarded the unwelcome intelligence that there were five bullets between each tracer.
The first blast of fire was high and left, so Johnson figured the gunner would adjust low and right. So
he went higher and left. He was right: the next blast was harmless. The AO told him that the time for the
artillery rounds to reach the target was forty seconds after they were fired. The normal time to process the
data for the first rounds could be as short as three minutes and as long as seven, during which he had to
dodge the ZSUs.
He turned the helicopter tail-on to the guns to present a small target and flew away; then he turned
around to face them. He was at the extreme end of the ZSUs range, but hed have to go closer to adjust the
rounds.
The first artillery battery radioed the message, Shot, meaning theyd fired the first rounds. He started
to count, and at about Twenty-five, he began to move the helicopter forward. The battery radioed a splash,
meaning that the rounds were five seconds from impact. He rolled on power, and the helicopter shot
forward.
The ZSU picked up the movement and opened up again, with the rounds passing above him. Then a
second blast of fire passed underneath, Johnson groaned, realizing that a second ZSU had opened up. He
was in what he called the jaws of death; all the gunners had to do was close the jaws.
Johnson had two choices: left or right. He hit the intercom and told the observer to hang on and stomped
full right pedal, hauling the cyclical in the same direction. There was a groan as the airframes inertia was
changed. One of the ZSUs guessed the turn correctly, and tracers began to zip past, level with the helicopter
and only yards in front. Johnson hauled the ship into a hover, but it was too late. One of the shells hit the
upturned end of the landing skid, blowing away about two feet of the aluminum.
In the OH-58, there are two windows in front of the pedals to aid the pilot in landing. The blast blew
the windows of this one out, and Johnson could feel the plastic hitting him in the legs. He felt a couple of
tugs on his pants legs, but he was too busy to really notice.
He was in trouble. The controls were sluggish, but all the dials were normal. He had no way of knowing,
though, if other rounds had impacted other parts of the bird. Johnson keyed the radio. Fortune Three,
Fortune Niner-Four, over, he called.
Fortune Niner-Four, Three. Over.
Niner-Four taking fire, we are ending contact.
Niner-Four, Three. Are you declaring an emergency?
Three, Niner-Four. Not at this time but have been hit, and we have to break contact.
Niner-Four, this is Three. Understand. Continue to advise condition.
Roger.
He turned away from the ZSU and the target of a lifetime and flew south to put distance between him
and the enemy. A few minutes later, he got his first indication of further trouble. The exhaust-gas
temperature gauge, the infallible measure of the health of the turbine engine, flickered from its normal five
hundred degrees Centigrade. Shit, he thought. They hit us back there too.
He hit the intercom and told the observer they had potential engine problems and that he needed to be
constantly aware of their location. If Johnson had to do an emergency landing, the last thing the observer
would do is broadcast their location for the rescue teams. He got an affirmative, but he mentally plotted his
own position, prepared to call it in himself. Then he settled down to flying the helicopter back to base.
A few minutes later, he was in sight of the coast, and he called Dong Ha to declare an emergency. He
was cleared to land immediately. The EGT was really bouncing around now, and he had no time for the
time-consuming, normal landing procedures. He flew directly over the village, QL1 (the major coastal
road), and the base until he was over the landing pads. He was losing altitude all the time. By the time he
cleared the air ops hut, he was only twenty feet in the air. He got the bird in a hover and started to let it
down in steps, but he had to add power constantly to maintain any control. Finally, about six feet up, it
stopped flying, slamming into the concrete and bending the skids outward.
Johnson did the emergency shutdown, cutting off the fuel to prevent fires. The ARVN LT undid his
seat belt and bolted from the helicopter before the blades stopped. The only indication Johnson had of his
leaving was when the cyclic banged into his leg as the ARVN kicked it on the way out.
He unhooked himself, took off his helmet, and got out. His legs felt weak, and his head swam. Sgt.
Depasos, the crew chief, was standing there. He looked at Johnson. Sir, are you aware youre wounded?
Johnson looked down. His olive-green flight suit was black from his waist to his knees, and he fainted.
 Chapter 3
Penectomy
He came out of the daydream with the start that accompanies a person who has fallen asleep at an
inappropriate time. At his feet were the four marching fools. On his right were two men, one profile to him
and the other full face. The full-face guy was a captain. On the left were two women in green fatigues. All
of them had clipboards. The man closet to his right foot was obviously senior and was talking. We will
have to do a penectomy. Reroute the urethra to a bag until we can evacuate, he said, making notes on the
clipboard.
The two nurses their own notes and one of the nurses after consulting another sheet of paper said, We
can schedule it for tomorrow. We have an opening at ten hundred, and Dr. Simons will be here.
The closest man responded with authority, No, it will be done today. No need to wait for an urologist.
Its a simple amputation of the penis. If we wait, there could be infection.
The male captain said, Sir, were about to change this mans life forever. Isnt there another way?
There was silence, and then the older mans voice came out dripping with condescension and anger.
No, Captain, theres no other way. You will perform the surgery indicated. Im the chief here, and that is
an order. Do you understand me?
The thought of what they were saying was so terrible, it took a second or so to register in Johnsons
brain. Then it hit him. Theyre going to cut my dick off!
At that point, the other three officers stood still, and the womens eyes widened as the Captain reached
out and touched the chiefs forearm, pointing at Johnson. The chief turned. Johnson had pulled his pistol
out and was pointing it directly at the head of the chief. He thumbed back the hammer and said, The first
one of you bastards moves to cut off my dick dies.
The first to speak was one of the women. LT, I know youre upset, but its the only way we
She was cut off by the chief. Nurse, Im not going to be blackmailed by this crap! MPs! he called.
Johnsons arm didnt waver. Doctor, the MPs arent going to save you. If youre going to cut off my
dick, then I might as well be dead. So Ill just shoot you, he said with a mean edge of conviction in his
voice.
Two Vietnamese MPs arrived at the door of the ward and stood looking at the scene
uncomprehendingly. Tell the white mice to take off, said Johnson, using the nickname for the Vietnamese
military police.
LT, I suppose that youre aware that this will end your career in the military, the chief pointed out.
You cant go around threatening senior officers because youre upset. There are lots of men here hurt
worse that you. Be a man and accept that we know better.
With all due respect, Colonel, Johnson said, using the universal phrase indicating that he intended
disrespect, I dont give a fuck about the other men. I care about my dick, and youre not cutting it off, you
pompous bastard. As far as my military career, that went out the window a while ago, so I have nothing to
lose. But you, sir, how will it read that you were shot by one of your own patients?
At this point, the captain spoke up forcefully, OK, LT. Lets see if we can work something out. The
colonel sputtered in rage, but the captain continued, We dont have to do a penectomy, but the Colonel is
worried that youll get infected, and that could cost your life. The risk is quite high due to the urine and the
presence of cloth in the wound.
So what are the options? Johnson asked, eyes scanning quickly to see if anyone was about to try to
disarm him.
We can pack off the wound with sterile dressings and ice, give you a buttload of antibiotics, and get
you on a plane for Japan in about three hours, the captain replied.
What good will that do? the colonel asked in a voice shaking with anger. The captain was unruffled,
and Johnson had to admire him. If this shitbag colonel had his way, the captain would be treating the
wounded in Antarctica for the rest of his time.
 It will save your life, sir, and allow us to have the benefit of your leadership, deadpanned the captain.
Johnson wanted to laugh, but he knew that would take the edge off the illegal act he was performing.
OK, get him on the plane tonight! the colonel said, scribbling his name across the forms on his
clipboard that he then threw at the captain, and stormed out.
Johnson relaxed, but only a little. The captain winked at him and left, followed by one of the nurses.
The other nurse walked over to a desk and came back with a wristband that she was going to attach to his
arm. Is that the band that tells the loony bin to pick me up?
No, she replied, smiling for the first time. This ones yellow. The psych wards are purple.
 Chapter 4
Descent to Hell
The trip started in Da Nang in agony and ended in Texas, in resignationwith intermediate stops at
frustration, delusion, anger, denial, and terror.
A year had passed since his wound. Hed first gone to Tokyo, where they did a bunch of operations to
stabilize the wound and attached a bag so hed no longer urinate on himself. From there he was assigned
stateside, but on the flight, his temperature spiked from an infection, so they diverted to Honolulu and he
was admitted to Trippler Hospital.
On the flight to Lackland Air Force Base in Texas, his malaria kicked in, and he found himself at
Letterman Army Hospital at the Presidio of San Francisco. When the malaria parasite had been purged and
his blood no longer boiled in his veins, he was moved to Brooke Army Medical Hospital in San Antonio.
In the months after his arrival, the doctors performed seventeen operations of various types, including
a couple of reconstructive surgeries. Johnson was ambulatory most of the time but in terrible pain, and his
urine bag cut down on his social opportunities.
Many times, late at night, when the hospital returned to the somnolence of air conditioning and soft-
soled shoes, he could hear the moans and cries of the burn patients. There were two kinds.
The first was the acute scream uttered as pain was being inflicted. It was sharp, wrenching, at the top
of the persons vocal range. Hed hear this in the morning as the nurses removed bandages from the burn
patients. They usually ripped them off in one single motion. The patient let loose a scream that chilled the
soul and actually made him glad that the only thing wrong with him was that he might still lose his dick.
The second was what he came to call the chronic pain cry. It was more of a moan, long and low, mono
pitched. Its continuous nature got to a person in strange and weird ways. For him, this was a personal
experience. The constant pain wore one down and overcame the mental ability to resist; moans escaped
involuntarily and often led to outbursts of anger. It reminded him of stories about medieval torture chambers
with tormented wretches hanging in chains and lashed by inhuman beasts. He never learned to harden his
heart to those in pain. Years later, if he saw someone in great pain, he experienced a reflective form of pain,
the remembrance of the others agony.
One day, thirteen months after his arrival in Texas and fifteen after the wound, he was visited by a
couple of officers from nearby Fort Hood. At this point, his bag was gone, and he was fully ambulatory.
While the pain was a constant companion, he was able to wear a uniform. The officers were from the post
headquarters staff, and they were looking for officers to serve in the Judge Advocate Generals office to
represent the army in courts-martial. Johnson had been a courts-and-boards officer at Fort Ord and had had
personal experience with courts-martial; he had attracted the officers attention.
After thirteen months of being stir-crazy, he jumped at the chance. Hed work at Fort Hood three days
a week and be back in San Antonio for Thursday and Friday unless he was recovering from surgery. So,
off he went on a new adventure.
A national army will reflect the qualities of the nation that it serves. The army of the late Vietnam
period had been heavily populated with draftees, who were quite congruent with societys current issues.
The press, intellectuals, and Hollywood elites had passed judgment, declaring that the United States had
lost the war. Therefore, those forced by the draft to serve in what was judged an illegal war were somehow
given a pass for bad behavior.
In the aftermath of Vietnam, this mass of draftees was serving out the remainder of its time. These
veterans lived in the bubble of the war where the accomplishment of the mission was more important than
having a good shine on your boots. As draftees, they were best led by a combination of fear and consensus.
When they returned to the States, they found they were going back under the old military discipline theyd
experienced in basic and advanced training. Society was changing. One of its changes was the new
unwillingness to accept what became considered illogical or difficult discipline.
The new attitude toward discipline and service, away from service above self to service of self, plus the
dominance of the commissioned and noncommissioned officer corps by people who held to the old ideals
of behavior, collided with rising general narcissism, militancy of the black troops, and the feeling that
service in Vietnam had been wasted. The combination created a powder keg of tension and disharmony.
After someone had been shot at every day, a court-martial wasnt so scary. Since a dishonorable
discharge was no longer a scarlet letter of shame, many figured that if you got enough courts-martial and
nonjudicial punishments, the man would discharge you. They were right. So, the court calendar became
a round robin of offenders.
It was an interesting experience. He worked three days a week with a bunch of officers, all lawyers,
whose quality of military bearing left a lot to be desired. He had some interesting cases to try and assist on
and developed a deep antipathy to the criminals in the dock.
The other four days, he was back in San Antonio. Most of the surgery was done, so the only ongoing
medical procedure was physical therapy. After the first couple of sessions, Johnson was sure that he knew
where all the Nazi death-camp guards had gone. While the pain of his surgeries was bad, it paled in
comparison to the extent and duration of that of the PT. The bastards were so sick that they arranged for
him to have PT at the Fort Hood hospital during his time there.
After six months of back and forth, he received notice that he was going to be discharged from the
hospital. In his predischarge conferences and examinations, he noticed men who had no business being
returned to duty. Some couldnt fully use their limbs or bore the horrific scars of burns. One sergeant came
to the meeting with a colostomy bag and an IV stand!
There was a larger reason for the unseemly discharge rush. One of the lawyers at Fort Hood asked him
what the term riff meant. Not wanting to be a smartass and respond that it was a musical term, he said
that it probably meant RIF, or reduction in force.
He called his friend Tom East, who was in the First Cavalry at Fort Hood. Tom confirmed that the
Department of the Army (DOA) was cutting thirteen thousand officers who werent regular army. The RIF
was to take place in the next six months. The rumors about this RIF and future ones bounded around the
crew compartments of tanks and the dirty-shirt bars of the officers club. Johnson suspected that he was on
the list. His drinking, frequent battles with superiors, his acid tongue, and his temper worked against him.
The RIF, and the fact that he might be unceremoniously dismissed from the service, challenged his romantic
notions of the world.
He was in the ultimate male-dominated, macho environment where sensitivity was weakness while
toughness and invincibility, however false, were assets. Hed deny it, but he was very sensitive. A long
history of feeling neglected and unworthy had left him with a real sensitivity to how others perceived him.
He was hurt by some of the put-downs common in conversation, taking them personally. He, of course,
could not see this in himself. Even if he had, he couldnt have sought help, as it wouldve branded him
weak. With the barbarism of youth, he denied his own soul. Denial of soul leads to internal conflict, and
the conflict to misalignment of feelings and actions. Misalignment led to tension and stress and then
outspoken explosions at those in superior positions.
In his callow youth, he presumed to lecture his betters who, with rare exceptions, took this poorly. The
army is like a big family. If someone forms a bad impression of you, it will haunt you forever. The chances
are that youll serve with that person at some other time and place. It always happened. Later, Johnson
would state it in what would become one of his many maxims: If you piss someone off early in your life,
the next time you meet them, theyll be in a position superior to yours and in control of something you want
or need, and theyll remember what happened long ago.
 Chapter 5
A New Beginning
One day, while he was back at the hospital, he received three sets of orders. One discharged him from the
hospital, the second ended his attachment to the Judge Advocate Generals office, and the third assigned
him to Fort Hood, specifically to Headquarters and Headquarters Battery, First Battalion, Fourteenth Field
Artillery, Second Armored Division.
He looked forward to getting out of the hospital and into a real unit. He was motivated by his desire to
rid himself of the horrors of the hospital, the constant pain, the endless surgeries, and the agony of ending
the addiction to opiates hed developed. The army in war was a bubble of unreality, and the hospital was
also disconnected from what he believed was the real army, but that army was in the midst of a period of
controversy.
In the wake of the ending of the Vietnam War, the army went through a paroxysm of cleansing the stink
of what was believed to have been the first war the country ever lost. It paralleled the trauma of the nation.
It was if the army was embarrassed by the presence of those who had borne the costs of Vietnam. The first
RIF had passed him by probably because of his medical condition. It was barely finished when rumors
began to fly about a second, larger culling. There was even a rumor that the legendary Second Armored,
hero of the Battle of the Bulge, was to be eliminated from the army list.
On his first day at the new job, he was getting settled into the office he was to share with the battery
commander when the First Sergeant walked in holding a five-by-eight sheet of paper. Sir, do you have a
moment?
Sure, Top, whats going on?
Sir, one of our troopers, Private Hegepath, went on sick call this morning and came back with this.
The First Sergeant held out the paper slip.
Johnson took the paper and studied it for a moment. Hed become used to the armys medical forms
and recognized it as a treatment form called a buck slip. It was used after a visit to a doctor to assign a
soldier limited duty and/or some treatment. In this case, the buck slip was stamped with two weeks of no
duty followed by five weeks of light duty and a scrawled doctors name. Johnson frowned. Top, I may
be wrong, but I think you can only use this for three weeks of light duty. I think someone should call the
hospital and see if this Dr. Langonstern is there and ask him about this.
Yes, sir, replied Top, taking the buck slip back.
Top, do we have any files on this guy Hegepath? Johnson asked.
No, sir, Captain Dancy, the battalion S-1, has all of those.
Johnson was continuing to get his desk in order when one of the clerks came in. Sir, we called the
hospital, and they only have one Dr. Langonstern, a pediatrician.
Without looking up, Johnson asked, Was he on duty whenwhenwhat was his nameoh,
Hegepathwas there? Johnson realized the clerk couldnt answer the question. Never mind,
Specialist He paused and looked at the mans name tag. Ashburn. Ill take it from here. Ashburn
turned and left.
Johnson made two assumptions: one, Hegepath was black and second Ashburn had to live in the
barracks. Having the black soldiers mad at you would make that hell.
Johnson called the hospital and asked about Dr. Langonstern. The hospital confirmed that Langonstern
was a pediatrician and that pediatricians didnt do general sick call. They also said that many sick-call
patients were triaged by technicians and nurses. He knew that no technician or nurse could order a seven-
week period of no duty and light duty.
While hed been on the phone, he hadnt noticed a captain who had entered the office. Johnson looked
up, and the captain said, Im Dennis Bedard, the battery commander. Johnson stood up at attention and
was about to say his name when Bedard continued, And youd be the famous Lieutenant Phillip Johnson,
my new XO. A hint of a smile was lurking up in the bushy mustache.
I dont know about famous, sir, but I am Lieutenant Johnson.
 Bedard ignored the remark and asked, What are you working on that has you calling the hospital?
Sir, the first sergeant noticed an inconsistency in a soldiers treatment orders, and I was checking some
facts with the hospital.
Bedard bellowed, Top! Can you come in here? The first sergeant appeared, holding his glasses by
one of the temple pieces and looking a little submissive. So, whats going on that we cant even give the
new LT a days peace?
The top had started to suck on the earpiece of his glasses; he took it out of his mouth. Sir, Private
Hegepath
AhHegepath, Bedard said knowingly.
Yes, sir. He came back from sick call this morning with a buck slip ordering no duty and then light
duty. I didnt think you could use the buck slip like that, and knowing the LT has been in the hospital, I
asked him. He paused and looked at the captain, who waved him to continue. So Lieutenant Johnson
asked us to call the hospital and see if the doctor who signed the buck slip really signed it.
Johnson jumped in. Sir, they found the doctor, but hes a baby swatter, a pediatrician. I thought that
was suspicious, so I called the chief of medical staff and confirmed he was a pediatrician, didnt do sick
call, wasnt on duty today, and that a buck slip cant be used for this type of profile.
Bedard smiled. We got him.
The first sergeant brightened up and said, It would appear so, sir.
Johnson, Bedard said, youve been here less than a day, and youve helped convict one of the biggest
jerks in the battery. Weve been working on getting rid of him for weeks, and you do it in one day! Good
work. Where is Hegepath?
The rest of Private Alvin NMI (no middle initial) Hegepaths army career was short. A special court-
martial convicted him of forgery, and he was gone. Johnson couldnt believe it. He never even saw the
man!
In central Texas, the summer days were endless, and time wended and wandered like the heat waves
off the Texas roads. Johnson finally got a message to report to battalion headquarters. He reported to the S-
1 who, in his most cold and heartless manner, told him that he had been selected for RIF. Like the good
soldier he imagined himself to be, he took the news stoicallyat least outwardly.
His first reaction was to feel like hed been hit in the stomach. As he left the battalion HQ, he knew
that everyone knew hed been RIFd, and he imagined every look or glance as one of disapproval. His next
feeling was shame. They no longer want me, and Ive failed myself, my father, and my country. He became
hypervigilant not to threats but to slights. Every laugh by another, regardless of how innocent, he just knew
was directed at him and his shame. He couldnt bear being laughed at.
For a while, his self-narrative was that he was happy since he wouldnt have to put up with the bullshit
of the post-Vietnam army. He even constructed a moral case that his leaving would allow another officer
not as fortunate as he was to stay in the service. It was all bullshit. And then came the anger. How could
they throw him away? Hed given his all for the fucking armybeen wounded, went through hell, and now
they were throwing him out like the trash.
The anger lasted a few days, followed by deep and lasting depression that left him in real pain and with
a permanent case of diarrhea. He started drinking heavily, taking long lunches at the officers club bar,
telling lies and stories that were third hand before hed heard them.
His feelings about others perceptions of him were of course wrong, as were all of his perceptions made
in the midst of great personal stress. There were those who cared for him, but his flinty armor of anger kept
them from intervening to assuage his depression with the balm of human kindness. His friend Tom East
arranged a drunk intervention, which was none to gentle. It involved cold showers, no food, and huge
amounts of screaming and demeaning remarks. It worked.
The out processing involved taking a physical to prove that there was no medical reason he couldnt be
discharged. He really didnt understand why he needed one. All they had to do was review the records of
his last fifteen months of hospitalization. However, his chest x-ray revealed pneumonia, which explained
the crushing pain hed been having in his right arm, and he had to be readmitted. The next day, he was
walking down the hall doing the IV amble, a step involving not bringing one of your feet (in his case, the
left) all the way forward, as it wouldve collided with the IV stand. The effect was that you shuffle like an
old man.
One of the orderlies told him there was a guy waiting for him. Johnson knew right away that the
guy was a civilian, since even the hospital orderlies called officers by their rank.
He was dressed in a black suit, white shirt, black tie, black shoes, and short hair that screamed
Mormonor FBI. His name was David Carmichael, and he was actually a former navy officer working for
a legendary Texas billionaire named R. Moody Mortensen, also ex-navy. David explained that Moody, as
everyone called him, was looking to hire ex-officers to work for his new stock-brokerage operation, DuPuy
and Winston.
Johnson had no other post army plans, so he agreed to a second interview. Carmichael took down
Johnsons phone number with a promise to get in touch. With his pneumonia cured and predischarge
physical passed, Johnson was released the next morning. For the first but not the last time, he wondered if
Moody Mortensen had surveillance on everyone he was about to hire: hed just walked into his apartment
and opened a beer when the phone rang. It was David Carmichaels boss, Devlin Vance. Vance told Johnson
that they would interview him at 10:00 a.m. the following Monday. Johnson involuntarily asked, Yes, sir,
and what is the uniform?
There was a silence on the other end and then a laugh. Vance replied, Civilian suit and tie. Youre no
longer in the army, Johnson.
Yes, sir, ten hundred hours Monday, sir, and where will you be?
Were at the field house. You know where it is?
Yes, sir, Ill see you there.
He hung up and realized he had three days to find civilian clothes. He called Capt. Bedard, and Bedards
wife, Liz, told him there was a mens store in downtown Killeen, east of Fort Hood.
When he walked into the store, the salesman took one look. Forty regular, thirty-two waist, thirty-two-
length sleeve, he said. He took a suit coat off the rack and Johnson slipped it on. It was almost perfect. An
hour later, he walked out with two white shirts, two ties, a pair of lace-up black shoes, and a gray, pinstriped
suit. It was only the second suit hed ever owned.
On Monday, he appeared at the post field house five minutes early. He found his way to the section
reserved for DuPuy and Winston and was greeted by David Carmichael and Devlin Vance. Vance was
about six-foot-two, four inches taller than Johnson. His face was a hatchet. He had a narrow jaw, with
cheeks sunken in the way common to athletes who train hard and long. His dark hair was combed straight
back, and his eyes were dark and expressionless. His upper body tapered to his waist like a yield sign.
Wrapped in his three-piece gray suit, white shirt, and rep tie, he was intimidating, which was the effect he
sought. There was a faint air of disapproval about him.
It had been drilled into Johnsons head that on first meeting, it was the right of the more senior or older
man to initiate a handshake, so Johnson waited for Vance to act. Dont want to shake hands, Johnson? If
youre going to be unfriendly, we can save a lot of time right now and end the interview.
I do, Johnson said, but I was taught to wait until the superior officer or older person extends their
hand first.
Vance was taken aback by the interviewee correcting the interviewer. After a second of thought, he
extended his hand and offered a greeting. Then Vance hit back like a rattler. I see you have no respect for
me.
Thats not true, Johnson replied. Why do you say that?
Your hair is a mess. If you had any respect for me or really wanted the job, you wouldve at least
combed your hair before you came in here. Thats the sort of thing that puts customers off.
One of Johnsons least attractive features was his hair. Thinly placed and baby fine in the constant
Central Texas wind, his hair was always being blown around. In the army, it hadnt been a real problem,
since he wore a hat all the time. Johnson hadnt even run his fingers through his hair today. Score one for
Vance. Johnson said nothing but formed a half smile that was his typical response to being bettered.
Is that funny? Vance shot.
 No. I was just thinking how well you got back at me for failing to extend my hand, Johnson replied,
the smile hardening and his eyes taking on a look of anger and danger that had intimidated harder men than
Vance.
This is getting off to a bad start, said Vance.
Why dont we start over? offered Johnson.
Vance paused and extended his hand and said, Good to meet you, Johnson. Carmichael has told me a
lot about you.
Thank you, was Johnsons reply.
At the end of the interview, Vance told him that Mr. Mortensen personally interviewed all the
candidates for employment. Johnson was the least sensitive of all persons to social cues, but he picked up
on something about Vances reference to Mr. Mortensen. The fact that Vance hadnt used Mortensens first
name told him that Vance wasnt accepted or more likely was on the outs.
Vance consulted with one of the other representatives, and then they agreed that Johnson would
interview Mortensen a week later at his office in Dallas.
On the way out of the field house, he was waylaid by some recruiter for an insurance company and out
of courtesy spent an hour listening to a sales pitch about the wonders of insurance sales. Mind-numbed by
the experience, he headed by the most direct route for the door.
A familiar voice yelled, Hey, Dinky Dow! He was face-to-face with Evan Bronson, who had been a
Huey pilot in the 101st. On his fourth shoot down, Bronson had rescued him and his observer, Joe Hamel.
I heard you took a hit and went stateside. You getting out?
If I wasnt, why would I be walking around in this class-A civilian monkey suit?
Two other men had walked up. Phil, let me introduce you to Pat Haynes and Sy Murray, Catkillers
both. Catkillers was the nickname for the First Aviation Brigade.
Pat, Sy, this miserable specimen is the legendary Phil Johnson. We met when he was flying AO
missions with Third FSE in the Belching Buzzard. Bronson had managed to make the conversation totally
inexplicable to anyone who hadnt been in aviation in Vietnam. FSE was an abbreviation for the special
unit that Johnson had been assigned to; the letters stood for fire support element. Belching Buzzard was
one of the nicknames for the 101st Airborne.
The mention of the duty brought Johnson a deep sense of sadness, but he sucked it up and greeted the
men. The three were hiring reps for Petroleum Helicopters, which provided contract helicopter services to
off-shore drilling platforms. They seemed interested in hiring Johnson, so he listened to the pitch. He turned
down the lunch invitation, which would be long and liquid, with the lie that he had out processing stuff to
do. The reality was that Johnson wasnt interested in flying anymore.
Back at his apartment, he began to pack by purging all but one of his uniforms. He kept one of his khaki
uniforms called a TW, or tropical weight, for his departure and took the rest of the uniforms out to the
car to take to the thrift store the next day.
The next week dragged by. He had no official function, nothing to do. The army was purging him from
its collective memory, and his presence was a welcome as a fart in church. For a couple of days, he went to
the field as an artillery safety officer. All in all, it was just filling time and pretty boring.
Hed decided that hed drive to Dallas on Friday and spend the weekend there, see Mortensen on
Monday, and then drive back. He found a Holiday Inn near Love Field and called D. D. Lewis, his former
squad leader in advanced individual training. Lewis was a linebacker for the Dallas Cowboys. But it was
off season, and Lewis was back at home in Mississippi. So he spent his time wandering around town and
watching TV.
On Monday morning, he got up at his usual 5:00 a.m. and went down to breakfast. His appointment
was at ten oclock, so at eight, he checked out and drove to the CDS building on the Stemons Freeway just
to do reconnaissance so he knew where it was. He was early, so he drove around looking for a parking lot
and discovered one under the building.
At 9:45 a.m., he parked in the underground lot, grateful for the shadows from the already too-hot day.
He took the elevator to the lobby and another to Mortensens office on the fifteenth floor.
 The doors opened to a wall with another set of elevators. There was no sign indicating the floor number
or who occupied it. Johnson looked down through the gap, and between the doors he could see the number
fifteen painted on the walls. He stepped off and looked left and rightnothing, just long halls.
The corridors were undecorated, with doors alternating on both sides and quiet. He heard the noise of
a typewriter in one of the offices, so he knocked on the door. The gruff voice said, Yes, and he opened
the door. He asked the man inside where Mortensens office was and was told last door on the right.
He walked down the hall, struck by how his footsteps were silenced by the carpets and walls. He
realized that there were no names on the various doors, even the one in front of him that belonged to the
head of the company. He knocked, and a female voice told him to come in.
Mortensens outer office was no more decorated than the rest of the hallway. It did have large floor-to-
ceiling windows with a nice view of Dallas. The secretary was a small woman dressed very conservatively,
reminding Johnson of his grade-school teachers. Her name was Edith Tomand.
He introduced himself, and without consulting her day planner, she picked up the phone and announced
him to Mortensen with the statement, Moody, Lieutenant Johnson is here. Then she asked him to sit
down.
His butt had barely hit the couch when the door to the inner office opened quickly and the great man
appeared. After all hed heard, Mortensen was a disappointment. Johnson had figured that great men were
always tall, handsome, fit, perfectly dressed, and had deep, resonant voices.
Mortensen was about five inches shorter than Johnson. He was dressed in a black suit, white shirt, black
tie, and black shoes. His semiblond hair was very short, which highlighted a pair of ears that stood out from
his head like airbrakes on the side of a jet fighter. He was, all in all, a guy youd pass on the street and not
even notice. His voice was confirmation of Johnsons perception mismatch. It was a high-pitched, nasal
tenor with a noticeable East Texas twang. Not unpleasant, but it wasnt the expensive voice Johnson had
expected from a billionaire.
He extended his hand with the statement, Hi, Im Moody Mortensen. It came out as, Haa, Im Moody
Motenseen. Johnson took the proffered hand and introduced himself.
They moved into Mortensens inner office, and Moody waved Johnson to the couch along one wall.
Mortensen had continued to his desk, where he flipped through the pages of a file folder.
Mr. Mortensen, Johnson began, its a real honor to meet you, and
He was cut off in midsentence by a wave of Mortensens hand. Without looking up Mortensen said,
Everyone calls me Moody. Ah been readin over your file here, and I got to say, Im impressed. Your
father, Colonel Johnson, must be proud of you. Says here you got two Bronze Stars with the V, Purple
Heart, Air Medal, five army commendations, and a DFCthe Distinguished Flying Cross.
Johnson wondered if this was a test. Then he said, Mr. MortI mean, Moodyit stuck in his throat
a bityou have it all correct, except that I dont have the DFC.
Mortensen, who meanwhile had moved to a chair at the end of the couch, got up with spring and walked
to his desk. He consulted the file. Says here you got the DFC for actions on October 4, 1971.
We will have to disagree, sir, I dont have the DFC. In a burst of ego, he said, I wouldnt claim a
decoration that I havent been awarded. He was rewarded for his moralizing with a rush of blood to his
cheeks.
They talked for another twenty minutes, with Mortensen explaining what he was after and why he was
looking for ex-military officers. At the end of the interviewand Mortensen made it clear it was the end
he extended his hand and walked Johnson out to Ediths desk, where he said, Edith, fix Phil here up with
the standard package. Whos doing the paperwork today?
Ron Fox, Mr. Mortensen, Edith replied.
Johnson started at the name. Is that the Ron Fox that flew Chinooks in Vietnam?
I think thats what he did, replied Moody. You know him?
If its the same guy, he rescued my observer and I, Johnson replied.
Edith directed him down three floors to a particular office, and Johnson noticed there was no office
number. Just three floors down, turn right off the elevator, and third door on the left. He walked out with
a thick manila envelope under his arm just as another bright-eyed young man walked in.
 It was the same Ron Fox: thin, black as the ace of spades, high-strung, with quick eyes. They told lies
to each other and remembered old friends. Fox rattled off that the DuPuy and Winston training center was
in Los Angeles in mid-Wilshire near the Ambassador Hotel, like Johnson would be from outer space if he
didnt instantly understand the location. Johnson had never been to LA, so he had no idea where the
Ambassador Hotel was. Johnson was expected to check in with the housing manager (the company had
leased apartments at six buildings in the area) by August 15, and classes would start the following Monday.
They parted after Fox gave Johnson another envelope full of forms.
As he was going out the door, Johnson asked Fox what the pay was, and Fox looked worried. He looked
left and right and said, It would be sufficient to your needs, but made it clear that one thing that was never
discussed was salary. You could get fired if you talked about how much you got versus others. That seemed
strange to Johnson, but he was in no position to question it, and he left.
He got back in the car, looked at the clock, and was surprised to see that the whole affair had taken two
and half hours. He drove out, got directions from the garage attendant to get back on the freeway, and sped
south.
It took him three hours to get back to his apartment. He walked in and got out of the suit and tie. He
turned on the air conditioner and his stereo and sat down to read the material in the envelope. About ten
minutes later, the phone rang. He was on a party line, so he waited to see if it was for him. Hearing his two-
short-and-one-long ring, he picked up the phone. Lieutenant Johnson.
Johnson, where the fuck have you been? We been trying to reach you for two hours! It was Captain
Bedard.
I was in Dallas, interviewing for a job with Moody Mortensen.
I dont care if you were talking to God! Get into Class Bs and get up here. There is an A&Dawards-
and-decorationceremony at sixteen thirty, and youre getting the DFC! Colonel Watson has been going
nuts trying to find you. The ADC is going to present it! (That would be the assistant division commander.)
Johnson was floored. Moody had known about the medal before he did. Johnson didnt know hed even
been recommended. Watson was the division artillery commandera real prickand the ADC was
General Clementi who was an even harder ass. Johnson looked as his watch. It was 3:45 p.m., 15:45 in
military time. He had forty-five minutes.
Yes, sir, is the ceremony at Div Arty HQ or the Quad?
On the Quad. Its a general retreat and A and D, replied Bedard. And Johnson, try not to look like
you polished your shoes and brass with a candy bar.
 Chapter 6
The Long Good-Bye
Its not easy to get out of Texasspiritually, physically, metaphorically, or geographically. Its even more
difficult to get out from the Texas-based military bases, and Fort Hood was the worst. You had several
choices, none of them good or short. The frequent small towns and their notorious cops made it slow going,
as did cattle that seemed to wander the roads.
He stopped in Las Cruces, New Mexico, the first night, and the next day he drove like a madman and
got to Phoenix. The third day, he stopped in San Bernardino, California. The next morning, he called the
number Fox had given him, which turned out to be the housing coordinators office. They told him where
he was to go to get his apartment assignment. He bought a detailed map of the LA area and plotted out his
course. He knew LA was big, but the scale on the map showed it to be truly enormous!
He waited until he thought rush hour was over before he left and quickly discovered that rush hour
never ended in LA. People drove differently there. They didnt use turn signals; they drove ten miles an
hour over the posted limit and right on the tail of the car in front. Having gotten used to the Texas parries,
he found all this nerve-wracking.
He drove and drove and got more and more nervous that hed missed the turn off, but just as despair
was about to force him to turn around, he saw a sign for Vermont Avenue. He exited from between two
charging monster trucks up the off-ramp and then down into the city traffic. It was a mess. He used his turn
signal and was rewarded with horn honks. He turned it off, and seeing a car-length gap appear in the traffic,
he hit the left signal, but as he started to execute the turn, there was loud horn in his ear and a squeal of
rubber being braked hard. The son of a bitch who had been at least a car length back, seeing the turn signal,
had sped up and was right on his left rear quarter! The next time a gap appeared, he didnt signal; he just
turned.
The traffic was thick, and the weather was hot and hazy. He finally found Sixth Street and moved
forward into the intersection to make a left turn, again without signal. Horns again. Swearing as cars dodged
from his rear to go around him, he waited until the light turned yellow. But, just as he was turning, a car
came screaming up the opposite way and shot through the intersection as the light turned red. Finally, to
the accompaniment of horns and shouts, he completed the left turn under a full red light.
He headed west on Sixth until he found Mariposa Street, turned right, and immediately saw an
apartment building named Provence. The housing people told him that all the apartments were named after
French provinces, which was supposed to impress him. This was an older part of LA, settled before the
glitz, glitter, and money had moved people to the west and Century City, Hollywood, Bel Air. The streets
were lined with mature trees and small, neat houses with cars parked on both sides. The cars were solid,
with the only break being driveways. He finally found a place two blocks away and walked back to
Provence.
The building was a hollow square with four large entrances to the courtyard. In the center was
something like a garden and fenced-off swimming pool. He looked around and saw a large group of people
standing in a line. Hed been in the army long enough to realize that, with a bunch of military people around,
if there was a line, it was probably the right place to be. So he walked up to the end.
It wasnt very hot, not as hot as it had been in Texas, but hed been in air conditioning almost all the
time since hed left Killeen, so the sun started to heat him up quickly. His eyes were itching and watering,
and after a few minutes, he started to sneeze and his nose ran. The line moved forward slowly; no one talked
to each other.
Finally, he entered a large room where several women and men were seated behind desks. He followed
the lead of the guy in front of him and stayed near the door until one of the seats in front of one of the desks
was open. He moved to the seat and sat down in front of a large, fleshy man in his mid-fifties with a full
head of graying blond hair slicked back and perfectly arranged. He looked up at Johnson. Who told you
to sit down?
 No one. I saw the guy in front leave and figured that I was next at your desk, Johnson replied with a
lazy, half-smartass tone.
You figured wrong, was the reply. You stand there until someone calls you, and then you come
over. And you do notI repeat, do notsit down until you are told. You hear me? The voice was cold,
menacing, and one not used to being disobeyed.
Yes, sir, was Johnsons reply, but he didnt move.
Obviously, you dont listen, the man growled. Get up, go to the door, and wait until youre called.
Blushing red from embarrassment, Johnson got up and walked to the door in the full view of all the
others waiting to get in. He stood, shifting his weight from one foot to the other, and waited. It seemed like
forever before the gruff man looked up and said, Next!
The interview was short and very tense. The gruff man said nothing about the dressing down earlier,
and Johnson was proud of himself for not starting a fight by saying something.
After signing some papers and getting some other papers to add to his growing stack, he walked back
to the car and drove four blocks to Kenmore and to his new home. The building was a four-story, concrete
thing called Aquitaine. There was a driveway on one side that led to the garage under the building. He
parked and walked into the lobby and then up the elevator to the third floor. He walked around until he
found his apartment: 314.
The apartment was on the south side of the building. The door opened directly into a living area with a
kitchen on the far side and visible over a small breakfast bar. To his right was a short hall that ended in the
bathroom. Breaking off the hall to the left was the entrance to the bedroom, in which there was a pair of
twin beds.
The living room had a couch and two chairs, and there was a table in a dining area with four chairs.
The whole place was carpeted with a brown rug that was a little worse for wear. There were no kitchen
utensils or pots and pans. He did discover there was a shower curtain, at least but no sheets on the beds.
He hadnt thought about the need for the basics of life but now realized that he was going to have to go
shopping. He had never bought any of this type of stuff before. He didnt even know where to go to get it.
He went back into the hallway and noticed there was a stairway to the left. He walked down the stairs to
the garage, got his suitcase and one of his duffel bags, and took the elevator to get back up.
As he walked back to the apartment, he saw a guy in front of the door next to his. He was of medium
height and wore black-framed glasses, with thick, black hair secured by some gelatinous hair dressing. He
looked as if he hadnt shaved for a few days, and there was a cigarette hanging from the left corner of his
mouth. Hi. Wilowatty, came the words, with the smoke of a thousand cigarettes preceding and following.
Phil Johnson, said Johnson, sticking out his hand. Wilowattys grip was surprisingly firm. That was
the end of the conversation as Wilowatty went into his apartment. Johnson shook his head and turned to his
door.
Once inside, he took his bags into the bedroom. It took another trip to the garage get his other duffel
bag and some loose stuff, and during the trips he saw several more guys unloading suitcases and one group
that looked like a family.
As he was contemplating this new turn in his life, the door to the apartment opened, and a man struggled
in, preceded by one large suitcase and another trailing behind. He was in the door before Johnson could
move to help him.
They locked eyes for a second. Johnson noticed that the other fellows gaze seemed unfocused even
with the glasses. He was out of breath from his struggle with the luggage. Im Rich Gorka, he said.
Johnson replied with his name and extended his hand. A sloppy handshake was one of the things that
he disliked in people. He figured that since a handshake was a greeting, it should be firm but not crushing.
This one was weak and reminded him of the kind of shakes you got from black guys or those unfamiliar
with handshakes, like the Vietnamese.
I guess this is our home for the next six months, Johnson said. Its not much, but better than a
bunker. There was no response, so he went on, You have more stuff to bring up?
I have a couple of boxes in my car, Gorka responded. Its a real bitch coming up those stairs.
 You didnt use the elevator? A dumbstruck look came over Gorkas face as he realized he looked
like a total idiot. Lets get them, Johnson said, and they walked down the hall to the elevator. The family
Johnson had seen in the garage was entering one of the other apartments, and he could hear voices of others
moving in.
The boxes were jammed tight in Gorkas Barracuda. They were large and very heavy, and it took the
two of them to get them out. There was no way either of them was going to carry any of the boxes alone.
What have you got in these things? Johnson asked as they pushed, hauled, and sweated the second
box to the apartment.
Pots and pans, silverware, books. Stuff like that.
Oh, shit, thats another thing I dont have, thought Johnson.
They spent the afternoon getting unpacked and putting stuff away. Johnson had very little: three suits,
a sport coat, a few pairs of pants, and a couple of casual shirts. He had the usual complement of underwear
and socks. Gorka, on the other hand, had tons of stuff, so he took most of the closet and the chest of drawers.
Johnson was in the living room, sitting on the couch, when there was a knock on the door. He found
three guys standing there. One was Wilowatty. The others were introduced as Vince Martin and Jamie
Roates. Martin was Wilowattys roommate, and Jamie was in the apartment on the other side of Johnsons.
Wilowatty was smoking again, this time with an ash that was about half the length of the cigarette. Gorka
came out of the bedroom and was introduced.
You guys know where a supermarket is around here? asked Jamie.
I saw one on Vermont as I was driving in, said Johnson.
The problem was that no one had any food, and it was getting on to dinner time. Johnson realized that
hed eaten no lunch, since he was driving and checking in at the time. They all discussed if they knew
anywhere to eat in the area, and Vince said hed seen a place a few blocks away called Hamburger Hamlet,
but he couldnt remember where it was exactly.
Martin suggested that they all go out and get something to eat. Gorka said he didnt want to go, so the
others went down to the garage and got into Jamies BMW. They drove around for a while trying to find
the restaurant, getting further and further from the apartment. There were a lot of jokes about Martin, a
former Marine, not being able to find his ass with both hands. Wilowatty smoked continually. Jamie drove
like a madman in the evening traffic.
About an hour later, they found a Big Boy and had dinner. It turned out that Wilowatty had been in the
navy; Jamie had been a Huey pilot. Wilowatty stopped smoking at dinner, but that was it. On the way back,
they took a different route and passed a Lucky store, a Safeway, and a Ralphs. There was much laughter
about the latter name. Ralph was a slang term for vomiting.
They stopped at a small store that hed later learn was called a bodega in LA. All four bought six-packs
of beer, the essential liquid of maleness.
When they returned to the apartment building, there were some other people moving insingle guys
and what looked like husbands and wives. They went up to the third floor, and there was a guy moving
stuff into Jamies apartment next door. Turned out his name was Guy Carpano, and he was from Maine.
Hey, theres a roof garden up there, he said, lighting up like a candle. They all went up the stairs,
carrying their six-packs. The garden was floored with Astroturf and had some chairs and benches around a
central planter. Being up about forty feet, they had a pretty good view of the surrounding area. They sat
down to drink beer and tell lies about themselves. They all knew they were lies, so they only believed what
they knew was true. The interesting part was that theyd come from different enough backgrounds that they
could lie without a whole lot of fear of contradiction.
Johnson didnt talk a lot and went easy on the beer. After an hour, Gorka joined them with Carpano,
and then three other guys arrived. Joe Kennedy was an older guy, about fifty, with square, schoolteacher
glasses. His roommate was Steve Ansberger, and the third guy was Dave Shepardson. Beer was exchanged,
and male bonding occurred.
About midnight, they all departed for their apartments. Gorka lent Johnson a blanket to roll up in for
the night. So, after all the distance hed traveled across the entire world, he was still camping on the Texas
prairie.
 Chapter 7
School Starts
The next day was Sunday, and Johnson drove down to where he thought hed seen the department store. It
was one of those big, square, unattractive buildings that look like every other store, be it Bullocks, Sears,
or Saks. He walked in and was immediately assaulted by the collective stink of thousands of perfumes,
colognes, scented lotions, and other crap. He started to sneeze, and of course, he didnt have a handkerchief.
He found his way to the escalator, where a sign directed him to Bedding on the fourth floor. The entire
floor was rank upon rank of bed frames, mattresses, box springs, and headboards. He wandered in that
perplexed manner that men have in lingerie departments until someone takes pity and helps them.
The woman who finally seized on him was about sixty, with gray hair and a badge proclaiming her as
Joannie. She looked like her feet hurt. He told her he needed to buy sheets, blankets, and pillows.
Single, double, queen, king, California king? Down or polyester?
He stared at her without comprehension.
God, your mother never taught you anything, did she? What size is your bed?
Big enough for me, but not much larger, replied Johnson.
Follow me, said Joannie over a big sigh. Johnson followed her, and Joannie pointed out the various
sizes. Johnson finally saw one that looked right, and Joannie said, Now were getting somewhere.
She stepped over to a rack of sheets and handed Johnson a package that said it had a fitted sheet and
top sheet and two pillowcases. Then she handed him another package that said mattress cover, and finally,
a large one containing a dirt-colored blanket. With a final flourish, she grabbed two pillows and plopped
them on top of the other stuff.
The whole trip had taken about an hour and had cost him $275.98.
As he entered the flat, Gorka was washing dishes. The place was much cleaner than it had been, and
there was a paper bag at the end of the breakfast bar. Dont leave your beer cans on the counter, Gorka
announced. That bag is where they go, or well get food poisoning. He sounded like an older sister or
some of the wives hed known.
Johnson continued down the hall and into the bedroom. He had a feeling that Gorka was a clean freak,
but it didnt extend to making his bed. Johnson opened all his packages and dumped them on the floor. Just
then, Gorka came in and said, You should wash those before you sleep in them, especially since you
dumped them on the floor. You have no idea where theyve been.
The packages! Johnson shot back and started to make the bed. It took him about five minutes, and it
looked ready to pass inspection. You want me to make your bed? Johnson asked.
OK, was the terse reply. Johnson made the bed, military style. We need to talk about food and
meals, was the only response.
What about them?
Well, we have to get some food other than beer, and I wondered what you want to do about shopping
and sharing the costs.
How are the other guys doing it?
Just as Gorka was about to reply, there was knock at the door. Johnson went over to open it, and there
was a tall, thin man dressed in a suit, wearing glasses, and holding a clipboard. Johnson and Gorka, he
ejected with no salutation or greeting.
Im Johnson. This is Rich Gorka, he replied, starting to dislike the guy. His proffered handshake went
unmatched.
You both are in the early class. Starts at six thirty in the morning at the training center.
In the pause, Johnson asked, Wheres the training center?
3380 Wilshire Boulevard, was the only response.
OK was all Johnson said. The man moved down the hall to Wilowatty and Martins apartment. The
door opened, and the cloud of smoke that marked Wilowattys presence billowed out. The message here
was just as unemotional and discourteous. Johnson looked at Wilowatty, and they both turned and watched
the man knock on the next door. Dave Shepardson answered and got the twenty-second message. The man
turned left and left. Carpano was looking out his door now, as were Johnson, Wilowatty, and Shepardson.
Who was that asshole? asked Wilowatty. Everyone laughed and went back to their apartments.
Johnson and Gorka went through the process of deciding how to buy food. They finally agreed they
would split the cost of things like dishwashing soap, laundry detergent, and paper towels. They would each
purchase food to their own tastes.
Gorka was reading the papers that seemed to accompany them like flies do a garbage truck. Johnson
finally started to read his set. The early session started at 6:30 a.m. and ran to 1:30 p.m.; the second went
until 7:30 p.m... Almost everyone on the floor was in the early class, with the exception of two Canadians
on the other side of the building and Shepardson.
Since there was no food in any of the apartments, Johnson suggested to Gorka that they go out to eat.
You go. I cant afford it, Was the reply. Johnson was coming to the conclusion that Gorka was cheap. He
went down the elevator to get his car but decided to walk instead.
On the street in front of the building, he turned right. Two blocks later, he was at the corner of Wilshire
and Kenmore. Directly across Wilshire was the Ambassador Hotel. He remembered that the guy had said
the training center was on Wilshire, so he looked at the address on the nearest building and turned left. At
the end of the block on the far side of Wilshire, he saw a building with the company name DuPuy and
Winston.
The office was in the middle of the block, so he stepped between a couple of cars, waited for a clearing
in the traffic, and jogged across the street. The sign on the door said it was the National Training Center.
Confident that he knew his direction, he turned around and was confronted by a policeman.
The cop was in the full motorcycle-officer uniformblack boots to the top of his calves, black leather
jacket with a badge on the left breast. There was the obligatory gun belt, and topping it all was the white
helmet with the sun shield down. He looked almost robotic. His nameplate proclaimed him as Dunstan.
You know you jaywalked. It wasnt a question; it was a statement of fact.
Yes, Officer Dunstan, I did.
You must be new around here. Only an idiot jaywalks on Wilshire. We have about ten people a year
killed around here being idiots, the robot-like voice echoed from the confines of the helmet. Drivers
license, he demanded.
Johnson knew enough to move slowly. Hed noticed Dunstans hand move toward his gun as soon as
he made the demand. Johnson pulled his wallet out of his hip pocket and handed over his Texas license.
Dunstan studied the license for a minute without moving his helmeted head. Then the otherworldly
voice continued, I dont know how you Texas yahoos do things, but here in LA, we have laws, and we
expect them to be obeyed. I could give you a ticket for a hundred dollars for jaywalking. Maybe that would
knock some sense into your head. I get tired of scraping up jerks like you off the streets. You need to wake
up, or your stay here will be either very short, very expensive, or both.
Johnson could feel his anger rising. Dunstan was being excessive; it was a jaywalking ticket, not a
murder, for Gods sake. He was about to say something when Dunstan said, Im giving you a warning, but
next time, youll get yourself a fat ticket. Got it? This last was said to the accompaniment of a gloved
finger pushing toward Johnsons face.
Dunstan handed back the drivers license and backed away, never taking his eyes off Johnson. He
walked around the back of his motorcycle, got on, and accelerated into the light Sunday traffic.
Johnson was stunned, and the heat of a delayed fear of police and his anger rose. He turned red. He
looked further down Wilshire and didnt see anything that looked like a restaurant, so he turned up the street
and walked back toward the Ambassador. A big hotel had to have a restaurant open on Sunday.
Theyd set Gorkas alarm clock for 5:30 a.m., but Johnson was awake long before that. It was almost
as if reveille had blown. He was awake at 4:30 a.m. but lay there until 5:00 a.m., got up, and took a shower.
He was shaving as Gorka made his sleepy way to the bathroom, scratching in all the places men do in the
morning. After being around men for years, Johnson was used to anything, and the usual morning-thunder
fart was expected, but it didnt happen with Gorka.
 No one else knew where the training center was except Johnson, so they all followed him and Gorka.
They reached Wilshire and turned left down the street to the end of the block and waited for what seemed
to be an hour for the light to change. He had time to note that a restaurant that had been closed on Sunday
right across from the training center was open. There was a newsstand just around the corner and a florist
that, for some reason, was open at 6:00 a.m.
They all entered the training center in a column of twos. A sign sent them to a room on the left of the
entrance hall. It was an auditorium with a lectern in the front and rows of desks on either side of a center
aisle of steps leading to the back of the room. The desk areas each seated two, and Johnson and Gorka
climbed about halfway up to find one that wasnt taken. Johnson took the right seat, leaving the left-hand
one for Gorka. To his right was a massive guy with an open, bright, honest-looking face. He was beautifully
dressed in a dark suit, white shirt, and spotted tie. He extended his hand. Buford Haynes, College Station,
Texas, came a Texas drawl so thick it was hard to understand.
Phil Johnson. You must be an Aggie.
Ah, had the distinct and extraordinary pleasure of bein in the Corps of Cadets. This heres Bob
Holland, but he dont count. Hes from Dallas. The guy next to Buford waved.
Johnson introduced Gorka. The place was noisy with everyone coming in, finding seats, and
introducing themselves. He was surprised to see that there were two women in the front. He knew that most
of the trainees were combat veterans, but that definition excluded women, so he wondered where they had
come from.
About five minutes later, the fleshy, fifties man with the full head of blond-gray hair whom Johnson
had had problems with on Saturday walked onto the stage. He was dressed in a brown suit and held a large,
unlit cigar. He walked to the podium, stood there, and waited. He had a bored, semiarrogant look on his
face like he expected that his presence would quiet the room. Johnson busied himself with a writing tablet
and checking out his Cross pen and pencil, trying to prevent the man from noticing him. Every time the big
man scanned the room, it seemed that his eyes lingered on Johnson.
The big man tapped on the microphone. When that didnt work, he looked over at another man standing
in the wings, who walked out and shouted, Can we have your attention, please? That didnt work.
Finally, a big, almost skinheadish guy in the first row stood up and shouted in his best parade-ground
voice, Aaaaten-shun! The place got silent immediately.
The big man looked over at the guy in the front row. His face betrayed no expression. Not approval,
not disapproval, not anger or humor. Just blankness. Im Norm Padgett, the director of training for DuPuy
and Winston. Welcome to Los Angeles. This building will be your home for the next six months. Youre
not here for pleasure. Youll work hard and work long hours, and youll be under a lot of pressure. Youre
expected to maintain the highest standards of conduct, not only while youre in the training center, but also
in the apartments we have rented for you. He scanned the room slowly, left to right; then up the levels;
and then to the right and down. There was a sardonic smile on his face, and the unlit cigar was still in his
right hand.
He continued, Many of you wont make it, either for academic reasons, behavior, or the ability to
handle the workload. There is a dress code, and youll be judged on your compliance. You can be dismissed
if you are warned and continue to willfully violate the codes. Before we get started, are there any
questions?
Everyone had questions. Johnson had about a hundred, but there was only a nervous shuffling of paper
and feet, and the eighty people in the room who months before had been facing the Viet Cong were now
intimidated. Finally, a front-row resident raised his hand. Norm, he began.
Mr. Padgett, came a voice on the side of the stage, thereby answering one of Johnsons questions.
Mr. Padgett, you mentioned a code of behavior. Could you elaborate, please?
Padgett looked at the questioner. You will not cohabit with a woman who is not your wife. If you have
parties at your apartments and there are complaints, you will be dismissed. You will obey all traffic laws.
For example, you will not jaywalk in front of the training center, like Mr. Johnson did yesterday. The eyes
focused on Johnson. His color rose up his neck, and the cold sweat began to develop. There was nervous
laughter in the room, and Buford reached over and punched him in the shoulder. Gorka tried to move as far
away as he could, fearing damnation would fall.
Quiet! You will keep your apartments clean, and you will be on time and in your places so class can
start on time. You will not borrow money from each other, and you will not discuss your compensation
with anyone. Any more questions?
There was a shuffling of feet and coughing, and then one of the women in the front row raised her hand.
Mr. Padgett, Im Kristen Kelley, and Im supposed to go to the Menlo Park office. She paused
expectantly. She got no response from Padgett, but there were a few snickers in the class. You mentioned
earlier, Kristen continued, that there was a dress code. Could you tell us what it is?
Padgett had been chewing his cigar, and it was getting grossly black and slick with saliva. He rolled it
around his mouth a few more times, eyes never moving from Kelley. Finally he took it out of his mouth
and said, Men will wear navy blue, gray, black, or brown suits; white shirts, black socks, and black or
brown shoes. There will be no facial hair, including sideburns, beards, or mustaches. You will maintain a
haircut similar to proper military cut. Women will wear skirts, jackets, and blouses. The skirts will not be
above the knees; no miniskirts, and no revealing or low necklines. Dress like you are going to call on a
client.
There was stunned silence in the room and a lot of looking at each other. Then a guy on the far side of
the room whose New York accent betrayed him asked, Do all the shirts have to be white? I wear white-
on-white shirts. Are those OK?
Padgett fixed him with his now-famous stare and growled, Anyone who wears white on white is either
a gangster or a pimp. Any more questions? It was said with a tone that indicated no more would be
welcome. Padgett continued, Im going to introduce you to your instructors, and then well break up into
smaller classes. He then introduced George Bates, who was overweight but had a perpetual look of humor
on his face. Next was John Steadman, a very sharp-looking, thin man with perfectly cut and trimmed hair
and a beautifully cut suit. He was followed by Phil Padgett, Norms brother, who was the jerk who had
been at the apartment telling people what section they were in. Next was a nondescript, small man who was
untidy and the only one not wearing a suit coat. His name was Dave Avery. The final man was named
Wally Ouch.
A package of sheets of paper was passing around the room, and everyone was taking a sheet. Padgett
continued, The paper being passed around tells you the class schedule for this week and where you are to
be. We will take a ten-minute break for you to get to your classes.
Just as Johnson started to get up, a huge hand clamped down on his left shoulder, dropping him back
into his chair. Damn, Johnson you cant stay out of trouble, can you? boomed a voice. He turned around
to see the enormous form of Jerry Andrews.
Hed known Andrews at Fort Ord, where hed been the operations officer in Johnsons battalion.
Andrews used his left hand because hed taken a .50-caliber bullet through his right bicep. While it had
incapacitated him and got him home from Vietnam, so enormous was his bicep that hed been able to keep
his armbut it had almost no mobility or strength. He couldnt salute, and he made the most of not having
to salute senior officers. Captain Andrews! Johnson said.
You never had any military bearing while we were in the army, and now were out, you call me
Captain? Its Jerry.
I havent seen you since Ord, said Johnson. Im surprised you recognized me. On the other hand,
you still look like something out of a nightmare. Johnson introduced Andrews to Gorka, Holland, and
Haynes.
We better get to class. You boys stay away from Old One-Shot here, and youll stay out of trouble,
came the rumbling of Andrewss voice, and a smile creased the face that could only be described as ugly.
They all stood up to leave, and Holland said, Whats this Old One-Shot? That the number of times
you can fuck a night? This was met with general guffaws and laughter.
Johnsons face went blank, but his eyes narrowed a bit and his mouth turned down at the corners in a
look of disapproval. I dont want to talk about it, he spat. He turned and walked out of the carrel.
 Chapter 8
The Slow Grind
Every day, the routine was the same. Up at 5:30 a.m., walk to the training center. Now that summer was
ending, the walk was mostly in the dark. There had been one change in the class schedules. One of the
instructors had had to leave the program due to family issues, and his replacement couldnt get to the center
until 9:00 a.m. That left a thirty-to-forty-five minute break, so Johnson and a few others would cross
Wilshire to have a small restaurant breakfast.
Johnson had discovered that the newsstand he had found the first day carried the Wall Street Journal,
but only a limited number. Unless he got there first, other students would buy them all. So Johnson would
get up, jump into his car, and race over and buy all the copies he could so he could then distribute them to
the other guys on his floor. Of course, this pissed off everyone else, but Johnsons attitude was, Fuck them.
This is the way its done.
In distributing the papers for free, he continued a pattern that he as yet hadnt seen the fault in. He was
attempting to make others dependent on him. Later, hed realize that if he were properly mercenary, hed
have charged the other guys for the paper. As long as he bought all the copies, no one could challenge his
monopoly. Even though the papers had a price on them the other guys didnt know what the papers cost in
LA, and since he had a monopoly they had no choice but to come to him. He could have marked them up
and returned his cost and a small profit.
Rather than take a profit from his willingness to inconvenience himself, though, he gave it away. He
might have been motivated to do the right thing, but really, it was more complex than that. He did it because
he wanted to be thanked and adulated. He wanted to have his peers, to whom he felt inferior, thank him so
he could say that it was nothing or that it didnt matter. To be adulated and thanked gave him a sense of
value, and for most of his life, he hadnt felt valued. He ignored the lesson that he had learned not half as
well as he should have: you cant buy friends.
Theyd been going to school for a month, most of the experience unremarkable. Then, one day the
section leaders announced that the next day, everyone would have to get up in front of their sections and
tell their life stories. That night, everyone was upset because few of them had ever made a public speech.
Johnson had taken speech classes in both high school and college and had made a number of speeches in
his college student senate. He shared with the guys some of his tips: start with a joke, make eye contact,
take a deep breath, keep it short, and dont say um or ah.
The next day, they were all sitting there as bright-eyed and bushy tailed as you can be on the few hours
of sleep temporary bachelors get. He was seated about halfway back, reading his Wall Street Journal, when
the instructor, George Bates, walked in. He was accompanied by a boy of about nine.
Good morning, everyone. This is my son George Junior. At home, we call him Master Bates. There
was a roar of laughter, and the boy gave his father the look of a kid being laughed at without knowing why.
I wanted him to hear some of your stories so he gets some idea of what you all went through and the
courage you all represent. So, whos going to be first? He looked around the room expectantly, but no
hands were raised. Someone has to be first.
There was a stir a row behind Johnson, and he turned to see Wilowatty standing.
George and Master Bates, he began to another round of raucous laughter, Phil Johnson is almost a
professional speaker. He has had speech classes and everything. Maybe he could go first and show us how
to do this. Johnsons mouth dropped. The crease of a smile crossed Wilowattys face, which he suppressed.
Johnson swore eternal vengeance.
Well, thats great! A professional speaker in our midst. Thank you for the suggestion, Wilowatty.
God, even the instructors called him by his last name! Mr. Johnson, youre up. Bates smiled at him with
a gleam in his eye.
Johnson had given no thought to what he was going to say. He had counted on having some doofus in
the front row volunteering and setting the standard. He got up and stood at his place. My name is Phil
Johnson
 He was interrupted by Bates. No, no. That wont do, Mr. Johnson. Half the class is looking at your
back. Come up here. He motioned to the place next to the podium. Johnson swore internally and walked
up behind the podium. You dont get to use the podium to hide behind, said Bates. So Johnson moved to
its left side.
My name is Phil Johnson, he began again, and Im not a professional speaker Extempore
speaking came easily to him. He was so unaware of his talents that he never realized that the wiring of his
brain allowed him to process information about a second before he spoke it, so he had the ability to form
the thoughts and get them to flow. For the next ten minutes, he took the class through his life as an army
brat, high school (undistinguished), college (bit more accomplishment), and then on to the army itself. He
unleashed it in detail: the flying, the shootdowns, the deaths, the wounding. He left out the reason Andrews
had referred to him as One-Shot, Dick Evanss death, and a few other issues that he thought would make
people think less of him. He got a few laughs, but mostly shocked silence. Most of the reaction came at the
tale of the wound. The one woman in the class smiled and giggled, but almost all the men squirmed in
discomfort with the mere thought of losing their dicks and balls.
He was followed by a guy named Stuart Mellman, who gave everyone some idea of the exciting life of
an air-force finance officer. Johnson wrote an idle mental note to himself: REMF. Rear-echelon
motherfucker. Next was a guy from California who had been a junior communications officer on the USS
Yorktown, an aircraft carrier off Vietnam.
Then came Joe Kennedy. Johnson was floored when Kennedy revealed that hed been a one-star general
and the senior Catholic chaplain in the Air Force. Hed been career military, even though a priest, but had
left the priesthood and the Air Force to marry. Kennedy was also the oldest person in the class at fifty-four.
The last guy before break was Wilowatty. Johnson looked forward to this, because although he lived
next to the guy, he knew nothing about him. He was disappointed. He expected Wilowatty to give his first
nameno dice. Then he expected to hear what hed done in the navy. He only got confirmation that hed
been in the navy. He did learn that Wilowatty had been a door-to-door salesman before he entered the Navy
and that somewhere there was a current Mrs. Wilowatty.
Bates sent them on break, but they were late in leaving their room, and the line for the restaurant across
the street was out the door. So Johnson decided to try to get to the Ambassador Hotel and see if he could
grab something quick. As he speed walked and jogged down Wilshire (or was it up since he was going
west?), he passed a bum standing on the sidewalk. As Johnson passed, the bum growled, Spare some
change? Johnson just kept moving.
At the hotel, he stopped the first person he ran into and was directed to a small store. He dashed in and
grabbed a bottle of orange juice and a roll. He was in line behind a man who was purchasing a shirt. The
man turned in profile, and Johnson said, You look just like Barry Goldwater.
The man peered back through his black-rimmed glasses and said, That might be because I am Barry
Goldwater.
Johnson was amazed. Here he was, talking to a two-star air-force general, a US senator, and the
Republican candidate for president in 1964. Im honored to meet you, Senator. There was no more
conversation as Goldwater paid for his shirt and left. Johnson threw money at the cashier and dashed out.
He was going to be cutting it fine.
On his way to the training center, the same bum asked for spare change.
Johnson dashed in just as Bates was calling everyone to order. The rest of the morning was more recitals
of military and civilian work histories, and Johnson realized that he was in for a lot of competition. Almost
everyone in the class had finance or sales experience, and he had none.
The last guy to present was a Canadian named Alex Dupree. Regardless of the French-sounding last
name, he was Scots. Hed been in the Canadian army and done liaison with the US Army at Fort Knox. He
had no sales training but revealed that he had played semipro tennis in Canada.
It was after Alex had spoken that Bates dropped the bomb. All the presentations had been videotaped
and would be reviewed by the training staff. Students would be given appraisals of their skills as a method
of helping them improve. He then dismissed class for the day.
 There was general milling around on the sidewalk outside, with people asking questions about what
theyd learned about each other. One of the guys was holding forth on how it was a violation of their civil
rights to be taped without permission. He was tall and lean with wire-rimmed glasses and short hair best
described as subfusc. Johnson wrote him off as a shit-house lawyer and turned to see Vince Martin and
Alex approaching.
Theyd gotten to talking, and Alex and Vince had a mutual interest in tennis. One of the other guys, Joe
Burden, was also interested in playing, and Martin wanted to know if Johnson was interested. Johnson had
played tennis years ago but wasnt on a par with Alex, and he was willing to bet that Martin was good. He
tried to get out of it by saying he didnt have a racquet and hadnt played for years. It did him no good. He
was the fourth, and Alex would lend him a racquet until he got one.
They agreed to meet at three that afternoon at the public courts a few blocks away. It was a discouraging
game from Johnsons standpoint. Even though he knew he was overmatched and out of practice, he
demanded better from himself and he cursed himself at every missed shot or double fault. As he missed and
flubbed, he got madder and madderand he played worse. The first set, he was paired with Martin, and
the second with Alex. They lost both due to his play.
It was hot, and everyone worked up a real sweat. Martin suggested going to a bar nearby for a beer.
Johnson was so mad at himself, he left without telling anyone. All the way to the apartment, he banged his
fist against the steering wheel of the Datsun, running himself down for his lousy play.
By the time he got to his apartment, he was in a fine rage, red in the face and walking in that forceful,
arm-swinging manner called storming. Gorka was in the apartment. What the hell happened to you?
Fucking tennis is what happened! Johnson ejaculated. Fucking tennis! I played like a retard and lost
both sets. Im just a jerk! When will I realize that Im not an athlete? Fuck, fuck, fuck! The last three were
said in a rising scale of volume until the final word was a scream punctuated with a fist driven into the
padded back of a chair.
Jesus! Its only a tennis game. Was there money on it? Johnson stood there, not replying. Gorka then
ignored him and went back to organizing some paperwork.
Johnson didnt know how to say what he was feeling. He had been brought up in a stoic household
where problems were your own and you dealt with them without whining. Even when hed fallen off his
bike and required stitches, hed got little comfort. When his father visited him in the hospital after Vietnam,
hed asked if he was in much pain. When Johnson replied, A lot, his father had dismissed it with the
statement that it was probably not as bad as he thought. Those were the last words his father had said to
him about his wound.
His rage at his play was fading, and there was a feeling of emptiness as the rage was replaced by
embarrassment. The wrongness of how he had reacted settled on him like a wet blanket as his adrenaline
and endorphin levels fell. Suddenly, his right shoulder began to hurt and then his leg. About five minutes
later, he had a crushing cramp in his midsection accompanied by an extreme urgency to take a crap. He
barely made it to the toilet before his insides emptied in a rush of diarrhea and gas.
There are few things in life that make a person feel worse than explosive diarrhea. It seemed
counterintuitive that when he took a crap it made him feel worse, but it happened, and there was no way to
do it quietly. He limped out of the bathroom and collapsed in the chair hed punched. He lay there in a cold
sweat while his butthole burned and his gut hurt. Finally, he started to feel better. He got up and moved to
grab his book from the coffee table.
Martin threw open the door. Were the fuck did you go? We were all looking for you, and you were
gone! By the way, have you played tennis since your arms and legs grew back? You should have seen him,
Rich. Some of the drunks in the park could have beaten him!
I told you assholes I hadnt played in a long time. Not since before Vietnam. So you got what you
asked for. His anger was incendiary, but it burned fast and was gone. Hed read in Richard II: His rash
fierce blaze of riot cannot last. For violent fires soon burn out themselves.
Martin laughed and said, Alex thinks if you had a decent racquet and worked a bit, you could be really
good. Want to play on Saturday?
 Johnson said he did, and they set a date. Martin left, and Johnson and Gorka settled down to study the
materials theyd been given.
 Chapter 9
Conflict and Contact
It was an idyllic time. School wasnt too demanding. It was getting darker earlier, and the temperatures
were a bit cooler. A pattern set in: school in the morning, tennis several times a week, and beer parties on
the roof while, without the smog, the billions of stars in the southern sky were finally visible. Weekends
were spent cruising around, looking at the sights.
About two weeks after they had all done their talks, Johnson noticed that the class seemed smaller. It
wasnt that anyone he knew well was gone, just faces he no longer saw. He walked into class one day and
noticed that Alex wasnt there, which was strange, as theyd played tennis the night before. He asked
around, and the rumor was that hed quit.
George Bates arrived and told everyone that Alex hadnt quit. He had been dismissed. Everyone was
shocked. Alex had been well liked. Someone asked what happened. Bates waved his hand dismissively and
said, He said some things on his applications that werent true. Class went on.
The relationships between men in combat or especially difficult circumstances can be as close and
intimate as any. These relationships form quickly around the shared sacrifice, but theres always an edge
of insecurity about them. The intensity of the formation is paired with the quick dismissal of departure. It
was a lesson that would be repeated far into the future: brokers who left were forgotten, and indeed often
reviled, soon after they left.
Whatever was happening was in high gear now, and every day it seemed someone was disappearing.
There were the rumors and stories about reasons ranging from the firm being in financial trouble to people
quitting. One night in a bar that had become their hangout, the shit-house lawyer whose name was John
Mardon was there holding forth on how DuPuy and Winston was using the video presentations to check up
on the class and if there were any discrepancies, they were firing people.
Johnston thought Mardon was a total asshole, but there seemed to be something in what he was saying.
The staff seemed to know things about people that werent public; things they did were being reported to
the instructors. Johnson got to wondering how Padgett had known of his confrontation with the cop. Were
there spies in class? He wondered if they werent watching the trainees, bugging the apartments. Norm
Padgett had said that they would be held to a high standard of conduct. You know, he said when Mardon
was quiet for a minute, Padgett warned us that there was code of conduct and that we would be dismissed
if we violated it. So if you lied on your resume that would be a violation.
Mardon didnt miss a beat. Spoken like a true lifer, he spat. You dont see this place is all a lie? Its
founded on a lie, and it is a lie. The firms were in bankruptcy when Mortensen bought them, and theyll
never be anything but second-rate firms in the bigger scheme. Lifer was a disparaging term in those days,
indicating a mentally slow person whose lack of acuity condemned him to an automaton-like adherence to
military-style rules.
Johnson leveled a gaze at Mardon. Who appointed you the judge of all of us? Youre here just like us,
so if were all living a lie, so are you. If youre so unhappy, why dont you leave?
Maybe I will. At least it would get me away from losers like you, Johnson. Johnson felt his muscles
tighten and a rush of adrenalin as he got ready to deck Mardon. Martin put his hand on him and said, Lets
get out of here. This is guy is a bunch of shit.
One of the exercises in the training class was to get over the natural fear of contacting what were called
the elephants. An elephant was a person who was very rich and well known. They had walls of assistants
and functionaries around them and were called on by everyone in the business. Twice in the six-month
program, each trainee was required to arrange an interview with an elephant. For his first assignment,
Johnson had waylaid Roy Ash, the chairman of Litton Industries. Gorka had surprised everyone by getting
an interview with the actress Deborah Kerr. Each trainee had to stand up and present to the class his
elephant.
Mardon got up and began to talk. He didnt name the person but talked about how the person was a
leader and a supervisor of thirty-five people and made ton of money. He waxed poetic about his elephants
leadership and placement in his industry. At the end of his talk, he said, And the name of my new friend
is Jack Diamond, and hes the manager of the Merrill Lynch office on Wilshire. As he finished that
statement, he turned and walked out of the classroom, never to be seen again. Mardon went to work for
Merrill. Merrill had agreed to pay him fifteen hundred bucks for every trainee he could poach. He finally
got six.
As the fall wore on, the trainees roamed further and further afield in the adult theme park that is LA.
One night while they were up on the roof, Roates told the story of a great bar that hed found in Marina del
Rey. He said it was crawling with broads. The next Saturday, Carpano, Martin, Wilowatty, Roates, and
Johnson drove the fifty miles to the bar. It was called the Basement and was really the first floor of a
building with a restaurant on top called the Second Story.
At the bottom of the stairs, a very large man blocking the door rudely demanded a ten-dollar entrance
fee. Roates was right. The place was packed with people, and a good number of them were babes: tall,
willowy blondes and voluptuous redheads and buxom brunettes gyrating to the pulsing music. There were
so many people, it was impossible to get to the bar.
After they pushed into the crowd, they worked around the room, looking for a table or chair or
something. There was a main room with the bar and a second room two steps down for dancing. He and
Roates moved toward the bar, with Johnson slightly behind like a good wingman. About a dozen steps from
the bar were two women.
One was blond and about five feet six and the other slightly taller, with long, thick dark-red hair. She
was packed into a red sweater and a pair of partial bell bottoms in a red-and-white check pattern. Her eyes
had a bold, questioning look; she was so magnetic that the normal crowd seemed to part around her. She
seemed totally oblivious to all the people and stood there looking at Roates and Johnson. Jamie had waylaid
a waitress and said to the two women, Can we buy you a drink? They replied, but Johnsons damaged
hearing didnt catch the words.
The waitress returned with the drinks. Mortensens dress rule, especially the haircuts, made the trainees
look military. Jamie had been using a line, asking women a question: If you looked at my friend and I,
what would you think we did for a living? The usual response was that they looked as if they were privates
in the Marine Corps. That led to the response, No, were stockbrokers! That usually surprised the women
and started the conversation.
In this case, right after Jamie finished the last syllable, the redhead said, Id say youre stockbroker
trainees for DuPuy and Winston. Roates was taken aback, and Johnson looked at her and saw she was
smiling in a self-satisfied, smartass way. Then she and her friend turned and left without another word.
Johnson wandered around for a while. Roates and some of the others danced with a few girls, but
Johnson had never been a dancer of any kind, so he people-watched.
The bar was whirl of color and action. The women played a coy game. They came dressed in outfits to
attract men, but having gained the attention they desired, they feigned disinterest and the courtship dance
started. It was as complex as the mating ritual of any animal on earth. The hardest thing for a guy or a girl
is to get an acceptable date when there are a lot of opportunities. There were lots of beautiful women in the
place, and the competition was intense.
He began to notice a pattern. There were the women who parked at the bar and let men come to them,
and around each one there was a small crowd. There were groups of guys standing around with no women,
just casting glances. There were groups of women staying in their coveys of four to six. In each covey, there
were a couple as ugly as sin. Guys would zoom in on beauties, and if they hadnt provided someone to
entertain the ugly girls, they would be rejected. Johnson, who was incredibly stupid about dating, realized
it was the wingman scheme. The ugly girls were the beauties wing men. If the beauty wanted to let the guy
in, shed ignore the wingman. If not, the wingman protected the leader. The guys did the same thing. A
flight of two would approach the target. The leader went for the beauty, and the wingman led the ugly one
off.
It was obvious that the ugly girls were being exploited. The womens behavior seemed cruel.
The gangs of guys seemed to be waiting for women to notice them. They were, almost to a man, tall
and athletic looking, wearing tight shirts showing off their biceps. They were likely jocks and used to being
the center of attention. The women, for their parts, were the ones that usually matched up with the jocks
and also usually the center of attention. He wondered why one of the jocks didnt work the same situation
as the woman. Bring a couple of not-so-hot-looking guys who would be willing to dance with the shield
broad. He grew bored and looked around.
There were a lot of attractive women, and he had an urge to talk to some of them, but he remained
inactive. It was certainly not because hed had a lot of sex lately. His last time had been with a whore in
Vietnam. He was concerned that his plumbing didnt work, but the real reason for not acting was his self-
talk.
Each of us develops a self-talk that allows us to make sense of difficult or hurtful situations and affirms
our actions. It can overpower rationality. Its largely a defense mechanism. Hed developed his over a lot
of years of flailing through the slings and arrows of outrageous fortune, and it went something like this: All
the people here came to dance, but Im not a dancer. Theres no purpose to it, so Im not going to meet
anyone that way. My exposure to artillery, small arms, and helicopter noises damaged my hearing, and its
very hard to hear clearly in a loud place like this. A lot of these girls are skanks anyway, and so on.
He was preparing what hed say to the other guys and so created a self-fulfilling prophecy of inaction
to cover the real reasonthat he was afraid of rejection, and hed rather be alone than face that reality. His
fear of rejection didnt extend to his mind; he saw himself taking great risks and being well rewarded. His
fear of rejection fought with his desire to be successful and to do everything perfectly, creating stress in his
soul and a doorway to depression.
As he was having the talk with himself, he saw Carpano waving him over, and he pushed his way
through the crowd. Guy told him he was leaving with a couple of other men. Johnson said hed go and find
Roates and tell him.
It was the last time anyone saw Roates. Sunday dawned and Roates was gone, his stuff moved out of
the apartment, car gone. No note, phone call, or notification. On Monday, no word from the staff or any
mention of his departure. He was just gone.
One of the advantages of having been in combat and being male is compartmentalization. With the
constant losses in combat, those who were lost were placed in a box so the hurt of the loss wouldnt
contaminate the rest of the mind. It was a lie, of course. No one is that good. The hurt was still there, like a
disease controlled but not cured. If you could control the return of the hurt, you lived your life with a
measure of constant tension. If you let it out, you ran the risk of not being able to control its effects on your
own psyche. So you held it in and lost the key to the compartment.
 Chapter 10
The Bloody Shirt
In late October, the trainees faced the first of the three tests necessary to be a broker. It was about
commodities trading, and for days, theyd been listening to lectures on the margin requirements needed to
own hog bellies. No one knew what a hog belly was, and no one seemed to care. Commodities were the
bastard stepchild of the business, the realm of toothless hicks from the Midwest whose idea of formal dress
was false teeth and clean overalls.
Theyd been provided with a sample test, and some of those questions could be on the current test. The
class had been divided into study groups of six. There was one question that no one had been able to answer.
It had to do with the options for live cattle and what to do with them at contract termination.
Everyone in the group except Johnson had worked the problem and presented their answers. The staff
had ruled them all wrong. The other groups had been having the same problem. Johnson decided to take on
the challenge. First, he studied the various solutions and read the margin requirements and then the question,
several times. He worked the math of each solution and finally came up with an answer. He was told, again,
it was wrong. This pissed him off, so the next thing he did was call one of DuPuy and Winstons offices
and talk to a commodity margin clerk whose job it was to do this for real customers. Together they worked
it out and got a solution. He presented it to the staff. Wrong again.
Now he was really angry. Something was wrong. How could everyone be wrong? If they were all
wrong, then a lot of people were losing a lot of money. He and Martin hatched a plan. The test was on
Friday and it was Tuesday now, so he had to hustle. That afternoon, he called the Chicago Board of Trade,
which was the regulatory agency that controlled the test and ultimately set the rules. After some wait,
forwarding, and getting cut off a couple of times, he reached the training section.
He explained the problem he was having and what hed done so far. Johnson told them his test was on
Friday and he needed an answer before then. The official told him hed call back the next day.
The next day in class, Phil Padgett walked in and dropped a sheet of paper in front of him. Youre not
supposed to be getting personal calls at the center, Johnson.
It wasnt personal. It had to do with the test on Friday. I called the Board of Trade for help, and since
I was going to be in class, I had them call here.
Whats the issue here, Johnson? This is only one question, and its probably not even on the test.
Youre wasting your time and energy on this stupid thing. The key to success in this business is knowing
how to allocate your time. If this is the way you do it, youre not long for the business!
Johnsons temper was never far from the surface, and he was pissed off at Padgett in any case. He was
about to punch the slimy bastard, but instead of a fist, he used his merciless tongue. Phil, since when are
you any expert on production in the brokerage business? I hear your brother rescued you from being fired.
Everyone gives off signs that theyre mad. It might be a ticthe narrowing of the eyes, flushing at the
neck, veins popping out, but there was something. Padgetts vein in the middle of his forehead came out
pulsing, and he flushed red. He turned and walked away.
Boy, did you just fuck yourself, Johnson, said Joe Kennedy. Hes going to get you somehow,
someway.
If he tries anything, Ill beat the shit out of him! growled Johnson.
You wont get the chance. It will be something subtle and really nasty, if I know him, said Kennedy.
But whats done is done. What is the answer from on high? he asked, referring to the note.
Its just a number to call back. Says he has the answer. Where can we call from?
Theres a speakerphone in the back room, interjected Maurice Dumonde, one of the Canadians.
Johnson, Maurice, Kennedy, Vince Martin, Carpano, and Gorka all trooped to the back room. Gorka
delivered his Jeremiah warning. Were not supposed to be in this room. Its for staff only.
Speakerphones were kind of rare in those days, but Johnson had used one before, so he got it connected
and dialed the call. His contact at the Board of Trade answered on the second ring. Hi, Stuart, this is Phil
Johnson returning your call.
 Thanks, Phil. Sounds like were on a speakerphone? responded Stuart Levin in Chicago.
Yeah, I have a few of my classmates with me. Weve all taken a crack at this question and weve all
gotten the wrong answer, so I wanted them to hear what you had to say.
OK, I guess I dont mind being embarrassed in front of a crowd. I worked out the problem and checked
it with the test answers, and I was wrong. I had several others try the problem, and they all got it wrong.
Some of these folks have been in commodity trading for forty years! They all laughed. Sooooo, Stuart
said, we have to admit we dont know the answer. I think something is missing from the question, or
theres another option. We talked it over and we looked at the correct answer. We dont know how or why,
but the correct answer is to deliver the cattle to the cash point in Guymon, Oklahoma. So, you all have at
least one answer correct.
There was a lot of good laughter, and they hung up and walked back to the training room. Theyd just
sat down when George Bates walked in. I hope youre all ready for the test on Friday. We have to start the
next training section.
Martin raised his hand and, without waiting for Bates, announced to the class that the question regarding
the cattle delivery was on their test and the correct answer was to deliver to Guymon. Bates looked around
in utter confusion as the room erupted in laughter. Deliver to Guymon, became the class watchword for
the next three days. When they met each other, they would deliver the line, Remember, deliver to
Guymon, laugh, and pass on.
The test started first thing on Friday, and there it was, question fifty-four: What do you do with live
cattle under the following conditions? As each student reached the question, you could hear laughs or see
smiles and looking around with the knowledge of how the answer had gotten there and how no one really
understood the reasoning behind it. But who cared?
After the test, they had a class on mechanical efficiencyhow to file papers and fill out order tickets
and what to do with client records. It was probably really important, but it was boring. They were on a high
from the test, and they really didnt care
On the way up Wilshire, there was the bum who mumbled every day, Spare some change?
Normally they hurried by. Today they all replied, Deliver to Guymon.
No one was in the mood to study, so they went to the beach in Santa Monica. They got back about six
and were getting ready to cook dinner when the phone rang. It was Bob Holland, Bufords friend from
Dallas, telling Johnson that a bunch of people were over at the bar behind the Equitable Insurance building,
celebrating. Johnson said hed be right over. Martin, Wilowatty and a guy named Bob Spicer joined him.
The place was packed, very noisy not only with the class from DuPuy and Winston but with the normal
people from the Equitable and surrounding buildings. There were a few Catholic priests there, and Johnson
remembered that the cathedral was just up the street. They all got down to the serious business of drinking
and lying to each other. He looked over at one of the tables, and a guy named Larry Davis from Topeka,
Kansas, was there in a clinch with some woman that was about one step from being open sex in a chair.
Johnson talked and laughed awhile and then disappeared. It wasnt his crowd. His hearing was
betraying him. He walked back to the apartment, glad to be in alone in the relative quiet of the outdoors.
Gorka was gone when he got there and Johnson sat down and started to read a book. He was just getting
comfortable when he heard a loud bang closely followed by another and then more. It had a faint, metallic
ring to it and was getting louder, accompanied now by cursing.
It was coming from Carpanos apartment. He walked over, carrying his beer, to see if everything was
all right. The door was open, and Guy was standing over the stove, shaking two frying pans inverted on
each other. The explosions were coming from the pans.
What the fuck are you doing? he shouted. Sounds like a firefight in here!
Im trying to roast chestnuts, and the goddamned things are exploding! I cant see whats wrong,
because if I open this up, theyll explode all over the place! Guy shouted back.
Johnson reached over and turned the burner down to medium. That might help. They may be cooking
too fast.
With the reduced heat, the number of explosions diminished. When they stopped, Guy lifted the
inverted frying pan. The cooler air hit the chestnuts and several exploded, showering them with chestnut
shrapnel. Johnson dropped his beer and hit the deck as pieces of chestnut whizzed by. Guy covered the pan
quickly, and Johnson started to get up. It was then that he noticed a pair of womens shoes not too far from
his face, filled with feet that led to ankles and then to legs that were encased in very tight, white pants. He
turned his head and followed the calves to the thighs, and at the limit of his neck rotation, his eyes rested
on her crotch.
Doing push-ups, are we? she asked in a husky, alto voice.
Phil still thinks hes back in Vietnam. Every time theres a loud noise, he hits the deck. Hey, asshole,
Carpano said, throwing a roll of paper towels at him, clean up the spilled beer, or this place will smell like
a sleazy bar after a bad night! Miserable waste of beer.
Johnson went into a push-up position and in one of those macho displays men in heat are fond of, he
pushed up with his arms while bringing his feet forward so that it appeared that in one fluid motion, he
stood up. He grabbed the paper towels and bent over to get the beer bottle.
Here, let me help, the unknown woman said. She took the towels and maneuvered herself so that her
back was to Johnson and Carpano. Then she bent over from the waist, cleaning up the beer, while the tight,
white pants stretched more tightly over her well-rounded butt, clearly showing the panty line. The move
riveted Johnson and Carpanos attention as it was designed to.
Johnson was too focused on the womans butt to say anything, so Carpano said, Im Guy Carpano,
and my beer-dropping friend who crawls on his belly like a snake is Phil Johnson.
She straightened up, and they could see that the white blouse she was wearing was well filled with a
nice set of boobs. Im T. J. Greer; I live downstairs. I heard the explosions and came up to see what was
going on.
Sorry for disturbing you, the men said almost simultaneously to her boobs. The effect of her butt and
breasts had been so perfect that they were afraid her face would spoil the effect. When they did finally look
up, they werent totally disappointed.
The first thing they noticed was that she was olderabout thirty-five, Johnson guessed. She had some
wrinkles around her eyes that hed later learn women lie about, calling them laugh lines. She did have a
really nice smile with a full set of nice, white teeth. Her head was topped with shoulder-length black hair
that was curled and nicely arranged. She had no jewelry on, not even earrings or a necklace.
As she talked, her eyes focused directly on the listeners face. For Johnson, the effect was challenging,
mostly because he was always sneaking (he thought) a look at her boobs, crotch, or butt. He finally decided
it was time to return her gaze, so he forced himself to look her straight in the eye. Hed later learn that this
was a signal.
The smoke cloud that was Wilowatty blew in from the hall. Like an ocean liner entering a harbor, he
was attended by his tugboats Martin, Kennedy, Spicer, and Dumonde, each carrying a case of beer. Hey,
Carpano! belched Wilowatty, swinging two cases. These were all downstairs with notes on them saying
they were for you, so we brought them up. What gives?
I bet a bunch of guys that the Guymon question was on the test, Guy answered. I bet six guys in the
other class a case each, and theyre paying off.
That was a riskless bet for you, Johnson said. You knew the question was on the test since you were
in the conference call with the CBT.
This business is not about making bets that have risk, Carpano replied. Its about having superior
knowledge and taking advantage of it. If the other guy is not as smart, you take advantage of him. Thats
what the world is all about.
The cruelty of the comment struck Johnson, but he didnt have the time to respond because the noise
level increased as people started to arrive. He became aware that T. J. was standing next to him with her
hip touching his thigh. Impulsively, he reached out and wrapped his arm around her waist, and she
responded by tucking in closer.
Wine, more beer, and hard liquor had begun to show up, and the best kind of impromptu party,
motivated by the release of tension, was underway. As he moved around saying hello to everyone, T. J.
never left his side, and each time after she shook hands, she returned her arm to his waist. She was clearly
marking her territory.
 The party rolled on until about ten when Guy and Maurice told everyone that the party had to end.
People began to wander out, but Johnson stayed and offered to help Guy and Maurice clean up. Guy said,
No, you have other obligations. Johnson was so nave about things that he didnt understand that Carpano
meant T. J.
I guess wed better go, he said to her, looking down at her upturned face.
Im not ready to stop the party, she said. Lets go to your apartment.
My roommate is there, and hell be in bed. His remark in the context of the other remarks had sexual
overtones, but to him, it was totally innocent.
I guess we have to go to my place. A huge smile crossed her face. Her apartment was right below
Guys.
After they got inside, she refreshed her drink. Johnson still had a full beer, so they sat down on the
couch that was exactly the same as the one in his apartment. They talked for a while, and she leaned into
him. He put his arm around her shoulders, and she nestled into the angle formed by his chest and shoulder.
He didnt know how it happened, but soon, they were kissing. Did he start it or her? It was the kind of
silly question hed try to intellectualize, but he didnt have time. Her kisses were sweet, lips moist and
slightly parted, firm but yielding to the increasing pressure of his own. There was no doubt about who
started the next phase.
Her tongue darted lightning fast from her mouth, touched the bottom of his upper lip, and then retracted.
It was like a static shock. His lip was almost numb, and he gasped a bit. Then he returned the favor. He had
no experience with the nuances of lovemaking. Most of the women hed had sex with, hed paid. He took
his tongue and ran the tip between her parted lips and was rewarded with a soft sound like, Ummm
She broke away and put his beer and her drink on the end table. They kissed with rising intensity,
tongues penetrating deeper and deeper, dueling with each other inside first her mouth and then his. At some
point, his left hand moved down to her waist, and her blouse had become untucked. His thumb ran over the
bottom hem of her bra. He could feel the swell of her breast, and with a millisecond of hesitation, he slid
his hand up and softly cupped it.
The nipple enlarged and became hard, pressing into the palm of his hand. She emitted a moan from the
bottom of her soul and sounded like an animal after a meal. She broke the kiss to pant. Her hand was on the
back of his head, and she tilted her head up and breathlessly said, N-ooo, so softly he could barely hear
it over the noise of the ever-present tinnitus.
His gentlemanly side told him to stop, but it had been so long since hed had sex, and he was so turned
on that he ignored the protest. She doesnt mean it, anyway, he thought. She wouldnt be hanging around a
bunch of horny guys dressed like a hooker if she didnt want to get laid. In the end, testosterone trumped
gentlemanliness.
The rest of the night was an unending series of sweaty-bodied collisions in the dark of her bedroom.
She loved sex and was totally uninhibited. He hadnt known it was physically possible to do some of the
things they did.
The dawn found them tangled in sheets and blankets, with pillows all over the bed and floor. Like a lot
of womens beds, hers had been covered with decorative cushions. She was on her back, snoring quietly
and smelling musky and slightly acidic. He was naked on his stomach. He had to pee and he tried to get up,
only to find one of her legs across the small of his back. He worked his way out without waking her, walked
to the bathroom, and sat down on the stool. He had no more hit the seat when he emitted a fart that truly
sounded like morning thunder. A sleepy voice said, Turn on the fan.
The night had cleared up a number of things that had been a mystery since hed left the hospital. None
of the doctors had been able to say for certain if the repairs would allow him to get an erection. That one
was solved. The second issue was whether hed be able to produce sperm due to the scar tissue from the
surgeries. The final question struck him like a hammer. The final question was if hed be fertile.
There had been no discussion of birth control, condoms, or anything. Good God! What if I knock her
up? He started to worry immediately. He took his dick in his hand and started to examine it. It was red and
irritated; steel wouldve been worn thin if it had done what his dick had done in the last eight hours. The
scar on the bottom was especially red and raw, and it stung as the air hit it. The other scars on his legs and
abdomen were there, butt-ugly as ever, and now another worry came. It had been dark when they got naked.
What if she sees the scars and thinks I have some disease? He got up and left the bathroom, wrapping a
towel around his waist.
Now youre modest? she asked as she reached out and ripped the towel off. Ill be right back. He
was gratified to see that her body was firm. Her breasts were large, but they were also high and firm; her
butt didnt wiggle like Jell-O when she walked, and she didnt have a lot of fat on her. He stood there like
a fool in the center of the bedroom, just staring around. She flushed the toilet and came back in. Something
the matter? she asked. Hed turned away from her, toward the window. You shy about me seeing you
naked in the daylight?
He turned toward her. No, Im afraid of what youre going to do when you see all of this, and he
pointed to his scars and wounds. Its from the wounds in Vietnam. I dont have a disease or anything.
Too late if you do. After last night, if you have anything transmitted by sex, Im going to have it all
over my body. You were like a bull last night. Every time I turned around, you were after menot that Im
complaining.
Been a long time since I did this, he replied. I guess you were the beneficiary of a lot of saving up.
She flopped back on the bed, smiled, and said, Im always willing to take on new deposits.
It was about noon when they awoke from a sleep of near exhaustion and dehydration by a knocking on
the door. Who the hell is that? She got up, pulled her robe on, walked to the door, and looked through the
security peephole. Its one of the guys from the party last night. You get it, she said as she turned away
from the door.
He got up, pulled on his pants, and opened the door. It was Gorka. You coming up for lunch? Gorka
asked.
I dont think so. You can tell all the guys that I survived the night, which I know is the reason they
sent you down here. He shut the door.
He finally got back to his apartment about an hour before they had to leave for class on Monday, and
he somehow managed to stay awake all day, but it wasnt easy.
As they were walking home that afternoon, it was warm enough to be uncomfortable with a jacket on,
so they took their suit coats off and carried them over their shoulders. Johnson could hear Wilowatty and
Martin making smart remarks behind him, but with the traffic noise and the ringing in his ears, he couldnt
hear what they were saying. He did notice that his shirt was tight and pulling across his shoulders. Finally,
Gorka said to him, Phil youre going to have to replace that shirt and have your suit coat cleaned.
Why? he responded, clueless.
The blood is seeping through the shirt and is on the lining of your coat. What happened to you? Gorka
asked.
In a flash, he remembered that in the midst of their passion, T. J. had dragged her nails across his
shoulders not once, but every time, for nearly a day and a half. When he got to the apartment, he took off
his shirt, and sure enough, on each side of it were bloody lines in sets of four that marked the passage of
her nails.
 Chapter 11
The Coconut Grove
A week after the commodity test, Norm Padgett announced that Moody Mortensen was coming to LA and
that there was going to be a party for the staff of all the DuPuy and Winston offices all over the Southland,
as the LA area was called. All the trainees were expected to be there and to make nice.
They were really into the guts of the training course now. They spent days on stuff like order precedence
and priority and the role of the specialist on the floor. The classes on mechanical efficiency came every
day, and Johnson still wondered if it was really important. They were working up to a new assignment.
One of the toughest things for most people to do is to approach total strangers one after the other, trying
to sell them something. Its one thing if you have a hard product like a vacuum cleaner; its doubly hard if
the whole sale depends on getting the other person to trust you.
Theyd been doing role-plays, selling to each other under the tutelage of the staff, all of whom where
experienced salespeople. The formula for success, according to the staff, was that you had to reach thirty-
five people a day via cold calls and develop ten qualified prospects. From that, you could expect to develop
two customers and maybe one client. There was a joke that the difference between a wife and a girlfriend
was forty-five pounds; the difference between a client and a customer was if your first recommendation
made money.
The first step was rapport. This involved finding something in common with the prospect. This rapport
could depend on knowing something about the persons business or anything, however tenuous, that gave
you a link.
Next, you tried to discover a problem the prospect had. If he didnt have a problem, you created one.
George Bates was fond of saying that there were only three reasons people did anything: fear, hope, and
greed, and that no stock had ever been bought; theyd all been sold. Not enough money for retirement?
Need to put kids through college? Care for an aging parent? Whatever. You established a problem, and of
course you had the solution, which was the same for everyone. Then you moved in to sell the benefits of
the productnever the facts, just the benefitsthe sizzle, not the steak. Finally, you closed the sale, asking
for the order. So, Mr. Blank, you can see that in order to gather enough money for your retirement, you
couldnt make a better choice than to purchase Consolidated Pigeon Crap Processors. Shall I put you down
for five hundred shares, or would a thousand be better for you?
It was possible to give a broker the training in sales, but the great unknown was if they would have the
desire to go through the daily grind of maybe a hundred calls per day, five days a week, for years. Who
would be able to make the sacrifice was of the utmost concern, so the staff devised a unique process to
winnow the class.
They found a charity that educated and fed poor people in Watts and had the trainees raise money for
it. To make the problem harder, the charity wasnt a tax-free organization, and it wasnt supported by the
large omnibus charities like United Way or Community Chest. The goal for each person had been set at
$1,000. Johnson thought that was a ridiculously low number and was confident that he could raise the
money very quickly. Some of the other guys who actually had sales experience seemed very glum about
the amount they had to raise. It should have been a warning.
Johnsons group had been assigned downtown Santa Monica. They were given five mornings to raise
the money. Theyd been given some cheesy literature and turned loose. His group decided to start each day
with breakfast at Dennys. The first day after breakfast, he started to walk the streets. He had no plan other
than to open doors and try to get someones attention.
He had no success. In fact, he was escorted out of a couple of places. But he kept it up for three hours.
With each refusal he grew more frustrated, and then he got mad. Hed never had any luck disguising his
emotions, which didnt help the sales process. The guys drove in silence, and he didnt get any more calm
in the LA traffic. He was pissed off the rest of the day.
The other guys were talking about the money they raised, and he felt like an idiot, as hed gotten
nothing. Hed just work harder the next day. He worked the same nonplan, just dropping in. At the third
place he was told to leave, and as he walked out, there was a Santa Monica Police car outside. The officer
motioned him over. Can I see some ID? the officer asked, moving his hand to the butt of his gun.
What did I do, officer? Johnson asked.
ID, was the reply, made with a slight twisting motion of the gun. Johnson opened his wallet and
handed the officer his drivers license and military ID. What are you doing in Santa Monica, Mr. Johnson?
the officer asked, looking him up and down.
I work for DuPuy and Winston, the brokerage house, and part of our training is to collect money for a
charity. I was assigned to the Santa Monica area. Is there a problem, officer? This came out more sarcastic
than he wanted, and the officer picked it up.
The problem, Johnsongone was any honorificis that Santa Monica has a law requiring solicitors
to have a license before they begin to ask for money. Weve been getting calls from all over about you
guys.
You have to be kidding me, officer! Who ever heard of a license to collect money? Im just trying to
complete a class assignment. Im not hurting anyone. He was often affected by a condition he called
Mississippi River syndrome: he ran over at the mouth. And it had happened again. Id think that you have
better things to do than hassle me.
The officer stiffened, and his face showed that hed made a decision. Turn around, face the building,
place your hands on the wall, and spread your legs. Youre under arrest. The officer did a quick pat down,
and then, none too gently and a bit too tightly, cuffed him. Mr. Johnson, Im arresting you for violation of
the city ordinance requiring a license to solicit. Anything you say can and will be used against you in court.
Thats a pretty crappy Miranda warning, said Johnson. You left about half of it out, and it wont
hold up in court. Youd know that if you were anything other than a badge-heavy, gun-toting goon.
Now youre a fucking lawyer? the officer said with quiet menace as he pushed Johnson toward the
police cruiser.
The rest of the day was a nightmare. He was dumped in the holding cell with two or three other guys
drunks and bums. This was Santa Monica, after all. The class of prisoners at 10:00 a.m. wasnt going to be
really hard-core. It took all day before the sergeant came to his cell and took him out.
It turned out that the officer couldnt arrest him for the license beef, but hed changed the complaint to
resisting arrest. The sergeant wrote him a ticket for the license deal and then a summons to appear in city
court on the resisting charge. By the time he was done with the endless paperwork, it was nearly 5:00 p.m.,
and he had to drive home in peak, rush-hour traffic, which did nothing for his mood.
He arrived at the apartment in high dudgeon and immediately got a beer, which he chugged. No one
was around, so he sat on the couch and drank another beer. Finally, he could hear the guys coming back,
and the door opened, with Gorka following. Hey, guys, hes in here! Soon, Carpano, Wilowatty, Martin,
Dumonde, and Joe Kennedy were in the apartment. What happened to you? they all asked.
I got fucking arrested by some fucking asshole cop who ought to take his gun and stick it up his fucking
asshole and shoot it. The fucking cocksucking, shit-eating, fucking fuck! he shouted. Everyone started to
laugh.
In any case, you need to get over to the training center. Norm and Davidoff have been asking where
you are, said Martin.
Thats just what I need right now. Two beers in me, and I have go and talk to Hitler and Dr. Death.
John Davidoff was the staffer in charge of compliance and legal affairs. It was widely believed that he was
the one who disposed of all the trainees that disappeared; thus the nickname.
He walked over to the training center and went up to the staff offices. Padgett and Davidoff were waiting
for him. Get in here, Johnson! growled Padgett. Im not sure what to do with you, Johnson. You almost
get arrested before class starts, and now we send you out on a simple charity fund drive and you, and only
you, get arrested. What a mess you are!
Johnson was silent, but the anger was building. Johnson leaned forward, placing both hands on the
desk, and with a set face showing anger and a good deal of physical menace, he said, Listen, you pompous,
overweight asshole, you have all these rules of behavior, dress, and conduct, but you conveniently forget
to tell the class that we need solicitation licenses. You, and he pointed at Norm and Davidoff, sent us out
knowing we were going to violate the law. You morons cooked this up from the beginning. You were just
hoping that someone would get caught. Youre the ones that need to be arrested! He paused for a second
to catch his breath and then said, If youre going to fire me, go ahead. I dont think I want to work for
crooks like you. Maybe Ill go up to Merrill Lynch with that jerk Mardon, who maybe was right all along.
Youre fired, Johnson! Padgett replied with an equal amount of anger. Youre such a mess. No one
would do business with you anyway. We didnt cook anything up. Thats just an excuse for being a lousy
salesman!
Davidoff cleared his throat. Ah, Norm, I think we may have to rethink that. Norm turned to him in
anger, but Davidoff held up his hand. We really didnt check this charity thing out. This is the first time
we have done this exercise, and we really didnt know they needed licenses. If you fire him, he could sue
us for wrongful discharge, and we wouldnt have a leg to stand on.
Norm stared at Davidoff for a long moment and then turned to Johnson. Get the fuck out of here!
Youre lucky that Mr. Davidoff is here, or youd be out on your ass.
Johnson walked to the Ambassador and into the bar, and he proceeded to drink himself into a stupor.
The next day, hung over and feeling like hed been sacked by the LA Rams defensive line, he went out
with the guys to solicit. The first thing they did was go to the Santa Monica City Hall, where their
solicitation permits were ready. Apparently, DuPuy and Winston had called in and arranged for the permits
and paid for them.
Wilowatty wanted Johnson to go with him that day, so he tagged along. OK, Phil, youve had a real
hard time of this and you look like shit, so let me show you how Ive been doing it. He paused for a second
to inhale and exhale. Ive gotten my quota, and I have the rest of the week to help you.
They walked up and down the mall area in Santa Monica, and Wilowatty looked in the store windows.
After passing about six shops, he found one he apparently liked, and he crushed out his cigarette and walked
in. There were no customers in the place, and the staff consisted of two youngish women probably in their
early twenties.
Wilowatty addressed the young woman behind the counter. She was homely and had the appearance of
someone who was hungry for some attention. Her clothing was nice but showed signs of not being well
made, and her hair could have used some work. She was a bit overweight, and her clothes were strained at
the buttons. My friend and I, Wilowatty began, gesturing at Johnson, who bobbed his head in a faux bow,
are in the training program to be brokers at the brokerage firm of DuPuy and Winston. Part of our training
is to raise money for a charity.
He paused for breath, and the young woman said, Were not allowed to give money to charity. Only
the owner can do that.
I know that, said Wilowatty, and Im not asking for money. What Im asking is for you to consider
giving some money. If you fill out this form, all it says is that if and when they contact you, if you feel like
you might give some money, then you can give. If not, tell them no. It would really help us out. You know
how hard it is to get a job these days, and my friend and I are just back from Vietnam. He was wounded,
and its really hard for us to get jobs.
Whats the money for? both the women asked.
Its an organization that helps kids in Watts have better lives. He handed them both a trifold with
pictures of little black kids being fed and getting clothes. A lot of these kids are from families without
parents. They could really use your help, and all were asking is that you consider it, said Wilowatty, never
taking his eyes from the two women. The women looked at the brochure and then at each other. Johnson,
who had stayed silent this whole time, saw a small signal from one woman to the other, followed by a small
nod of agreement.
They took the forms Wilowatty had slid in front of them. Just fill out your name, address, and the
amount you think you might give. Most people have been pledging fifty, but twenty-five or anything would
be great.
They gave back the forms, and Wilowatty and Johnson thanked them and left. Wilowatty, theyre
never going to give any money. When the letter comes, theyll toss it, Johnson said. Besides, arent we
supposed to get money, not pledges?
 Who gives a fuck what they do? And no, we dont need actual money. All it says is to get money or
pledges. No one is going to give you money for some pissant charity in Watts. Most of these people are
afraid that theyre going to get burned out in the next riot. Theyll give a pledge to make us go away and
because they want to help, but not enough to part with actual cash. This way, they can help us without
giving any money. We get to meet our goals and look like heroes to that jerk Padgett and the rest. If you
dont hit the goal, guess whos going to be on the list to be fired?
But were doing this to help the charity, and we arent doing that if they dont get any money, Johnson
protested.
Look, dumb shit, if everyone raised the thousand, wed give them about a hundred grand, and DuPuy
and Winston looks like a hero. But we did all the work! By making us do this, they get us out of their hair
for a week and teach us a bit about sales. They deduct our salaries as charitable donations, and if we raise
the money, the firm gains all the recognition. You think they care how you make the goal? They could give
a shit. Were just expendable assholes to them, they get all the benefits. Fuck them! You think they care
about you? Youre just a cog in the wheel. The charity probably doesnt even know were doing this.
Johnson was shocked. His stability was threatened, because he thought Wilowatty was wrong about the
methods and the motivation, but deep down, there was a nagging feeling that maybe this overweight,
greasy-haired, smoke pot was right. He didnt know the name of the attitude, but hed learn later that it was
called cynicism, and it was an integral part of the brokerage community. He stood there with his head
pounding from the hangover and his brain spinning to make sense of what he was hearing.
The other thing, Johnson, is that you dont know how to close the sale, Wilowatty said. Close was
the sales term for asking for the order, and it was one of the things that the training team stressed constantly:
You have to close, and close all the time. The formula was that you closed five times in each sale process.
Now Johnson was getting mad. He was being criticized and told that he wasnt a good salesperson. I
close. Really I do, he told himself, just in a different way. He didnt ask anyone to give him the order; he
talked people into it. He presented the facts and the risks, and that should convince everyone that the best
option was to take the direction he was suggesting. After all, everyone was rational and all they needed
were facts, and when they had them, they would make the rational decision, which of course was the
decision he wanted. And here was this jerk, telling him that he had to ask for orders.
Hey, Phil, I know youre hung over, but we just raised two hundred dollars, so at that rate, all we need
to do is to get five more pledges and youre over the hump. You have two more days. We should be able to
get more money.
So, for the rest of the day, he and Wilowatty worked up and down the streets of Santa Monica. All that
time, Johnson kept wishing for either a beer, a cup of coffee, or some sleep, but he trudged along like a
dutiful slave as Wilowatty closed sale after sale. He was still too drunk to learn much. All he knew was
that, at the end of the day, Wilowatty had closed enough sales that Johnson, Gorka, and Dumonde had all
made their quotas. Back at the apartments, Wilowatty handed them their pledges and told them they were
all on their own, because he was going to the beach for the next two days.
Johnson was troubled by what had happened. He didnt know if it was because he didnt or couldnt
make the quota without help because he wasnt a good salesman, or because he hadnt raised the money
through his own efforts. It gnawed at him. In the end, he knew it was because he was competitive and hed
competed and lost, plus someone else had done his work for him. It was because he had been drunk again
and couldnt perform up to his own expectations. Hed failed, and he hated to fail. Damn it, he should be
the best salesman here. He churned on it all the rest of the afternoon and evening, and about 8:00 p.m., the
cramps and nausea started again, and then the diarrhea hit.
Despite being tired from the lack of sleep and his hangover, his mind wouldnt allow him to sleep. He
tossed and turned, and finally about midnight, he got up and went to the living room. He sat in the darkness,
alone with his thoughts and his anger. It got worse all night. Hed failed. Someone else had had to do his
work; he couldnt do it himself, and he was a failure. He decided to resign. Hed tell the training team he
hadnt done the work himself and that would be the end. Hed be out, and he deserved it. Damn, he didnt
belong here. He was no salesman! He wasnt anything. He was a waste. He couldnt stand the shame. Hed
dishonored himself by not doing his own work, and he couldnt stand it. His father would never understand.
 He got up from the couch, his arms and shoulders hurting, and he had a fixed look of anger on his face.
His lips compressed to a thin line, eyes focused straight ahead and narrowed, brow furrowed. He moved
through the darkened apartment to the closet. He opened the door and picked up a gray, locked, metal box.
He picked up his car keys and unlocked the box. Inside was a Colt M1911A1 .45-caliber pistol and two
seven-round magazines.
Hed chosen the dining table because there was a window and when he did it, the blood and stuff would
be easier to clean up than if he did it on the couch. He picked up a piece of paper and a pen, started to write
out a note about what had happened. As he wrote, his handwriting, never good, got worse and worse.
When the evil night had vanished like a witch across the moon, he was sound asleep with his head on
the tablet. The pistol lay on the open training manual. The oil he used to keep the weapon serviceable soaked
into the pages in an outline of the gun.
He woke up with a stiff neck and the lack of rest that comes from poor sleep. Luckily, he woke up
before Gorka, so he had time to cover up his stupidity. He put the pistol back and noticed a pile of check
stubs with Gorkas name on them. He looked at them and realized that his salary and Richs were the same.
Rich was always complaining about not having any money.
He slipped on a pair of pants and a sweatshirt and walked barefoot back to the living room. He lay
down on the couch and fell instantly asleep. Sometime later, he felt a hand pushing on his shoulder, and a
nasally, whining voice urged him to get up. Go away, Rich, or Ill rip your tongue out and use it to wipe
the floor before I shove it up your ass, he said in the mumble common to those half asleep.
Like a lot of people who believe themselves filled with honor and morals, he didnt do what he
perceived a moral person would do. In his estimation, he was supposed to resign and tell the staff what had
happened. But then Rich, Maurice, Wilowatty, and a couple of other guys would get fired. For the first time
in his new career, he decided to do nothing and compromise. It was something he didnt do easily and it
chewed at him, but over a few days, he grew comfortable with his decision and he let the fiction stand.
There was a conspiracy of silence. Theyd all shaded the truth, and no one was going to challenge it, so in
some perverted way it was OK.
A week later was the big party with Moody and his wife, Margo, and by then, the hangover had finally
passed.
The Coconut Grove was inside the Ambassador Hotel. The Grove was legendary in Hollywood history.
The Academy Award ceremony had been held there several times, and it was decorated with fake palm
trees from a silent movie starring Rudolph Valentino. According to legend, several famous actresses had
been discovered while dancing at the Grove. More recently, it had been the scene of the victory party for
Senator Robert Kennedy when he won the California primary. It was in a service hallway off the Grove
that Kennedy had been shot.
The Ambassador was long past its prime of the 1920s and 1930s when movie moguls and stars had
haunted the place, but it was still considered one of the best hotels in town. Johnson and a few others walked
up the long entranceway to the main doors. They were early, so they milled around until they heard some
noise off the lobby and saw Buford Haynes, Bob Holland and his wife Gwen, and Jerry Andrews. Andrews
looked up and said Hey, One-Shotor should I call you Jailbird?
Hey, Quasimodo, replied Johnson.
Whats this One-Shot stuff? asked Gwen.
There was silence for a minute, and Johnson turned and walked out into the lobby, leaving the question
hanging and unanswered.
He stalked across the lobby toward the huge French doors that led to the pool area. Even in the early
evening of the late fall, the sun was warm and the air pregnant with the smells of a city mercifully free of
the smog. A few guys there lounged in the gathering twilight, taking advantage of a time without
supervision to ditch their suit coats, roll up their sleeves, and drink beer served by a waitress who was a
tribute to breast enhancement. Another rotten day in paradise, he thought.
He walked around looking at the legendary cabanas and cottages where supposedly Marilyn Monroe
had had sex with JFK and where Howard Hughes had seduced Katherine Hepburn. Tonight, with the smog
gone and the shades of darkness setting in, a few stars were appearing low in the eastern sky. The bright
one low on the terminator was Venus, and there were others he couldnt identify. He wished hed spent
more time learning astronomy and the stars and made a commitment to study them.
He looked away from the stars and noticed that the accent lighting around the pool was on, and it was
time for the party. Theyd set up a table with name tags on it for all the students. He picked up his badge
and stuck it to the left breast of his suit. He wondered why everyone did that, since when you took
someones hand, it was with your right, and that directed the other persons eyes to your right breast.
There was a receiving line with a line of students and other employees waiting to shake hands and
mumble meaningless things that werent understood by either side. He turned the corner into the main
entrance of the Grove and was immediately entranced by the size and opulence of the place. It was
enormous and really cool, looking like something out of a tale of ancient Arabs and harems. He heard a
clearing of the throat, and there was Norm Padgett. Johnson gave him a handshake that was far in excess
of the usual receiving line wimp shake and stared him straight in the eye. They held the stare for a long,
pregnant minute, each sizing the other up in mutual dislike. Then the psychology of the stare down was
over, and each thought hed won.
There were several officers of the firm, including the legendary Mort Myerson, who had sold more
computers for IBM than anyone in the companys history. He was a greasy-looking short guy with very
bad skin and a Nixonian five oclock shadow. His deep, mellifluous voice rolled out like a blanket. The
tone was beautiful, and it carried far with perfect diction. Johnson was fascinated but couldnt tarry, as the
line was developing behind him. Next in line were Moody and Margo.
He introduced himself to Margo, welcoming her to LA, and she responded in a soft Texas accent that
was almost impossible to hear in the noise. Next was Moody, who was talking to someone from one of the
offices. Since the line had stopped, Johnson continued his difficult conversation with Margo. This is quite
the place, isnt it? he said.
Im kind of overwhelmed, said Margo. Im not one that goes to a lot of places like this. The bellman
said that our cottage used to be the one that Louis Mayer lived in, and before him, Charlie Chaplin.
Its a very famous place, he responded, and that was it. The line moved, and he was face to face with
Moody. Moody extended his hand, and Johnson reminded him of his name. To his surprise, Moody said,
Of course I remember you, Phil. Who could ever forget you? Johnson was embarrassed but pleased that
this great man remembered him. He welcomed him to LA and moved on to the main floor.
He went down the three stairs, imagining himself as Cary Grant in a white dinner jacket, catching the
admiring eyes of all the women. His grandeur was quickly dissipated by reality. The place was crowded
and noisy. There were clumps of three and four standing around, and he bet their members all worked in
the same office. Here and there were groups of trainees. Sometimes, the trainees were grouped around a
young woman. All had drinks. He walked over to one of the multiple bars and decided to have a gin and
tonic, which was a drink hed heard about and thought that it sounded sophisticated somehow.
The black bartender handed him the drink, and just as he was about to turn away, he was told, That
will be three-fifty, sir.
Johnson wheeled around. What? he said.
Mixed drinks are three-fifty, beer is two dollars, and wine is a buck, said the bartender. Did you
think this was free? He said, with a gold tooth gleaming in the front.
Johnson fumbled for his wallet and handed over a five. The bartender took the money and rang the
register and then put the remaining buck and a half in his tip jar. He looked straight at Johnson with a Come
on, white boy, say something attitude. Johnson walked off.
He moved around the perimeter, chatting with some guys engaging in crude jokes and comments. He
was standing with Bob Lyle, one of the few colleagues he knew from the afternoon class, when he heard a
laughand there she was: the girl from the bar in Marina del Rey.
She was standing in a group with two kind of cheap-looking blondes, one older and one a bit younger,
and three guys from the class. One of the guys was a jerk named Mike Sibley. Sibley was from Florida, had
been in the navy some years ago but got out and was living with his mother. He was one of those pretty
boys with a great tan and physique, so he looked good in his suit. He had a nice smile with good, large,
white teeth. He was too perfect, and Johnson, with his chipped lower teeth, his bad orthodonture, limp hair,
large nose, and generally round and fat-looking face, wanted to punch him to a bloody pulp, just because
The girls seemed to be enchanted with Sibley. Johnson moved over and said, I guess you dont
remember me. Her face fell as she realized that shed run into him again. I was one of the two guys who
bought you a drink at the Basement a month ago. You took our drink and then disappeared.
I was looking for better-looking guys. She delivered the insult with an innocent smile. The rest of the
group laughed at her shot. They all turned, expecting Johnson to walk away like a beaten dog, but he didnt.
There was a debate in his head for about two seconds between delivering a really nasty rejoinder, like,
I doubt there were any good-looking guys looking for you, or something on the moral high ground, like,
I understand, but you should have stuck around. Im a pretty fun guy. But it was neither of those. You
sure got the best of us with your response to our pickup line, he said.
She smiled and replied, Well, there arent too many professions where guys need to look like nerds
except the marines and DuPuy and Winston.
The conversation died out in the way forced conversations between people who have little in common
often do. Everyone chatted in their subgroups and said hello to people they knew. The girl whom he now
knew as Dianne was joined by her cheap-looking girlfriend. Dianne didnt introduce the other girl, but
Johnson could hear a southern accent that was as thick and slow as the water in a mangrove swamp. The
girl was jabbering excitedly in this almost incomprehensible way that, not for the last time, made him think
a southern accent sure made a person sound stupid. In the few words he could understand, he caught the
names Wilowatty and Martin.
Finally, she stopped, and Joe Kennedy, who had joined the group, turned and said, Phil, sounds like
Wilowatty and Martin are organizing a party on the roof and invited Bobette here and couple of the other
ladies over.
Johnson turned to Dianne. You want to come over after this for a few drinks on our roof garden?
Who else will be there? she asked, flashing a smile that would melt steel. Are you coming, Mike?
she said to Sibley. Johnson prayed that Sibley would be the wimpy mommas boy he was rumored to be,
and his prayer was answered when Sibley said, No, I have to get to bed early tonight. I have to call my
mom early tomorrow. Its her birthday.
Dianne and Bobette both oohed and aahed over Sibleys expression of filial love. It made Johnson sick.
The only thing that came to his mind was the line from the movie Psycho: Well, a boys best friend is his
mother. Sibley probably killed cats when he wasnt at home with Mommy.
OK, we can come over for a while. Then we have to get home so we can get some sleep before work
tomorrow. At that point, a very drunk middle-aged woman came up to Dianne with a slick-looking guy in
tow. Dianne got into a conversation with the woman and shook hands with the man. She made no attempt
to introduce them to the others. A bit rude, Johnson thought.
The party was starting to break up, and people were drifting off in various groups. He joined up with a
few of the guys, and they began to lead the group that was going to the after party out of the Grove. He
turned back to tell Dianne and her Southern friend he now knew as Bobette, that they were leaving, but she
was gone. Damn! That woman could disappear like a ghostfirst at the Basement, and now here. Oh, well.
Fuck it! he thought. He still had T. J.
 Chapter 12
The Skin Graft
After the Coconut Grove party and the charity, they were given an assignment to research a stock and to be
prepared to sell it to the class. They were told that the facilities of the various DuPuy and Winston offices
were available and they had two days to get ready. They were expected to do the research after class.
Johnson selected an oil-and-gas-drilling stock called Reading and Bates.
The next day, he and Gorka drove to their downtown LA office on Figueroa Street. They told the
receptionist who they were and their errand, and they were then introduced to the assistant manager of the
office. Johnson was still nave enough to think an assistant manager of a brokerage office with the lofty
title of vice-president was someone important.
As he was standing there, Dianne walked by and proceeded up the stairs. She was dressed in a miniskirt,
a tight sweater, and a pair of high-heeled, green shoes. The staircase had thirteen steps with no back to the
treads, so a person could look straight up through it. As Dianne got about three steps up, almost every man
in the vicinity stood up and looked in the direction of the stairs. Johnson followed their stares, and sure
enough, every time Dianne took a step, a lot of thigh was exposed, and what was exposed was beautiful.
Most importantly was that at stair nine, you could see right up her skirt. She seemed unaware of the show
and went about her business.
Youre not here to research our new accounts clerk, the manager said. Heres the material you need.
He pointed to some very large multicolored books lining a shelf. In a seeming example of serendipity, the
books were almost directly under the stairs, so as Dianne made her return trip, Johnson was treated to a real
show. He really liked what he saw.
They did their work, and as they were leaving, Dianne came out of the office she shared with a couple
of other women. You disappeared before we all left for the after party, said Johnson.
I had to talk to somebody from the office about a problem they were having, she replied, looking
down and to the lefta good sign she was lying, which was confirmed by her blushing.
Well, maybe well see each other again, he said.
I understand you guys are having a Thanksgiving party. At least, thats what the greasy-haired guy
said, referring, of course, to Wilowatty.
First Ive heard about it, replied Johnson. You know anything about that, Rich? Johnson felt an
impulse coming, and unlike his usual pattern of not acting impulsively, he gave in. He turned back to
Dianne. If were really going to have a party and we can invite others, do you think you might be interested
in coming?
I might.
How do I get a hold of you if were having the party?
My girlfriend Bobette gave her phone number to the guy you were with when we met at the Basement.
I dont have a phone. If you can have others, can I bring Bobette? Bobette was the cheap-looking blonde
who had been at the Ambassador the other night.
Phil fixed her with a steady stare. He was flummoxed. She seemed so forward, yet there was a reserve
about her. She was ready to come to a party with a bunch of horny, ex-military guys with no idea if shed
get turkey cooked the traditional way or from a can. So she followed the old pattern of bringing her
somewhat less-attractive girlfriend. Johnson thought, I guess she figures that if Bobette is going to get laid
anywhere, our group is the most likely to have a candidate for the position.
Later at the apartment, Johnson found out that Wilowatty and Martin were indeed planning a party, and
theyd invited most of the other students in the apartment building and a few from other places. Martin had
invited a guy from Houston who was here with his wife, one of those women who, when they walked by
groups of men, caused them to stop talking and stare. One of the less couth members of the class had
commented to her husband without knowing his relationship to the object of his lust that hed pay money
to see her dance with her clothes on, which had earned him a trip to the doctor to have his balls examined
after the husband kicked him.
 Johnson, the eternal planner who wanted no loose ends, began to figure the logistics of tables, plates,
silverware, and food. They came up with some interesting ideas. Carpano wanted rice with the rest of the
food, but they had no idea of how much to make. They could have simply asked Bob Daviss wife, Carol,
who lived one flight down, but being men and former officers, it wasnt in their makeup to ask for help.
Martin was convinced they needed a pound of rice per person; that would mean seventeen pounds.
Somehow, that seemed like a lot.
He found out the rationale of the rice. Wilowatty had assumed control of the turkey, and he figured a
twenty-five-pounder was the right size since they had seventeen people coming. He figured that since the
average person weighed about one-fifty, each would consume at least a pound of meat at a sitting. Sophistry
is never a pretty thing when carried to extremes.
In the end, Johnson short-circuited it all by making the call. He called his mother, who deferred to
his grandmother, who happened to be visiting. Grandmas response was, God help the country if this is
the way it military officers thought and acted. She then proceeded to give him a lecture about cooking
turkeys and rice. In the end, he didnt listen to most of it, but he did learn that a pound of rice per person
was a bit muchlike ten times too much.
For days before the big day, theyd been busy laying in food, turkey, dressing, cranberries, salad, rice,
potatoes, pumpkin pie (they went through about six of these before the big day), and all the other stuff of a
groaning board.
Everyone was up early on Thanksgiving. Bob Davis was the ice-and-beer man, so he hustled Wilowatty,
Martin, Johnson, Carpano, and Dumonde out of their bathrooms to fill the bathtubs with ice and beverages.
Wilowatty and Martins was filled with beer and wine for before dinner, Johnsons with wine and beer for
dinner (this was because the wine for dinner was actually in bottles with corks instead of screw tops) and
Carpanos was more beer. There ended up being six cases of beer, twenty-four bottles of wine, and two
each of scotch and bourbon. Who was going to drink it all was still a mystery.
Johnson cleared all the furniture out of his living room and dragged the dinette tables from the other
apartments into his. He arranged one long table that nearly went from wall to wall. He realized they had no
tablecloths, so he thought first of towels since many were different colors; they would be pretty. But he
tried it, and they were lumpy. In the end, he ripped the none-too-clean sheets off his and Gorkas beds and
covered the table. In all the apartments, there wasnt a single cloth napkin, so he went looking for good-
quality paper ones and struck out. With his options reduced, paper towels appeared.
He placed the dinner plates and silverware, remembering forks on the left, knife and spoon the right,
and glasses above the knife. He even remembered his waiter training and turned the blades of the knives
toward the plates. Theyd set the time to start eating at 6:00 p.m. with cocktails at 4:00 p.m., which meant
the turkey had to go in at noon, as it needed to cook for six hours. At this point the first crisis developed.
Martin came over and told him that Wilowatty had a question. Johnson walked next door and found
Wilowatty in the kitchen, the ever-present cigarette in his lips, a large bowl of dressing in hand, and the
gaping chasm of the turkeys rear staring up from the sink. Johnson, theres something wrong here. The
directions say that we should mix up two packages of stuffing mix with this other junk to stuff a twenty-
five-pound turkey, the smoke pot belched.
So, whats the problem?
I cant get it all in the fucking bird! I got almost half the stuffing left.
Did you fill the neck cavity also? You know, the one at the front of the bird?
Yeah, I been stuffing this thing like I was trying to get fourteen pounds of shit in a seven-pound bag,
and I cant get any more in.
Johnson looked at the turkey, brushing away some ashes stuck to the surface. He couldnt immediately
see any reason for the lack of room. He did remember that at home they usually had extra stuffingHe
looked away for a second, and then it hit him. Did you take the giblets out of the turkey?
What the fuck are giblets? came the smoke-clouded response.
Oh, fuck! Theyre the neck, liver, and stuff, and theyre inside the turkey. You use them to make
gravy.
 Wilowatty looked at him with uncomprehending eyes and then walked off. Johnson could hear him
rooting around in the bathtub for a beer. Johnson hefted the turkey out of the sink and realized it was ice-
cold on the bottom. He wondered if it was still frozen.
Hey, dumb shit! he yelled at Wilowatty, who was by this time peeing loudly. Johnson only hoped it
was into the toilet. Did you defrost the turkey before you started stuffing it?
How the fuck do I know? Martin bought it this morning, and it has been in the fridge since then, was
the reply over the continuing sound of urine splashing. The guy had a bladder like a tanker truck.
So, Martin had bought a frozen turkey. Johnson did know that thawing a turkey could be dangerous
and that trying to cook it frozen wouldnt work. He grabbed a big spoon and began to take the stuffing out
of the bird. Sure enough, the crunch of ice told him his worst fears were realized: he had hit the giblet bag.
Wilowatty, put the plug in the other sink and fill it with hot water, he said without looking and continued
to take the dressing out of the turkey.
When the water was run, he took the now-empty turkey and put it in the sink. He knew that you were
supposed to do this with cold or lukewarm water to prevent bacteria from growing, but he reasoned that
they were going to defrost it and cook it before the germs could grow. Keep the water in the sink hot until
when you reach inside, the bag comes out and theres no ice there. That will give you an excuse to drink.
Like you need an excuse.
Burrrrrb, was the reply.
Johnson went to his apartment and finished setting the table. A few other guys stopped by, mostly to
drink. T. J. wandered in, dressed in a very tight set of pants and a blouse she was barely wearing. Martin
was at the stove cooking something that smelled like rice, but with Martin, it could be anything. T. J.
shimmied over to give Martin some advice. Shed helped herself to some wine from the bathroom. He
looked at his watch and realized it was 10:30 a.m. She was starting already. When she started drinking
early, Johnson knew he was in for a rough and long night. He needed not to drink so he could keep up with
her.
Carpano came over, and he and T. J. went to his apartment on some errand. He walked the other way
to check on the two turkeysWilowatty and the frozen one. He realized that he really didnt need to worry
about the hot-water treatment. Wilowatty was drinking another beer and watching the Detroit Lions football
game on TV. The turkey was sitting in cold water.
He finally gave up, let the turkey sit, and watched the game with Wilowatty. The game was over about
1:00 p.m., and the turkey seemed to be thawed. OK, Wilowatty, the bird is ready, so take the giblets out
and stuff the fucking thing!
He walked around to the other apartments. Guy was asleep in the chair in his apartment with a football
game on. Maurice was snoring like a train in the bedroom. There was no food prepared that he could see.
In his apartment, he found T. J. asleep on his couch. In the next apartment, Wilowatty was still drunk
in front of the TV, the turkey unstuffed. He was furious that no one was doing his jobno food, no turkey.
Just a bunch of drunks. He decided to do it himself. It was easier than driving everyone else crazy. He
grabbed the turkey, ripped the giblets out, and started to stuff it, none too gently or hygienically. He grabbed
handfuls of dressing and shoved it in the bird, packing it tightly.
When he was done, he realized that the stuffing was bulging out of the end between the legs. That cant
be right, he thought, but he didnt know what to do. He looked at the other end of the bird and noticed some
skin where the neck had been. He grabbed a knife, sliced off the skin, and laid it over the dressing. He
looked around for something to secure the skin. He found nothing.
Then he remembered a sewing kit he had. He got it and threaded a needle with a long, brown piece of
thread. He tied a knot in the end and then started to stitch the skin to the bird. It wasnt pretty, but it worked.
He shoved the bird into the flimsy roasting pan and threw the entire mess in the oven.
He went back to his apartment to take a nap. As he entered, he noticed that T. J. was not where hed
left her, but shed only moved into the bedroom. She was lying asleep on the bed, her blouse untucked and
the top button of her pants open. He lay down on Gorkas bed, but the noise woke her up. She got up and
stretched and then came over and leaned over him. She was clearly horny, and she was soon straddling him
and kissing him. They had sex, and while they were getting it on, Maurice came to the apartment door,
looking for Guy. He shouted, and Johnson yelled back, Beat it!
It was 4:00 p.m. when Martin woke him up with the news that there was no food ready except that
Wilowatty had the turkey cooking. He got up slowly and wondered where T. J. had gotten to. He got around
to the other places, giving orders to get the rest of the food working. People were already arriving, and the
drinking had started.
There are three good things about drunks. Theyre less choosy about who they hook up with sexually,
giving ugly people a chance to get laid. Second, theyre usually so relaxed, they rarely get hurt if they fall
down or get into an accident. Finally, the drinks fill them up, suppressing their appetites.
As the group arrived, it was obvious its members had already been drinking and were in the mood for
more. They quickly clustered in the bathrooms and the hallways. After a few minutes, that unique separation
occurred: the women moved into Guy and Maurices apartment; the men stayed in his for a bit and then
moved to Wilowatty and Martins place to watch the second game.
He was running around the three apartments, checking on food and preparations. About 5:00 p.m.,
Dianne and her friend Bobette arrived and followed the noise to Wilowattys. Wilowatty was standing near
the breakfast bar, cigarette in hand and a beer in the otherthe same position hed been in for the whole
day.
Hows the salad youre making coming along, Vince? Johnson asked Martin, who was sitting at the
table, reading a magazine.
Fine. Im just waiting for Wilowatty to make the croutons, was the reply.
There was pregnant moment of silence, and then Bobette said in her best Monroe, Louisiana accent
(pronounced Mon Roe, with emphasis on the M, N, and Roe), Crouton? Crouton? What the hell is a
crouton? She bellowed this, following with a cackle that sounded like a laugh from a stereotypical witch.
Its toasted bread.
If its toast, why not just call it toast? she replied with another cackle. Wilowatty and Martin started
laughing, and as much as Johnson tried to control himself, he joined in. It was like a scene out of some
hillbilly movie. Dianne was laughing too, and it was obvious both women had been drinking.
The party moved on to more drinking and moving around. Others were arriving. A game of Hearts had
started in Guys apartment, and cigars and cigarettes were going. The women by this time were in his
apartment, talking. He was hustling back and forth, testing and tasting.
He noticed that T. J. wasnt with the other women or at the card game; neither were Dianne or Bobette.
He moved to the next apartment to check on the bird, and there were the three of them with Martin.
Wilowatty was passed out in a chair with a cigarette burning and a porno magazine open on his chest.
Bobette said, Hey, Phil, this is a cool party. Willo-whats-his-name was showing me Fuck Magazine
or whatever, and I learned what a crouton is. Another of her spine-chilling cackles.
About 6:00 p.m., he checked the bird, and the little red button thing had popped up like the nipple on a
squeezed tit to tell them the bird was done. He asked Martin to tell everyone to get their food and stuff and
get ready to eat. Then he realized he had another problem. Whoever had bought the turkey had gotten a
roasting pan that seemed to be made of aluminum foil, and it had bent and twisted with the cooking. There
was no way it was going to hold together long enough to get the bird from the oven to the counter or stove
top. He looked around for something to support the thing; there seemed to be nothing. He closed the oven
door and went next door to get help.
He came back with Bob Davis and Ernie Simiken, who lived in one of the other apartment buildings
and was a friend of Davis. They all looked around the kitchen and came to the same conclusion as
Johnsonthere was nothing there to help them. They talked, and finally, Davis had an idea. Lets get a
piece of cardboard to put under it, he said.
Where exactly are we going to get a piece of cardboard around here? Johnson asked.
Thats not a bad idea. Get something to support it, Simiken said, but cardboard is not going to do.
Lets use the other rack in the oven.
They looked at each other, and then Davis reached for the rack at the bottom of the oven and grabbed
it. The move was concluded by a howl of pain as the 350-degree heat contained in the steel burned into his
hand with the sizzle of a steak hitting a hot grill. Motherfucker, fucking motherfucker, fuck! Fuck! Fuck!
he screamed, dancing around the kitchen. Simiken grabbed Davis and forcefully stuck his hand in the sink,
running cold water over the already blazing-red lines etched in Daviss hand. The cold water helped, and
Davis stopped screaming while the water was running.
Ernie, take Davis to the bathroom and see what you can do. Ernie started to say something, but
Johnson cut him off. We have eighteen people in the other room, and I have to get the turkey out of the
oven.
The screaming had attracted Martin, Carpano, Daviss wife, and Joe Kennedy. Daviss wife went down
to their apartment to get some first-aid stuff, and Ernie had Daviss hand in the ice in the bathtub that was
keeping the booze cold. Davis and Ernie were both drinking beers. Some things never changed. Give a
couple of combat veterans five minutes to sit down, and theyll either go to sleep, find something to eat, or
find some alcohol.
Martin and Carpano used a towel to take the rack from the oven and held it while Johnson eased the
turkey from the oven, and then they moved it to the stove top. They finally got the turkey over to his
apartment, but it turned out they didnt have a serving platter, and no one had a carving set. Martin made
the decision to carve the thing on the stove top and serve directly to the plates.
Johnson solved the knife problem. In the closet where he kept his stolen .45, he had a very large Buck
knife that hed carried in Vietnam. It had a nine-inch hollow-ground blade and a black handle. It was razor
sharp and heavy, and it cut through the turkey with ease.
The party wound its way through dinner, which was surprisingly good, considering the method of
preparation. He hoped that no one would get food poisoning like the news media was always vaporing on
about. Everyone is drunk as lordsand that helps, he thought.
After dinner, some people left, but most moved to Carpanos apartment for more drinks and dancing.
Johnson stayed and helped clean up the mess, along with T. J. and Dianne. There was tension between
them, but Johnson was too insensitive to really take note of it or that it resulted from a competition between
two women after the same objecthim. One had the object, and the other wanted ita true recipe for
disaster.
Eventually, T. J., who by this time was very drunk, staggered into the other apartment, leaving him
with Dianne. Dianne increasingly took charge, giving Johnson directions and not listening to anything he
said. They finally got everything put away and moved to the other unit.
T. J. was dancing with Carpanoif what was happening was dancing and not sex in a vertical position.
T. J. had her arms linked around Guys neck and her head on his shoulder. Guy had one hand on her boob
and the other on her ass, and he was pressing her hips against his crotch. The stereo was playing Marvin
Gayes Lets Get It On, and Guy was making the song title come true.
Johnsons anger started to well up. The fucking bitch! Theyd had sex that afternoon, and here she was
with this douche-bag, getting it on right in front of everyone. Everyone knew he and T. J. were fucking, so
now he looked like a shithead. If he took Carpano on and they fought, they would get fired, but if he didnt,
hed look like a wuss in front of all his peers. The code of conduct said that there were four things that you
didnt fuck with: a mans woman, his food, his mail, and his toilet paper. Fuck, he finally hits it with this
bitch, and some shithead steals her! It was the story of his life. Some jerk was always stealing his girlfriends.
The rage was getting stronger. He needed a drink. He pushed his way into the bathroom and found a
half-full bottle of Cutty Sark scotch in the sink. He grabbed it, took the top off, and walked back to the
living room. T. J. and Guy had stopped dancing, and Guy was standing next to the entrance to the kitchen
with T. J. sitting slumped in a chair. Guys eyes were wide behind his glasses, and everyone else was
watching what was going to happen. Johnson reversed his hold on the neck of the bottle so the opening of
the neck was next to his little finger. From this hold, he could smash the thick part of the bottle to create a
standard bar-fight weapon.
Johnson had a couple of quirks with drinking. If he was mad and started to drink, he usually got mellow.
If, however, he was drinking and then got mad, he got very dangerous: the alcohol reduced his inhibitions
and increased his already high pain threshold, so hed attack his target with the speed and ferocity of a tiger.
The worst was if he was mad before he drank and the anger maintained its intensity. Those were the times
when people could die. He was in the second stage, and he was dangerous but not deadly. Nevertheless, he
would enter the fight as if it was a life-or-death matter.
The stereo was playing something, but no one was listening. In spite of the music, the room seemed
silent as the group watched and waited. For a second, no one moved. Then Johnson moved toward Carpano,
but Martin, realizing that no good was going to come from this, moved to break the tension. He jumped in
front of Johnson and grabbed him by the shoulders, saying, Phil, youll get fired. Are you ready to get
fired over this whore? Shes nothing. Give it up.
Johnson started to shrug him off and go for Carpano, but Vince was strong, and he held on. Johnson
felt the anger starting to leave, and he turned on his heel and walked out to his own apartment as Martin
said, Its over, folks. Have a drink and lets get back to dancing.
Johnson sat in his apartment for an hour, drinking and fuming, and the anger cooled more. Finally, he
got up and walked over to Carpanos place. Guy and T. J. had left, and several people came up to tell him
what a shithead Carpano was for what hed done. He danced with Dianne a few times. He was never a
dancer, but the booze made him give up his inhibitions, and he demonstrated one of the unfailing rules of
dancingthe more a white man moved his arms, the more he looked like a dork.
At some point, it started to rain hard. It came straight down, unhampered by wind. It was like a sheet
of glistening prisms pounding down on the pavement below and bouncing off the roof of the house next
door. As the drops hit the ground, they picked up light from the street lights, the house and car lights
changing their color from white and silver to a bluish tint as they bounced and caromed into the gutters.
Dianne was standing alone, looking out the window at the rain. Johnson walked over and, emboldened
by his loss of T. J. and the booze, placed his hand on the small of her back. Hed expected that shed jump
at this overfamiliarity, but instead she moaned softly and leaned back into his left shoulder.
Hi, he said, in the deep, bass voice hed had since he was twelve. At the sound, she stiffened and
bolted upright, pulling away and turning toward him. Oh, she said, confused and taken aback, are you
over being mad? Just like that, the mood was broken, and she was back to being rational and aggressive.
He walked away to the kitchen and started to clean up the mess and sort out the silverware, dishes, and
glasses for each apartment. He knew that Gorka would be counting everything when he got back.
Bobette had disappeared awhile before, and now she returned. She and Dianne said they were leaving.
Johnson handed them their jackets and purses. He walked over, grabbed an umbrella, and walked with them
to their car. He noticed that Dianne was carrying a book, and when she got in the car, she tossed it in the
backseat. Johnson realized that it was his bookThe Onion Fields, by Joseph Wambaugh.
Thats my book, Johnson said. When will I get it back?
When Im done reading it, was the smartass answer that begged for a riposte. But he pulled his punch
and said nothing. Dianne started her yellow Ford Pinto and drove off.
 Chapter 13
The First Failure
The DuPuy and Winston training class was due to graduate at the end of January. So, with the passage of
Thanksgiving, about eight weeks of training were left. Assuming they passed all their tests, they would be
on their way to their offices shortly thereafter.
There were two more weeks before they took the Series 7 registration test for the New York Stock
Exchange and the test for the National Association of Securities Dealers, known as NASDAQ. They also
had a number of critical classes and the all-important interview with their office managers, who still had
final say on whether they got hired.
Tension was thick. People were leaving every day, either quitting or being fired. The one that really
rippled through the classes was when David Hodges was fired for what was called moral turpitudewhich,
in this case, meant that he was sleeping with a woman not his wife. The fact that the woman in question
was Charlene, Norm Padgetts hot, redhead secretary, made it more exciting. Charlene lived in the same
building as Johnson. Charlene wasnt fired, to the relief of all the guys who enjoyed watching her move
around the hallways.
When Hodges was fired, Johnson, Carpano, and a number of the unaccompanied married men were
really worried that they might be next. The night after Hodgess firing, a group of them were in the Mouse
Trap, Hodges and Charlene had been very discreet. They never had sex in either his or Charlenes
apartment. There were only about five people who knew about the relationship. As the beer and whiskey
sank in, it was determined that someone must have ratted them out. The odds-on favorite was Kristen, one
of the two women in the class. Johnson had his own ideas, which he kept to himself. Hed suspected for
some time that the staff was spying on them. There was just too much stuff that was discussed in the privacy
of the apartment that found its way back to the staff.
The next night, Gorka and the others went to a movie, and Johnson got to work. He disassembled the
phone, looking for signs that it had been tampered with. He moved on to the kitchen and finally the
bathroom, where he disassembled the shower head and looked in the toilet tank. Then he looked at the
lamps and the other lights. He found nothing. Since he couldnt find any electronic surveillance devices, he
was sure there must be one or more moles in the class.
In the meantime, life went on. It was like officers candidate school: guys quit and were dismissed
during the entire six months; you grieved for a couple of days, and then you forgot who the departed were.
Dealing with people being transferred or killed during his army career had been good training for this,
although he didnt know it was also good training for the brokerage industry itself. At the moment, it just
seemed cruel.
The Series 7 is a comprehensive test covering all the various aspects of the securities business. It was
a six-hour test, and the whole class would take it at the same time. It was a very complex, and the new
electronic calculators were banned. The first-time failure rate was about 60 percent, so they were allowed
three tries to pass it. To prepare, the class would take what the staff said was the best preparation test in the
industry. They were told that if they passed the prep test and then failed the real test, they would be fired.
One of the guys asked the obvious question: if the exchange gave candidates three tries, why did DuPuy
and Winston enforce a one-try rule? There was twittering at the question, but the next day, the guy was
gone.
These two tests were the big deal, the whole reason they were there. If they passed and then got fired
or the firm went belly-up, they had their licenses and could work at any firm that would hire them. They all
got together and started to cram for the prep test. All the other classes were ignored, and most everyone
took test material with them to class and studied. The parties stopped, as did most of the drinking. It was so
bad that the owner of the Mouse Trap sent two of his waitresses, clad in low-neckline, diaphanous blouses,
over to the training center to try to drum up business.
They crammed and crammed, and they started playing games like asking each other questions as they
passed on the street and in the training center. Gorka wrote out questions on cards and carried them around.
Wilowatty seemed never to study, but everyone else was manic. It was the most intense time in the course,
and Johnson knew that when it was over, there would be a letdown of monumental caliber. He felt
comfortable with what he knew, but he still studied and asked and answered questions like the rest. He
passed the prep exam.
The day of the real test arrived, and everyone trooped to the center at 9:00 a.m. and was assigned a
number that corresponded to the test booklet he or she would work from. There were proctors everywhere
not only the D&W staff, but guys from the Exchange who all looked like clones of one another. They stood
out from the D&W staff. One was wearing a blue shirt and, horrors of horrors, a sport coat!
The test was in two parts with a break between them. The first part focused on rules and regulations,
legal, and compliance. Some of the situations posed were tricky and some silly. Johnson had his game face
on and was in the zone for the test. He worked through the questions quickly, since he read quickly. He
finished the questions before a lot of others, and he sat there for a few minutes. Then he reopened the book
and reviewed the questions. He changed a few answers and then closed the book. The rules said he had to
stay there until the proctor called for a first closing.
He left at the first closing, feeling good. Outside, as he waited to cross Wilshire, he took a look at his
surroundings. It was one of those days of watery sunlight when the rays of sun seemed to bounce off the
smog, fracturing to the point it hurt the eyes. On days like this, he realized why Los Angelinos all wore
sunglasses. The west wind drove the smog around the edges of the buildings, where it curled like a living
being. It was yellow, tinged with white and gray, and appeared to be heavier than air as it sank to the ground.
God, he thought, Ive been breathing that every day.
He went to the apartment, changed clothes, and took a nap, the fatigue of the days of tension and
cramming finally starting to tell. The rest of the guys rolled in later, and most of them also took naps. It was
quiet that nightno big parties like the post commodity bash.
There were some discussions of the test, and as the talk rolled on, Johnson began to get a sinking feeling
that he hadnt done so well. But he wasnt going to let the other guys know he was worried. He started to
review the material, and his ill feeling grew by the minute. As he got ready for bed, he was really worried.
If he failed, with his record, they would fire him; he might not get the chance to take the test again. Theyd
fired people who had done poorly on other tests and tasks; why not after this one? He lay in the dark,
listening to Gorkas snores and the swishing song of rubber tires on the pavement. Sleep, despite his
exhaustion, wouldnt come.
The next morning, he woke from what had been a short and unrestful sleep. The trainees wouldnt know
the results of the test for several days, and in the meantime, they had to start the preparation for the
NASDAQ test. He grew more and more convinced that hed blown the Series 7 and grew more and more
morose and depressed as the days passed. He was tired, exhausted, worried, depressed, and soberand that
made him short-tempered. His mouth ran with vitriol.
He savaged Gorka at breakfast over some stupid remark. The others decided to rib Johnson as a way to
joke him out of his mood. He snapped and told them to fuck off, and that made the matter worse, because
then he felt rotten for getting mad at his friends.
Still feeling angry after several days, he stormed into the training center and was stopped by Bill Arthur,
who was the testing and certification director. Johnson, we need to talknow! At that remark, Johnson
knew it was over. He knew hed failed, and they were going to fire him. He hung his head and followed
Arthur to into his office. Phil, you were one of those who failed the test, Arthur said with no preamble.
Youre going to have to take it over, and were going to have to sandwich it in between the NASDAQ, the
elephant hunt, and graduation, so youre going to have to study hard.
You mean theyre not going to fire me? Johnson asked.
Norm and the others wanted to fire everyone who failed to satisfy Moodys quota, but they cant. They
have to give you another chance. They have too much invested in you guys to let you go. Im going to run
a tutoring class, and well get you through. Just between you and me, Norm failed the first time, and that
douche-bag brother of his took it three times.
Johnson left as three or four others were headed in to Arthurs office. Among them were Bob Holland
and Stuart Mellman.
 The jungle telegraph was working. By the time he got up the stairs to class, everyone seemed to know
hed failed. He was embarrassed and getting madderhe didnt know at what, but he was mad. He sat
down next to Kristen, the potential mole. She flicked a note at him that said, Hear you failed. It was nice
knowing you. He gave her the finger, which in 1973 was an act of incredible obscenity. It didnt go
unnoticed, and there was a ripple of giggles.
 Chapter 14
Once or Twice into the Breach
There was a particular way that terrible events filtered through him. When he was first given bad news,
there was a sinking feeling and a cold, muck sweat that threw him into depression. As time passed, he began
to grab for anything that would absolve him of the full responsibility for being involved. They were usually
things that werent true but convenient, almost conspiratorial: the test was biased, the tester made mistakes,
the always-present but unseen they wanted so many to fail to maintain the averages and hence encouraged
fear of the test.
Then there came the full acceptance of what had happened. It actually went beyond full acceptance. He
accepted the fault of others in some vain attempt to make them feel better. He held himself to standards that
specialists in many areas would consider impossibly high. He could never fully accept that he hadnt been
a legendarily good pilot. He had been good, but not as good as hed expected of himself. It made no
difference that no one else had had criticisms of his flying; he was unsatisfied, and that drove him crazy.
It was the same with the brokerage training. He wasnt the top in the class as measured by the tests. He
often didnt know the answers and was frequently told that his sales presentations were poor. Regardless of
the situational morality that allowed him to claim success on the charity drive, he knew that he hadnt
succeeded on his own. He had needed help, and hed had to lie to succeed.
Johnson didnt know if he had been more hurt by the need for help or his willingness to go along with
the deception. Now hed failed the first shot at the test, and hed expectedno, demandedof himself that
he pass on the first try.
As the realization that hed failed himself yet again set in, the depression began, and with it came anger
directed at himself. The anger bounded and rebounded, and he blamed himself more and more. Each
persons self-talk can provide rationalization for exotic events and self-justification against false accusation:
strength to deal with lifes challenges The dialogue can also be a powerful force in ones self-destructive
mannera person talks him or herself into greater and greater anger, more and more self-doubt, and finally
to self-hatred.
For the next few days, as he and others who had failed took remedial courseswhich, in the invariably
cruel way of male societies, became known as Bonehead Uhe began to imagine, as was his way, that
every time someone laughed, it was directed at him, that everyone was looking at him funny as if to label
him loser, failure, bonehead. In fact, a few of those who were truly cruel, not merely cruel to be funny,
actually used those terms. One fellow used the term so often around Johnson that one day, in what must
have been divine intervention, this cruel one managed to fall down several flights of stairsincluding
around the landings. He claimed that hed been tripped, but no one could identify the attacker in spite of
the evidence in support of the tripping theory in the form of footprints on his backside.
The boneheads from the morning section took remedial classes in the afternoon, and the afternoon guys
in the morning, for two weeks. On the Friday of the second week, they were told they would all be retested
the following Monday. Johnson was ready. He knew the stuff cold. He could answer questions on all the
subjects. He even impressed Bill Arthur by knowing the differences between orders on the floor of the
exchange with precedence, priority, and parity, and when those terms applied. Hed dug himself in for a
long weekend of study when Jacob Blum, a broker in the Beverly Hills office who had offered to coach
him, called. Blum was a godsend. He had been in the business since 1928 and had seen everything. He was
a fountain of acerbic wit, humor, and priceless knowledge. Phil, he began with his booming voice
Christ! thought Johnson, hes about a hundred and fifty years old, and hes so loud he doesnt need a phone
to be heard across townI understand that youre going to take the test again on Monday. It was a
statement, not a question. Are you ready?
I think so, Jake, said Johnson.
Take your thinking and shove it up your ass! bellowed Blum. You dont think about this test! You
fill your pointy head with the useless crap the exchange puts out, and then you vomit it back on the answer
form. You think youre ever going to be in a situation where you have to flip a coin with some broker on
the floor of the New York Exchange to determine if your order gets filled? No, you wont. He paused for
breath. Johnson knew not to speak; Jake was just getting lathered up. Do you know the information? Yes
or no?
Yes, Johnson replied with some actual conviction in his voice. I took your advice and memorized
all the stuff you told me to, and Ive worked the problems again and again, so I know it. But I was going to
spend the weekend reviewing.
Bullshit! boomed the Yiddish-tinged voice. You go out and get yourself laid, you hear me? What
about that babe you were hanging out with from the LA office? She looks like a good time. Johnson was
embarrassed. He knew that Blum sat in a bullpen and his voice carried all over the office, and here he was,
advising a trainee to get laid. Listen, pal, you can overtrain for a test just like you can over train for a race.
You need to relax and go in there Monday fresh. If you work all weekend, youll just find stuff that will
confuse you. I have a simple ruleI give this business all I can five days a week, but weekends and holidays
are sacred. If I have to work those days, this is not a worthwhile business. You take my advice. Go get laid.
A little loving will do you some good, even if you have to pay for it. Dont get drunk, just get laid.
OK, Jake, I wont review at all until Sunday night, and Ill try to get laid, but Ive never been all that
successful just picking up girls.
Listen, schmuck, get laid even if you have to pay for it. If you want, Ill call a contact of mine at the
Beverly Hilton who can set you up.
Johnsons mind raced. Oh my God, if we both dont get fired for this, it will be a miracle! Hes pimping
for some bellhop. This has got to be illegal! OK, Jake, Ill let you know. Thanks for calling.
Blum hung up without another bellowing response.
Johnson thought about where he could get laid. T. J. and Carpano were going at it like rabbits, and if
he hadnt seen the scars from the hysterectomy, hed have been worried that children were on the way.
There were a few slatternly looking women who hung out at the Mouse Trap, but he was worried about
them because he had a nearly mortal fear of clap. He wasnt sure that he was really over the case hed gotten
in Nam.
For some reason, Johnson settled on calling the smartass Dianne and asking her out to dinner. Dianne
didnt have a phone, so he called Bobette, and the Bayou Princess went and got the smartass. He started off
apologizing for calling so late to ask for a date. You probably have plans for tonight, but I wondered if
youd like to go to dinner.
Do you always start off a conversation with an apology and in a negative tone? Dont they teach you
not to do that in broker school? If youre asking me out, yes, I can go out. See you in an hour. The phone
went dead.
He stood there staring at the silent receiver, wondering what hed gotten himself into with this broad.
She was bossy, sassy, a smartass, and rude, but he was drawn to her for some reason he was unable to
fathom. Perhaps it was the mental challenge of trying to keep up with her, or the unpredictable nature of
her conversation, or perhaps the desire to knock the rough edges off her. In any case, he put down the phone
and headed for the shower.
A bit over an hour later, Dianne and he were getting on the Santa Monica Freeway, which in LA is
called the 10. He and the guys had discovered a restaurant tucked on the east side of the 405 just after
you exited from the 10. The place was called Victoria Station, and it was a collection of old railroad cars
decorated with faux signs from English railroads. It was about a twenty-minute drive from Diannes
apartment.
As they moved into traffic and headed west, they made small talk until they got near the exit for
Robertson Boulevard, and Johnson had to navigate the unexpectedly heavy traffic. So, what do you look
for in a woman? was her opening gambit. To say it was a surprise was an understatement.
He almost swung the car into the next lane before he recovered and sputtered, Hey, Im supposed to
ask that question.
Who says? she shot back. Johnson had no ready reply. He was at a loss for words, and Dianne made
him feel even more uncertain by laughing at his distress. So, what is it?
 I guess Ive never given it a lot of thought. I havent had many dates, so I dont really know. I guess
Id like someone who I can talk to on the same level and who likes to have fun.
Thats it? How will you know if you find the right one? She probed.
Well, I guess Ill just knowI guess, was his reply. He was spared himself further answers by making
the turn off the 10 to the 405 and then getting off at the first exit.
Ive never been here before. Theres a bar I go to called the Oar House all the time. With the noise
of the car and wind, the Oar House was said like someone was dropping her hs, so it sounded like the
Whorehouse.
You make much money there? he shot, glad for an opportunity to bat one at her head.
What does that mean? she fired back. What are you talking about? I dont go there for money. Its
a dance place. She was pissed off at what he thought was a rather clever remark.
He had a ready way to get out of these situations. You know that I was in the army in the artillery, so
I have some hearing loss, and with the noise of the car and the loss of hearing, I thought you said
whorehouse, he said quickly.
She didnt buy it. Even if thats true, to ask me how much I make there is telling me Im a whore.
OK, look, Im sorry. I was trying to be funny, and it didnt work. Lets start over, OK?
The dinner was good but not great. It was overabundant, like all of California. He had the smallest
prime rib, and when it arrived, Dianne looked at it and said, Thats a lot of meat!
Yeah, he replied, they have a rule here: one cow, one customer. There are actually two cuts larger
than this. Wilowatty always has the giant one. They have special plates, its so big.
Hes a pig.
Hes a good guy. He helped a lot of us get through the charity project, and he has been good at keeping
up morale and providing comic relief.
Hes a pig.
He wasnt going to bite on this one, because it was one of those comments that you could be a loser
with any answer. She wasnt asking for an opinion as much as she was giving one. If it was an opinion
formed after her brief acquaintance, it was based on emotion, not fact, and therefore it wasnt amenable to
logical, fact-based discussion. To counter the opinion, however wrong, was to risk a further argument and
not a discussion of merits, and the winner of that would be the person with the strongest emotional biases.
Then there was the issue of loyalty. The communal nature of the armed services places a premium on
loyaltyloyalty to country, to fellow members, to the service, and finally, to those you lead. It was a trait
pounded into a service members head: from the day you took the enlistment oath to the day you left. Like
blood is made up of plasma and red and white blood cells, loyalty in the service rested on shared sacrifice,
duty, and honor. It didnt go away. The sense of loyalty was probably the greatest gift the military gave to
those who passed through its ranks.
Johnson was loyal to Wilowatty because of the help hed received in the charity event, without which
he was sure that he wouldve been expelled. He was loyal because Wilowatty had been loyal to him, and
surely that deserved reciprocation. He was loyal because Wilowatty was there along with the rest of them.
If he didnt defend his friend, Dianne would think him disloyal and a wimp. This could be a trap to see how
he responded. Dianne was attacking Wilowatty without basis, and Johnson was going to have to defend
him unless he found a way to defuse the situation. He was miserable at the highbrow verbal sparring some
engaged inhe just went straight at things. He fought his drive at this point and asked, Why is he such a
pig?
The words were no more out of his mouth than she responded. Shed been waiting for the question
almost as if shed rehearsed the answer. He smokes. Hes a drunk, a slob, he swears too much, doesnt
care what others think, and he reads porno magazines.
OK, if you take the first four or five things that applies to almost all of us. We all drink too much.
Theres a lot of smoking. The slob part is him, and I think its sort of made up. Swearing is a way of life in
the service, and, from what I hear, is a fact of life on Wall Street. As far as not caring, I think thats wrong.
I think hes more sensitive than he lets on. That leaves porno, which I also find disgusting.
 My dad is a cop, as is my brother and my uncle. And they all smoke and drink too much, and it makes
them act like asses. Booze makes a person act like that of an animal. Cigarette smoke stinks, and Im very
allergic to it.
Up to this point, hed not been aware of any unusual speech patterns, but her construction of the phrase
act like that of an animal was definitely different and somewhat inchoate, and it made her sound like an
idiot. What about swearing and not caring?
I work around men all day and they swear, but I have told them all that they cant use the Lords name
in vain around me or say fuck. I just wont take it!
Johnson pondered for a moment and realized he might be pushing the edge, but he blundered on. How
do you control what others say around you?
I just dont allow it, thats all, was the response between bits of baked potato. I just walk away from
the person.
So you allow the other person to modify your behavior because of their language?
Im not doing that. I just wont take it. Its like a clean, white sheet with a single black spot on it. All
you see is the black spot, not the clean sheet.
Johnsons brain felt like there was something wrong. The mental process he was going through to
follow the conversation suddenly ran up against a brick wall of nonsense, and the lattice pattern of
interconnecting neurons shattered. Every synapse of his brain was firing, trying to find a way to reach some
point in his conscious or subconscious mind that could connect with what shed said so he could extract a
drop of meaning. It failed.
He had no idea of the meaning of what shed just said or how the parable of the black spot on the white
sheet applied to a discussion of induced behavior modification, but there it was. His brain wouldnt accept
that the assertions were based on sheer lack of education or understanding. He just knew that what shed
said had to have some meaning that wasnt clear to him, but he wasnt going to admit to her that he didnt
understand her by asking for a clarification. So he let the comment pass.
They finished dinner at about 9:30 p.m., drove down to the Santa Monica Pier, and walked out amid
the garishness, noise, vice, and trash. The pier used to be a nice, fun, safe place, but in the last few years, it
had grown seedy and uncared for. It still attracted large groups of mostly teenagers looking for excitement.
That done, they traveled back to her apartment. In the short hallway that led to her door, they said good
night, and that awkward moment came when the question of the kiss arose. She seemed to expect it, and he
wanted to. He overcame his indecision and fear of rejection with bold action. He leaned into her and kissed
her hard.
Her reaction surprised him. She kissed back passionately and fully, with open mouth and a hint of
tongue. It was a good kiss and one that held the promise of more and better ones. They hugged and held lip
contact, a magic moment longer than a friendly kiss, just long enough to make it a romantic one. As they
broke, she turned and put the key in the door. He blurted out, You know that question you asked me about
what I looked for in a woman? Well, when you go inside, look in the mirror. He turned and walked away
before she could utter some smartass remark and ruin the effect.
He still hadnt fulfilled Jakes command that he get laid. Johnson thought about calling the contact at
the hotel, but he chickened out and drove home. Up in the apartment, he discovered that Rich and one of
his buddies had gone to visit the other guys ex-brother-in-law who was a Marine at Camp Pendleton, and
they would be gone for the weekend. Carpano and T. J. were down in her apartment, Wilowatty was off
someplace, but Martin was there and Dumonde, Carpanos roommate.
Johnson was sitting on the couch, reading a book, and like always, when any of them was home, the
door was open. He noticed two women walk down the hall: one sort-of-overweight dishwater blonde and
the other tall, with black hair. They passed, and he ignored them.
He was engrossed in the pages of the novel when there was a soft knock on the door. He looked up to
see the dark-haired woman standing there alone with a large mug of some red liquid in her hands. Hi. I
was looking for Guy, and hes not there. Do you know where he is?
Immediately, Johnson was on the horns of the horny mans dilemma. Here was a woman who, judging
from her speech, had sucked down several mugs of the red liquidor was at least tipsy. She was alone in
an apartment full of horny guys, and her companion of a few minutes before was gone. That sort of indicated
that she was on the prowl. Then there was the manner of dress.
Later in life, hed go through a considerable thought process about how women dressed and what that
meant as far as permissions or invitations. For now, his immature thought process said that a girl in a filmy
red-patterned blouse, open to her navel and showing ample amounts of breast encased in a black bra, over
tight, red jeans that wrinkled in the crotch seemed an invitation to more than answering a question.
He sat up and invited her in. I think Guy is out someplace, Im not sure where. You could ask his
roommate, Maurice, next door. Shed sashayed into the room and sat on opposite end of the couch. She
put the mug on the coffee table. The unbuttoned blouse did its job, gaping open and exposing a boob lying
in its black wrapping. His pants were wrinkled from swiveling around, and now they got uncomfortable
from the pressure of his hard-on. She had an expression on her face that indicated she was fully aware of
the effect of her display. Whats in the mug? he asked.
Wine. Have some. He picked up the mug and took a taste of what had to be the worst wine in the
world. She must have gotten it from the bum at the Ambassador. He resolved the horny mans dilemma
or his penis did. He moved over next to her, put his arm around her shoulders, pulled her to him, and kissed
her. Her response wasnt excitement, but it wasnt rejection; it was almost disinterest. They broke the kiss,
and she looked for more wine.
He moved in again and kissed her, and this time his left hand went directly inside her shirt and bra to
the breast. Some response, but no indication that he should stop. He continued to fondle breast and felt the
nipple respond to the touch. She was warming up. He broke the kiss and looked at her. There was no
indication of any desire to stop, so he jammed his hand down into the V formed by her thighs. Legs opened
willingly, so he rubbed more, and there was more response.
What the fuck? He thought. It cant be this easy. Broad just walks in and wants to get laid? That does
not happen to mebut it is. She looked at him with the sort of unfocused eye common to the drunk. He
stood up and pulled her up, and she came up and into him. They kissed again, and she flexed her hips against
his hard-on, moving them left and right.
He took her by the hand and led her to the bedroom. He started to unbutton the remaining two buttons
of the blouse, but she pushed his hands away and pulled it out of her pants and over her hand onto Gorkas
bed in one practiced motion. He was working on the two-inch-wide belt to her pants as she unhooked the
bra. Belt undone, he worked her tight pants down over her hips, and she started to step out of them. That
was followed by him pushing her black panties down, and she was naked.
Shed been working on his belt and had it undone, and while they kissed worked his pants and
underwear, using her foot to push them to the ground. No sooner were they on the floor than she joined
them on her knees and took his dick in her mouth. Her left hand reached up and started to stroke his balls.
He let out a moan of pleasure and realized this couldnt go on long before he came in her mouth.
He took her shoulders and lifted her up, moving her to the bed. He tried to cram his penis inside but
missed, so she reached down and guided him in, arching her back and moving her hips up to his. Then they
began that eternal dance, continuing it for a long time. There was no reaction from her, no moaning, no
heavy breathing, no digging nails into his back, just a rhythmic reaction to his thrusts. Eventually, he felt
himself starting to get tired; he hadnt come yet. He just knew that he couldnt continue for much longer.
Finally, his energy failed, and he collapsed unfulfilled.
He tried several more times as his energy recuperated, and finally he started to go into the terminal
motion of coming. She started to respond like she wanted to get it over with, which she probably did.
Finally, he came and collapsed like a wet fish to one side of her and lay there gasping for breath. She just
lay thereno words, no talking, no comments. Finally, he heard the sounds of someone in the hall talking
and realized it was Maurice and the other woman, looking for his bed partner.
He got up and said, Your friend is looking for you, so I guess you have to go. Besides, if you stay here
any longer, I might lose control and rape you, he added in a humorous tone of voice.
You mean like you just did?
A chill ran up his spine that wasnt just the effect of sweat drying on his back. What if this was a setup
and she was going to report this to her family? That might mean some goon brother coming to beat the crap
out of him. What if she went to the cops? That would be jail, and since he was already a felon, it would go
hard on him. Oh, for Gods sake! She might know he worked for DuPuy and Winston and threaten to report
it, and that would be the end of things. What a dope hed been, led around by his dickand now he was in
the trap of being blackmailed. Fuck!
She was up and dressed and headed for the door without another word. He realized three thingsor
more than threeinstantly. He hadnt used a rubber, so he could get clap or get her pregnant. He didnt
even know her name, not even her first name. And hed never really gotten a good look at her face or body.
Theyd gone into suck-face almost immediately, and the bedroom was dark.
Shed gone to Maurice and Guys apartment after leaving his, and he headed for Martin and
Wilowattys. Martin was there reading a book, and after he offered Johnson a beer, he got up to see who
was in the hall, as he could hear voices coming toward them. The two women passed, and he could see the
girlfriend was somewhat overweight. His recent semen depository was thinner, but she was talking about
him and their session. Good evening, ladies, said Vince in a pleasant tone and then turned to Johnson
with an expression of disgust on his face that eloquently expressed his low opinion of the beauty of the two.
After theyd turned the corner toward the elevator, he turned to Johnson. Boy, old Maurice must have
had himself a three-way. I didnt know that Canuck frog had it in him. Of course, those two were so ugly,
their parents had to tie a steak around their necks to get the dog to play with them. Johnson said nothing,
letting Vince think what he wanted about the frog. After he finished his beer, he realized it was midnight,
and he went back to his place and stripped the sheets off his bed, rolled himself in his blanket, and went to
sleep.
For years, reveille had blown in his head at 5:00 a.m. regardless of when he went to bed, and unless he
was in a condition of extreme drunkenness, he woke up a 5:00 a.m. One of the things hed developed over
the years in the service was the ability to wake up completely, no grogginess or stuff, and be fully awake
and ready to go in an instant. He woke up to Gorka snoring, the room dark, and him covered in sweat that
the artificial fibers in the blanket wouldnt soak up. He pulled the cover off to allow the air in, and as he
cooled down, he dropped back to sleep. He finally woke up at 7:00 a.m. and got up, dressed in workout
clothes, and went out for a run after first checking to see if there were any sores on his dick.
Later, they all lay around watching football, drinking, and bullshitting until about four when the phone
rang in Johnsons apartment. It was Dianne. I was wondering if you would like to come over to my place
for dinner tonight. Im making chicken.
Sure, was his delighted response. Hed been convinced he might never see her again since hed
imagined that the Friday-night date had been a disaster. What time? And can I bring anything? He was
told to just bring himself and to be there at 7:00 p.m. He hung up happy. This was most unlike his life: three
dates in two days, and getting laid to boot. Maybe things were looking up.
He drove over to Diannes apartment on Normandie behind the Ambassador and found a parking place
nearby. As was his habit, he arrived at exactly the appointed time. Dianne ushered him into her small studio
apartment, which he realized for the first time was at street level. What she was cooking smelled less than
tantalizing. Whatever, he thought.
It turned out that somewhere along the line, Dianne had been unsuccessful in her cooking and Bobette
had been called in as a rescuer. Bobettes idea of cooking was to mix everything with rice to make it a
gumbo, so he found himself faced with a large pile of white rice with vegetables and some other stuff in it.
It tasted worse than it looked. That wasnt exactly right; it had no taste. Well, it was bland but very salty.
Luckily, there was wine to wash the mess down. Even with plenty of liquid, it lay in his stomach like a
rock.
After theyd choked down the mess, they went to the living room and were sitting on the couch,
listening to some Herb Alpert music. He decided to make a bold move for him, given his relationship with
Dianne, and he put his arm around her shoulders. To his surprise, she neither moved away nor made some
asshole comment. She actually seemed to like it. He applied some pressure, and she leaned toward him,
resting her shoulder against his.
Feeling the boldness that comes from getting laid, he leaned down and kissed her. She responded fully
and completely. Tongues began to fly, and he discovered that if he ran the tip of his tongue along her upper
lip, shed start to quiver. The kissing was pretty fastlonger, stronger, and more intense. Hands were
starting to move around. He was stroking her luxurious, thick, auburn hair, and she was stroking his neck
and hair. He moved his hand to her breast and she arched her back, pressing her boob into his hand.
They moved into the normal dance of making out, and soon clothes were coming off, landing in various
states of disarray. The two ended up partly undressed, lying on the couch, her top off and his shirt
unbuttoned. He was fully erect and hard, and she knew it. He was concerned that if he went too fast, shed
get scared off, but he was really turned on and he wasnt ready to stop. He took his hand and began to stroke
her breast, and then he worked his hand under her bra and was rewarded with moaning and back arching.
He slipped off the couch onto his knees so that he was perpendicular to her. He started kissing her
breasts and massaging them. He pulled down the bra strap and folded back the bra cup and took the nipple
in his mouth. His free hand moved down to her crotch, and her legs spread open wide. As they progressed,
he worked her pants off, and then in a moment of unconsidered passion, he stuck his face between her legs
and began to stroke her vulva with his tongue, the reward being a long, drawn-out moan and cry of delicious
fulfillment. Their lovemaking was interrupted by having to get out the Murphy bed, which rotated out of
the wall and then to the floor. But even the mechanics of getting the bed ready didnt dampen the passion.
Later, as they lay in the soft glow of the lights and candles, he could hear the cars and people outside.
Neither of them said anything except when he thanked her. Finally, he got up to go to the bathroom, saw a
clock, and was surprised to see it was only 10:30 p.m. Before he walked to the bathroom, he found his
underwear so she wouldnt see the scars, although it was dark enough that she probably wouldnt have seen
them anyway.
As he came out of the bathroom, Dianne asked him to bring her a bathrobe. He didnt understand her
directions and was unable to find the robe. Shed told him it was on a hook, but there were a lot of hooks.
Then she said it was on the back of the door, but there was a lot of stuff hanging on the door. Finally, as he
continued to look around, she got out of bed and walked to the bathroom. As she turned the corner toward
the bathroom, the light was better, and he had his first chance to see her naked.
She was shaped more like a light bulb than an hourglass. Her legs were short and her hips wider than
they had appeared with her clothes on. Hed have thought her breasts were bigger. Theyd sure looked like
it in her clothes, and that mystified him.
He was too nave to realize the usual etiquette of staying the night if you slept with someone, and he
started to get dressed. She didnt stop him or say anything except to say she was sorry for the terrible dinner.
They kissed, and he told her hed call her. They kissed again, and he left.
So it was a great weekend in guy calculus: laid twice on two successive nights out of three dates, and
he didnt even know the name of one of the girls. Not bad, he thought, for a guy with a damaged penis and
who looked like a troll.
Sunday was a day of rest for most of the day, and he waited until late in the afternoon to start his review.
He worked through the material, and it seemed to be all familiar to him. By 9:00 p.m., he was satisfied that
he knew the stuff. He went next door and played Hearts with Wilowatty, Evans, and Joe Kennedy and
played well. Hed spent a lot of time during the monsoons in Vietnam and in the hospital playing endless
games of cards, and it was usually Hearts. Poker wasnt allowed in most places since it was gambling, and
no one played bridge. About 11:00 p.m., he went to bed.
 Chapter 15
The Elephant Hunt and Proposal
Monday, he got up early. He dressed and spent thirty minutes or so in a quick review; then they all walked
up to the training center. He felt so good that when the beggar in front of the Ambassador asked if he had
any spare change, Johnson, to the surprise of all the others, gave him fifty cents. The good feeling continued
through the next six hours of the test.
Even though he knew the material, he left feeling that hed not done well. He couldnt put a finger on
why he felt as he did, but there was something that seemed wrong, and he feared that his passing the course
would depend on his final test. Hed end up in the bonehead class of losers. The depression deepened
throughout the rest of the day as his mind continued to process the ill feelings. His thoughts bounced up
and down and around his mind, and at every cycle, they added a bit more negativity and fear so that by the
end of the day, it was a huge rock of negative energy weighing on his feelings. He began to sink toward
what had been his refuge in bad times: booze.
It was like a bowl floating in water. All was well; then someone started putting rocks in the bowl. His
depression was the set of rocks, and as the depression deepened, it added more rocks. The rocks sank the
bowl deeper, and more water spilled in and the bowl sank more. When the bowl hit bottom, the switch of
his self-control turned off. At that point, all the normal moral constraints collapsed, and the real drinking
began. His bowl was sinking fast. There needed to be an intervention, or it was going to be bad. He had a
way, but pride and fear made him hesitate.
He got to the apartment in the early afternoon and sat in a chair, doing nothing for several hours. He
was convinced that hed failed, and he couldnt bear the thought of failing twice. As he sat there, Martin
walked in with a beer. He could smell the golden liquid, and the bittersweet smell of the hops and rice made
his mouth water. He could hear in his semiconscious mind, Go ahead, drink one. It wont hurt. You deserve
it. Youve worked hard, and theyve treated you badly. It will make you feel better, and youre going to
need it, because tomorrow when you find out you failed, youre going to be really pissed, and drinking
today will help you get by. The urge demanded every ounce of his concentration. The desire to drink was
fast becoming overwhelming, and in his last moment of control, he realized he had none left.
He waved Martin off wordlessly, jumped up and pulled his wallet from his pocket, and headed for the
phone. From his wallet, he pulled a battered piece of paper. On the paper was a phone number in Texas. He
dialed, and the call was answered immediately. This is Phil. I need an intervention, he said. He was asked
if it was urgent. Johnson slipped into military jargon: Affirmative. The voice asked for his number, and
having written it down, told Johnson to stay by the phone. Hed be contacted within the hour. It was done.
Hed contacted his former counselor in Alcoholics Anonymous, who was still in the army in Texas.
Before leaving Fort Hood, his contact, whom he only knew as Jim, gave him a number to use if needed and
suggested that Johnson find a meeting in LA. Jim, who had destroyed a marriage and doomed himself to
little career advancement in the army due to drinking, knew that Johnson would need help. Johnson, of
course, like a lot of alcoholics, was arrogant enough to believe hed get through it without assistance. After
all, there was no more stress like hed had in the war, right? The phone rang, and a voice identified itself as
Steve. Steve asked Johnson some questions and then told him that he should drive to Santa Monica City
College, report to a specific building and room, and do it now.
Steve turned out to be a long-haired guy, about forty-five, who stood five foot five and had that sickly,
skinny look common to heavy drinkers who didnt eat correctly. He was leathery-looking, but his eyes were
bright and clear. When Johnson approached Steves door in the building, he noticed that all the other offices
had nameplates that gave the first and last name of the occupants, but Steves had nothing except a number.
Johnson found out later that Steve was a facilities manager for the college, and he had a deal there that
let him be an AA coach. He took Johnson in hand, and they began the recitation: Im Phil, and Im an
alcoholic. Ive been mostly sober for two years now. Jim had briefed Steve that Johnson wasnt the typical
drunk. He could control his drinking most of the time, could be around drinkers without falling off the
wagon, and could, most of the time, drink socially without igniting the need to continue. That all being said,
there were times when stress overwhelmed him and when there was a person or thing that Johnson cared
for that was lost, or about to be lost, that drove him to jump into the abyss. The trick was to break the cycle
of depression (although it wasnt called that in those days) and stress.
For about three hours, Steve pounded away on him to get him to talk about what the stressors were, and
Johnson fought him all the way. He was afraid that once he began to confess his fear, he wouldnt be able
to stop and would reveal all the lies hed told so far, but Steve was relentless. When he finally told Steve
that the base reason for his depression and desire to drink was the mere possibility of a second failure, Steve
sat there for a minute staring at Johnson, with his breath coming quicker and quicker, and then he exploded.
You wasted three hours of my time because you might have failed some stupid fucking test for the second
time! You asshole! You fucking asshole! He bellowed, Im here to help people with real problems, not
some shithead with performance anxiety!
Johnson was shocked that a coach was being so angry and pissed off. He wanted someone who would
validate his need to be reassured and to be told that it was all going to be all right. He didnt get what he
wanted. He got anger that wasnt made up. It was real and scary. Steve was getting madder and madder.
His face was beet red, and the veins were standing out in his neck and forehead. Johnson was worried hed
stroke out. Its a really important test, he said meekly, totally cowed by Steves outburst.
Fuck you, important! I work with guys that have a hard time getting out of a gutter to avoid drowning
when it rains, and you come here looking for someone to validate your infantile little concerns? Get out of
here, you jerk, and next time you think you need to call, dont.
Johnson stood up now, his meekness turning to anger, and he could barely say sorry to Steve as he
turned and left. He walked outside the building into the late-afternoon sun. He looked left and right for a
bar so he could drink his sorrows away. Had he really come down here because he wanted someone to
validate his feelings, to mother him and tell him it wasnt his fault, that he was OK? Did this qualify as the
stress level that made him drink? Was he a total ass? That was it! Im an ass! I dont deserve to be a broker
or to be anything! Fuck! He thought. Why didnt I stay in the army? For the most part, it had been one of
the only times hed been happy. Now, here it was, his first flight out of the service, and he was going to
fail. He stood there, and tears, actual tears, started to well up in his eyes. He wondered if hed cry.
While he was standing there in the middle of his pity party, he heard one of the unique sounds of the
world. He searched for the source just in time to see a P-51D Mustang lifting off the runway at Santa Monica
Airport. The plane was polished silver, and the sound of the twelve-cylinder Merlin engine was like music.
It lifted off and rose upward, balanced on those impossibly thin, laminar-flow wings as the landing gear
retracted. The pilot banked the plane to the left to clear the airspace and kept on climbing. Johnson stared
after the vanishing plane as if he were a small childwhich, in a way, he was.
A young woman had stopped next to him to watch the plane also. What was that plane?
P-51D Mustang, a World War II fighter. Probably the best propeller fighter ever built, he replied,
still staring into the sky and hoping to see the plane again.
Oh, another example of the waste of money on war when we could be spending the money on real
problems, she said, still looking after the plane.
He looked at her for a moment and was tempted to say something but held back and silently walked to
the car. He drove back to Santa Monica Boulevard and debated for a second if hed turn left toward the
beach or right toward home. The beach won. For a couple of hours, he walked on the beach and Santa
Monica fronting the ocean. It wasnt very inspiring. The town looked like it was on the downhill side of
things. There were bums on all the park benches, and dog poop seemed to grow from the ground. In the
park along the cliff overlooking the ocean, the smell of urine was so strong, the ammonia made your eyes
water. Here and there, a bum was waking up from a hard day of doing nothing to get ready for a harder
night of begging and hopefully drinking.
He was going to get something to eat, sit on a bench, and watch the sunset, but hed seen earlier what
had happened. A professionally dressed young couple had brought a picnic lunch and sat on one of the
benches, pleasantly into themselves, and then several of the bums surrounded the table demanding food,
wine, or money. The young man told them to leave, and at this, they got more aggressive, the volume of
their voices rising and the tone growing angrier. The young woman looked around for a cop or someone to
help, but the joggers and dog walkers hurried by with heads deflected. Finally, the couple got up and left,
followed by three bums haranguing them and swearing. Hell of a thing, Johnson thought. He hadnt helped
either.
He drove back to the apartment and found Gorka out, so he read for a couple of hours and then went to
bed. Gorka came in quietly, as he always did. He might be a dork, but he was housebroken, at least.
The nights were long late in the California year. The beams of the street lights reached through the
windows, casting shadows and patterns of lines on the walls as the breeze moved the curtains. He watched
with half-open eyes, stupid with too much sleep and not enough exercise. Finally, the enforced stillness
was too much, and he got up and started to get ready for the day. He closed the door to the bedroom so he
wouldnt wake Gorka. He looked at his watch and realized it was only 4:30 a.m. and he had a lot of time
before class.
He got his running shoes and shorts on and ran up to Wilshire and then a few blocks down to the
newsstand. Over the time theyd been in LA, the newsstand guy had never carried more than six Wall Street
Journals, despite the demand, so Johnson grabbed the six and tucked them under his arm and ran. He
completed the block by running to Sixth and then back to Kenmore and the apartment. He laid the papers
in front of the doors and then went to his own and read the paper.
The morning walk started just as it had for the last eighty-four days: column of ducks, three pairs almost
in step the whole way, across Wilshire. Down two blocks, and the ducks were now eight pairs. The only
thing that didnt happen at the door of the center was for someone to shout Halt, right face! Fall out! They
milled around outside, finishing cigarettes or dirty jokes, and then into the salt mines.
They all filed into the main boardroom for the first class of the day, which was on insurance of some
sort. This was a yawner. There was no insurance on any of the tests. If you got licensed, it was your own
deal. In the brokerage industry, if there was no money in listening, no one listened. Johnson felt sorry for
the presenter. He was obviously well versed, but it wasnt that he lacked charisma; he actually had
anticharismahe drove people away. It was just boring, boring, boring. He looked up, and Buford was
looking back at him. Hed shaped his thumb and index finger like a gun and pretended to shoot himself. At
the end of two hours, Johnson was ready to open a vein.
They took a break and then filed back in for the next two classes on mechanical efficiency, which was
really how you actually did business. As the day was ending, they were told to return to the main boardroom.
Norm Padgett, who looked like hed been drinking the night before and gotten into a losing battle with a
lawnmower, told them that due to unforeseen problems, the NYSE wasnt going to be able to correct and
validate the scores on the Series 7 until right about the time they were going to graduate. There were huge
groans, none louder than his, as hed pinned hope on getting his score back.
Norm also announced the schedule for the Christmas holiday. They would have ten days off, starting
the twenty-third of December, and classes would start again the fourth of January. They were targeted to
graduate the first week of February, so time was wasting. There was, of course, a reaction to the
announcement. What Norm had done was pull the plug from their sense of restraint. Theyd taken the Series
7, and those who passed were in. Those who failed the first time would find out later, but if they failed
again, it was unlikely they would be working for DuPuy much longer, so they knew their fate. They were
largely through the course. After Christmas, they had four weeks of run-of-the-mill stuff, none of it all that
vital to their future careers. Slowly, a deadly attitude seeped into their collective psyche.
Combat tours in Vietnam for the army and navy were for one year. For the Marines it was thirteen
months, for some reason. If you survived to the six-month point, you would start thinking about the end of
your tour. Closer and closer to the end, you became a short-timer, and this manifested itself in an attitude
of avoiding hazardous tasks, starting to get rid of any stuff youd accumulated, and checking your world
uniform to see if it was still wearable and not covered with mold like everything else in Vietnam.
Sometimes, troops would draw pictures of the months remaining until date return overseasDROSon
the covers of their steel pots and cross off each day as it passed. In the last month or so, most of the short-
timers were useless, so they were assigned nondangerous jobs.
Now that they were within sight of the end of the combat called the DuPuy and Winston training
program, they became short-timers, and their attitude came to include more and more challenges to
authority. The whole nature and tone of the classes changed. There was more humor and more lateness.
One day, one of the guys wore a very pale blue shirt to class, and he wasnt expelled. However, he never
repeated the infraction. Everyone assumed theyd passed the test, just as combat troops assumed that since
theyd gotten to the end of the tour, they were going to survive. It was a dangerous attitude, and Johnson
had seen troops killed either in accidents or combat violence in their last months. As the short-timer attitude
developed, he wondered if the powers that were would reach out and fire a few just to maintain class focus.
They did have one major task to finish before Christmas. Earlier in the sales classes, theyd been
introduced to the concept of the elephant -clients with a lot of money. That usually meant they were heads
of major companies, famous, or ran successful businesses and therefore hard to contact given they were the
targets of every other broker as well. During the period they were in training the trainees all had to locate
2elephants and get interviews with them. The idea was to get them used to talking to and getting through
to very important customers. They were given no restrictions or instructions about how to find or choose
their targets, but they had to give reports on their elephants.
For his first elephant Johnson had scored big with an interview with Roy Ash the chairman of Litton
Industries even though he had been told by everyone that someone else in the class, who that was never
made clear had already gotten an interview. In turned out not to be true and after a rough start with Ashs
handlers the interview went very well. For the second elephant hunt Johnson had a couple of people in
mind. His first choice was Parnelli Jones the legendary racing driver who had won the Indy 500 a bunch
of times. He was now head of his own company that sponsored race cars on the Indy circuit and was trying
to get an Indy race for the Ontario Motor Speedway in the eastern part of LA.
Johnson had never been one for tricky or clever strategies, so he figured that hed just make a call and
explain to whoever answered the phone what he was after. Certainly, after they heard what he was doing,
they would grant him an interview.
In the next few days, everyone else in the building got their appointments. Wilowatty interviewed the
four-star admiral who commanded the naval district that included LA; Martin got to Armand Hammer, the
chairman of Occidental Petroleum; Carpano naturally got Hugh Hefner of Playboy, along with a pass to the
Playboy Club and Mansion. Johnson had called Parnelli Jones office but had not gotten a reply. The guys
decided to go to the Mouse Trap, and while they were there, they talked about who they had scored with.
He was falling into despair, as he had no interview and the time for the presentation was fast approaching.
The next day after class, he came home a bit later than Gorka because he stopped for a haircut. When
he walked in, Gorka was on the phone and said, Hold on. He just walked in, and handed him the phone.
Johnson was never very good on the phone. In fact, he hated it, and even though theyd been trained on
its sensitivity, he didnt believe that emotions came through the line. Yeah? Johnson! he barked.
This is Parnelli Jones. I understand that Phil Johnson wants to interview me.
He was flustered at the direct statement and the fact that this famous man was calling him directly.
Ahahyes, Mr. Jones, Im a brokerage trainee at DuPuy and Winston, and one of our assignments is
to interview a famous person. I have an interest in car racing, and I wondered if I could come and interview
you.
Sure can. Thats why I called back. When can you come here? Im in Torrance.
I can come this afternoon or tomorrow, whichever is better for you, sir.
Tomorrow at two, was the reply, and the phone went dead.
He stood there, stunned. He was about to interview one of the most famous race-car drivers of all time,
and it had been as easy as a single phone call.
That night as usual they all gathered at the Mouse Trap. The place was packed with young, horny men
and women who could pretend to be horny to keep them from another lonely night. He found Martin and
Buford and Bob Holland and sat down. I just got a meeting with Parnelli Jones, he announced, almost
bellowing it to be heard over the crowd noise.
No shit? was the universal response,
The noise level actually rose again, and he could see Hollands face light up. Holy shit! Thats Martha
Raye! Everyone at the table turned to see a small woman by the bar dressed in an ersatz Special Forces
uniform. She had on sunglasses, a real green beret, and what looked like a jungle fatigue shirt covered with
patches of various units.
During the war, the USO had sponsored a number of entertainment troupes to go to Vietnam. Bob Hope
led one troupe, and Raye often was part of his group, but she also led a group of her own. There was a
legendary story of her holding over her entire troupe at an aviation base because the unit had been called
out on a mission before she could perform. She paid the entire troupes wages out of her own pocket, and
then they performed when the rescue mission was over. She had a great love for the troops and no use for
the antiwar protestors and liberal politicians who opposed the war.
Everyone crowded around her, and she seemed to really come alive with all the attention. Finally, all
the noise quieted down, and she made a few jokes and a speech about how she loved all of them for what
they did. Pretty soon, the noise started to rise again, and everyone went back to their pre-Christmas short-
timer drinking.
The next day, the entire class knew that Johnson had scored with Jones. As he was booming south
toward Torrance for his meeting with Parnelli Jones, he thought about what went into the attempts to
discourage someone else by creating a mythical person who had done whatever it was first and better.
Johnson was later to discover that in the investment business, it was normal for people to put others
down by telling them that what they were trying to do had already been done and done better, so dont try.
Out of that insight, he developed another axiom: When youre trying to do something, ask the experts
and they will tell you why what youre doing cant be done. Then go ahead and do it anyway!
The trip to Torrance was fast, as he was going against the traffic. He arrived at Joness office with
fifteen minutes to spare. Just like in the service, hed mapped out the route and memorized the landmarks.
Jones turned out to be a sad-eyed man who had the look of having been around the track a few times.
His face was weathered and wrinkled and showed signs of some facial burns. He was very casually dressed,
but his office was impressive, with all the pictures of his racing triumphs. There was a large picture of Jones
with Andy Granatelli and the STP turbine car that Jones had driven and almost won the Indy with in 1968.
Their conversation routed and moved through Joness life and career and his retirement from racing.
Jones had purchased the Ontario Speedway in the eastern part of LA and was trying to get a couple of Indy
car races at the track. The Speedway had never lived up to its billing since it had been built, and it was a
struggle to get it working. Jones seemed like one tough son of a bitch.
At the end of the conversation, he asked Johnson what his purpose was in coming down, and Johnson
told him it was an assignment to teach the trainees how to get to talk to very wealthy people. Jones laughed
and said that he didnt consider himself rich. He then asked Johnson if doing well was a big deal in the
class, and Johnson said it was and wondered why the weird question. Jones asked where the training center
was, and then the interview was over.
A few days later, the trainees were scheduled to make their presentations on the elephant hunt. Johnson
was scheduled to talk in the late morning, about 11:00 a.m. Hed just started talking when the door opened
and Norm Padgett came in, followed by Parnelli Jones. Jones had decided to make Johnson look like a king,
and hed driven up to the training center. He talked to the class and signed autographs and then left. For the
first time, Norm looked pleased that Johnson was in the class. For a few hours, he was a hero, and the
experience was later to give him one of his best sayings. But that would have to stew for a few years to
fully develop its flavor.
That night, he and Dianne went out to dinner again in Santa Monica and took a walk along the beach,
but it was too cold to stay out long. They ended up in her apartment and had sex all night long. His
adrenaline was in full flower with his success, and he was full of sex drive. He could hear people walking
by her window and wondered if they could hear them having sex. Dianne had turned out to be a bit of a
screamer every time she had an orgasm.
The next morning, they were having a cup of coffee before he drove her to the office, and he said to
her, Were going off on Christmas break in a couple of days, and Im going to see my parents in
Pennsylvania. She asked how long hed be gone, and he told her until the third. She seemed disappointed.
You want to go with me? he asked.
 For the first and only time her life, Dianne was speechless. Finally, she said, You want me to meet
your parents?
Yeah, why not?
Thats a pretty serious thing, to bring a girl to meet your parents, isnt it? Usually, that means youre
really serious about them.
I am, was his reply. Look, I dont know if Im going to pass the Series 7, since they havent given
us the results and wont for a while. But if I do and I get to be a broker, would you consider marrying me?
She gazed back at him. Her eyes brimmed with tears for a moment. Then the smartass came back and
she said, That was the weirdest marriage proposal I ever heard. If this and maybe that. Just ask what you
want.
His temper began to rise and he almost walked out, but he was committed now. Hed broached the
subject, and to walk away would brand him in his own mind as a coward. So he repeated, If I pass my test,
will you marry me?
Ask me at that time, was the reply, which did nothing to soothe his anger. Hed asked a conditional
question and got a qualified answer. What else did he expect? He wasnt sophisticated enough to realize
that you get better answers if you ask direct questions.
 Chapter 16
Off to a New Adventure
The trip back east was as expected. He hadnt been home since 1971, and his mother was overjoyed to see
him and with his engagement. His father was his reserved self, asking a few probing questions that Johnson
knew were intended to provide information his father could act on.
He had no friends in Lancaster; hed never lived there. So, in the boredom, he realized how sleep
deprived he was, and he slept like the dead. His father, of course, was suspicious of his long sleep periods
and peppered him with questions about the training and who Diannes people were. He almost choked
when he found out she was Catholic.
New Years Day, he was on his way back to LA. He was the first of his apartment house to arrive, so
he had a lot of time to himself. He was besieged by the near-constant comments on the Rose Bowl football
game during which the nearly sainted USC Trojans were defeated by Ohio State. Served them right, thought
Johnson. What did they expect, naming the team after a condom? Dianne was out at her parents, and he
could have visited, but hed never met them and he really liked being alone.
For all the rest hed gotten in Lancaster, he was still tired, and tired in a way that wasnt relieved by
sleep. He was tired of the routine; he was tired of the pretending at the training center. Hed been told that
the secret to success wasnt who you were but who potential clients thought you were, so each trainee
developed kind of alter persona. He was tired of maintaining his. He wanted to yell and scream and call
people idiots when they were. He was tired of learning tricks to convince them of things and tired of not
being totally truthful. However, he wasnt entirely pure in that area either.
The gang, drunk or well into the process, started to arrive on Sunday, sounding and acting like
cowhands coming in off a long trail drive. On Monday, the first day of the new and final section, it was
announced that Col. Arthur Bull Simons, a legendary special-forces commander, would be coming to
address the class on Tuesday. When he finally spoke, he was boring, dry, and insulting. He made the
comment that anyone who had left the army in one of the reductions was just not good enough. Johnson
bristled at the comment but held his tongue.
There had been some signs and comments in the last few months that things might not be going so well
at the firm. They were reading the Wall Street Journal now, and it carried stories of the financial distress
of the country and the stock market. Of course, there was no acknowledgment of any trouble or even hints
of it. It was all a big secret, just like everything surrounding Moody. Bob Hollands wife related to Phil one
night that Bobs boss in Dallas had called and after the conversation, Bob was very depressed.
The trainees were pretty attuned to the personnel at the training center, and theyd noticed a few
strangers hanging around who were neither instructors nor office managers. Brokerage houses are rumor
mills. In fact, the stock markets largely run on rumor as a primary fuel. Rumors often have some hold on
the truth, however tenuous, to maintain currency, and just as one dies, some fact or almost fact will give it
new life.
Evil and wrong stories appeared in the local papers detailing the misadventures of the various trainees
while theyd been in the military. Whoever was researching the stories was getting some good information,
but the conclusions they reached where similar to those of civilians viewing military actions with 20/20
hindsight. Johnson had no use for the press. He had had an unfortunate incident with a New York Times
reporter in Vietnam, and he never forgave the press for the tone of the stories surrounding the events leading
to his nickname, Old One-Shot. After several more stories ran, Wilowatty and Gerry Andrews called the
reporter and reminded him that it might not be the best life move to make fun of people fresh out of the
jungle who knew a lot about guns, explosives, and killing people.
It wouldve seemed to a reasonable person that the offices the trainees had selected would have been
notified, but they now learned that the branch managers were going to come to LA and interview them, and
their decisions would be the final say. They could finish the course but not have a job! They also were told
they were going to take a course in psychocybernetics, which Johnson quickly realized was just blowing
smoke up peoples asses in a different way.
 All of this had to be crammed into an increasingly busy schedule of drinking and fucking, drinking and
driving, driving, drinking, vomiting and parties, and some rude jokes. John Abass was, as Buford noted,
the token Negro. At age twenty-four, he decided he had to have a circumcision. The doctor told him he had
to avoid an erection for three weeks until the stitches came out. The class telegraph went into overdrive,
and every dirty picture and Playboy centerfold disappeared and appeared as a new surface in Abasss
apartments. He swore unending vengeance, but it was a great laugh.
There continued to be departures. In the afternoon class, a guy was fired for sleeping with someone not
his wife. Then Charlene, Norms hot secretary, was fired. Two and two made four. They had been sleeping
together, and since this was Charlenes second offense, her hotness was no defense. Johnsons suspicious
mind was now convinced that the two women in the class were spies. They werent particularly good at the
sales role-playing. They werent even very pleasant. But they remained. The brokerage industry was a
mans world, and women were a minority. Perhaps theyd worked a deal with Moody to inform on the rest
of the class in return for seats at the training center.
The office managers filtered in and out, and finally his soon-to-be-maybe-manager arrived. Foley was
a personality who dominated a room the way a rotten egg dominates air space. He was greasy-looking and
filled with clichs about everything and endlessly insisted on calling the training center the rookery and
laughing every time at his own wittiness. Johnson was pretty tone-deaf to personality, but even he was put
off by Foley. Foley cheaped out on dinner. Other managers took their trainees to the Brown Derby or
Chasens; Foley took him to Hamburger Hamlet. He had almost no questions for Johnson and spent the
time talking about himself.
A brokerage-house office manager shared in the production of the office, and his compensation was
damaged by increased expenses. Therefore, managers tried to be as sure as they could that the incoming
broker would be able to pull his own weight within a reasonable amount of time. Johnson let his suspicion
go, since he really wanted to move forward and get out of the training center.
The next week passed, and it seemed like everyone was fully or half drunk all the time. The pressure
was off, and they released it in any way they could. The big event before graduation was Moodys speech
to the LA Rotary. The trainees were all expected to be there, but they werent invited to the lunch; just the
speech. The speech was pure Moody, colored with what he called word picturesof wings on pigs, boots
that we bet, and flying donkeys. At the end of his speech, the trainees were herded onto the stage and, being
ex-military, they fell into neat ranks behind Moody.
Let me tell you about these folks behind me. Moody started waving in their direction. There are a
hundred and twenty-five men and two women. Among them is a Congressional Medal of Honor winner,
six of them hold the Navy or Distinguished Service Cross, and there are twenty-three Silver Stars and
buckets of Bronze Stars and Distinguished Flying Crosses. Two were POW, and many were wounded in
action. As recently as six months ago, some of them were slopping around in rice paddies in Vietnam
this he pronounced, emphatically, vee et namThese are tough, honorable people not afraid of much, and
in a week or so, Im going to turn them loose after your brokerage account. You should just surrender now,
because once they come after you, it will be just a matter of time before you do business with them.
The audience responded with polite but not enthusiastic applause and a laugh. As the trainees were
herded away, Johnson, in a stage whisper to Buford, said, I feel like one of those cows down at A&M.
This earned him a withering look from George Bates.
The rumors and the news of economic problems continued unabated, and Martin one night summed up
the feeling. Its like being in an ambush position waiting for the gooks to arrive. Theyre coming; you just
dont know when.
Foley had called and told Johnson not to hurry to the office. They were remodeling, so he could take
his time. He decided hed take a leisurely driving trip through his old stomping grounds in Carmel and
Monterey.
Graduation Friday arrived, and both classes filed into the main room for the ceremonies. There was a
motivational speaker there to fire them up, but when the time for him to start came and passed, everyone
started to wonder what was going on. They were used to waiting; it had been a fact of life in the military.
So they waited. Finally, the usually sunny George Bates came in looking decidedly morose. He took the
microphone and announced that Norm had an important announcement to make, and they should just wait.
Gasoline on a fire wouldve had less effect than Georges few words. The rumor mongers gave everyone
self-satisfied smiles. In a fog of ignorance, anyone with a light is a beacon of hope, and now the mongers
became the hope of salvation.
Finally, there was a movement on the side of the stage, and Norm walked out with his trademark cigar.
This time it was lit. He held a huge pad of machine paper. He picked up the first page and started to read,
and he read and read, puffing the cigar and glaring between paragraphs. The speech was so dense that the
trainees started talking among themselves.
What the fuck is he talking about?
Quiet, Im trying to listen.
Fuck you, asshole, whispered the first voice.
Jerk! was the response.
Johnson, as was his habit, started to blame himself. Maybe it was just him. Maybe he was too stupid to
understand. After all, hed failed the Series 7 the first time. He looked around to see if anyone else was
engaged and saw the bored, blank looks of incomprehension.
It took seven minutes for Norm to finish. With a cloud of smoke, he looked up and said, Well, thats
it.
The room was quiet as others looked around for help in understanding, hoping there was some clue on
the walls or ceilings or floors. No one wanted to look stupid by asking the question that would reveal him
as the dumb shit. Finally, a voice said, Norm, I have a question.
Johnson groaned internally. If it was a suck-up like Mellman, a smartass like Wilowatty, or a jerk like
Gorkawho were all seated near himasking the question it meant that whatever retribution was coming,
hed be in the kill zone. It wasnt any of those suspects, though; it was Buford. Like most southerners,
Buford could turn the accent up or down depending on the audience. Today he turned it up so he sounded
like a shit-heel cowboy. Ahh, Mr. Padgett (he said it pad jett), Buford Haynes, College Station, Texas. Ah
realize that just because ah graduated cum laude (cuum laudee) from Texas A&M University and have a
graduate degree in business from the University of Texas, ah might not be very smart. This was greeted
with laughter. But just for an old country boy, could you tell me what the hell all that crap you just read
means?
The firm is bankrupt and is being closed down, was the response that preceded the cigar smoke off
the stage.
There was pandemonium as everyone tried to talk or ask questions of the empty stage. Johnson was
quiet. He might not even have passed the Series 7, the company was closed, and he was out of a job. The
staff tried to regain control, but it was useless. Most were leaving, the iron discipline of the training center
and its threats of firing were gone.
In the noise and leaving, Kristen Kelley, the mean bitch among the two women, walked over to Johnson.
Youre really in trouble, Johnson. Company failed, you flunked the Series 7 twice; maybe the army will
take you back.
I failed once. We dont know the results of the retest, he argued.
You bought that line of shit about problems in the test scoring? They wouldve told you right away if
you passed. You flunked! Again! Youll be sweeping streets.
Johnson was having second thoughts. She might be right, but his ego required a response. Youre out
of work too, bitch!
You kidding? The industry is so hard up for women brokers, I can get a job anywhere, anytime. I only
came here because they paid me two grand a month, and I had my choice of offices. It was a sweet deal. I
had no risk of getting fired, and good pay, too! Johnson was thunderstruck. His suspicions about the two
women had been right; they were a protected species. He was getting $650 a month, and this bitch was
getting two grand?
The weekend should have been about trying to convert the shallow friendships of the training center
into real ones, but instead, it was filled with a Friday drunk as they tried to drink up all the leftover beer,
wine, and liquor. Johnson didnt participate. He sat in his apartment, beating himself up. His world was all
upside down again. He was depressed, scared, and sick to his stomach. Most of the night was trips to the
bathroom, dumping his guts in the toilet.
On Saturday, they were all summoned to the training center. Some of the kiss-asses wore the Moody-
directed suit and tie, but Johnsons crew showed up in various states of undress. Johnson wore a black T-
shirt with the screaming eagle of the 101st Airborne on the front, shorts, and tennis shoes. There were
sunglasses worn indoors to hide eyes red with hangovers.
George Bates came in and wasted no time. He realized that boring this audience was likely to bring out
punji sticks and live ammo. In an attempt to gain sympathy, he assured them that the staff had had no more
warning than they had, and the staff were all looking for work. He told them that Moody had worked a deal
with Dean Witter and Blyth, Eastman to interview all the trainees. He also told them that the particular
office they might have chosen might be negotiating with firms other than Witter and Blyth. He told them
that if a trainees office was being taken over by Witter or Blyth, its managers had agreed to take him or
her. In the case of the offices that were being taken over by other firms, the trainees were free to negotiate
with that office or they could go to a Dean Witter or a Blyth office.
It was confusing to begin with, but filtered through the lens of excessive drinking, it was a mess. In
keeping with the downward spiral of things, Johnsons office in San Jose was negotiating with another firm,
so he didnt have a guaranteed spot. His bowels did a leap and cramped up to the point he let out a low
moan. As the cramp passed, he asked the question most important to him. What was the status of those who
had retested on the Series 7?
Bates responded that the rumor that all those who were waiting for results had failed was untrue and
that they would know in the second week of February. He gave them a phone number to call to find out if
they passed. He also told them the test was universal. If you passed, it was good at any firm. He got a bit of
a laugh when he commented, Even if you didnt pass the Series 7, you all passed the commodity test, so
you can deliver cattle to Guymon.
Johnson packed his belongings that afternoon. He arrived with two duffel bags and a small suitcase and
left with the duffel bags and a large suitcase. He called Gerry Foley, who again told him not to rush. The
office was interviewing other firms, but no decision had been reached. If he didnt like the choice the office
made, Johnson was free to interview other firms. He went out with Dianne and found out her office had
been taken over by Reynolds and that she still had a job. She tried to make him feel better with sex and the
story that a lot of firms would love to get a fully trained broker without the expense of creating one
themselves.
He put in an appearance at the training center, but there was nothing new, so he decided to leave on
Monday. People had left, but he was one of the bitter-enders. They got very drunk and slept where they
fell. They left the apartments a mess, with the attitude that DuPuy and Winston had fucked them over, so
why did they care about the apartments the firm had rented?
Monday morning, he ministered to his hangover with several sugared donuts, a milkshake, and some
water. He gassed up the car and was away. The drive out of LA affirmed his decision not to choose an
office there. It was a land of raised middle fingers, horns honking, stupid driving, and smog. He managed
to make it to Gaviota before he was washed out by the hangover, and he stayed in a place that could have
doubled for the Bates Motel from Psycho, right down to the creepy manager.
One of the advantages of heavy drinking is the great sleep you get twenty-four hours later. Having
survived the Bates Motel, he was up with the birds, and after breakfast at a local caf, he started driving.
He wound his way up the El Camino Real, now called Highway 101, and then on a whim and the hope of
nostalgia took Highway 1 up the Big Sur. There were times, as he rolled through the green landscape of
gentle hills, iconic oak, manzanita trees, and grass, that in his imagination, he was on a trip back in time to
when Spain was sovereign. The time Richard Henry Dana had written about in Two Years Before the Mast.
He mounted the hills to the spectacular view of Morro Bay strung out around its shore, and then he
passed into the Big Sur proper. During the 1960s and early 1970s, the Big Sur was the hangout for the artsy
crowd, hippies, free-love types, and those who followed Timothy Leary to tune in, turn on, and drop out.
The hippies and the antimaterialists had been driven south from Carmel and Monterey and now were
centered in Harmony and Cambria. At a gas station in Cambria, he saw VW buses with the peace symbol
painted on the front and those whose ponytails had changed, but their lifestyle hadnt.
It was a culture and time foreign to him in both circumstance and ideology, and he was convinced that
he was attracting attention with his car, short hair, and generally military appearance. He left and powered
up the road past the monument to hypocrisy, San Simeon. William Randolph Hearst had lived there for
years with his mistress, Marion Davies, but he demanded that his guests not sleep with those they werent
married to.
The road north of San Simeon began to twist and turn, writhing between the mountains and the ocean.
It had been hacked from the rock, and you were truly between the devil and the deep blue sea. He and the
Z were in their element, hugging the curves and powering away on the straights. The engines strength
seemed limitless and the car invincible in its handling. He drove past a hidden beach he knew. When hed
been at Fort Ord, the pilots had had to take training flights to maintain flight status, and they often flew
down the coast. The hippie chicks would swim naked, and when the helicopters passed over, they would
taunt the crews by pointing at their crotch with an invitation the crews couldnt accept.
Near Kirk Creek, he saw the road that led up the mountains to Fort Hunter Liggett in the Salinas Valley.
Hed been there with several other officers on a temporary assignment, and he and John Dancy had driven
over the road back to Monterey in his MGB. It had been pure heaven: two guys on the road with no cares,
the wind blowing, and the engine screaming. The traffic began to pick up, and he was slowed, which
allowed him time to look at the ocean and the spouts of the migrating gray whales. Finally, he was in idyllic
Carmel. He entered Monterey and drove past his old hangoutObergsand his old apartment, finally
taking a room at the Holiday Inn on the beach.
Monterey was still a town with a lot of the charm captured by Steinbeck in his novels. During most of
his time at Fort Ord, hed experienced real happiness, and after the trauma of Vietnam, the hospital, and
DuPuy and Winston, he was anxious to find that most elusive of emotions again. He remembered the cold
mornings, the fog clinging to the troops as they marched through it. He remembered the glittering afternoons
when the retreating fog opened to blue skies, warm sun and sunsets so spectacular, they demanded you sit
and watch. In the evening it would cool off, and lovers would huddle for warmth. Gentlemen would share
their sport coats with their ladies as the town lit up with outdoor fireplaces.
Many of his remembered places were gone. The Gilded Cage, which he had been told by the jokers
was the best bar for picking up girls, was closed. It was, of course, a flaming gay bar, and the joke was
played on all the rookies. He drove through Fort Ord, a place of bittersweet memories: the good times of
marching and training the troops and that horrible night and the nights that followed until the court-martial
was over.
His wandering took him to Cannery Row and to the Outrigger Restaurant. He was bummed at being
alone, and the trip to Fort Ord had inflamed his depression and feelings of failure and uselessness. He
decided to get McDonalds takeout for dinner, stay in and watch The Devils Brigade for the 781st time.
So, as the sun set in a kaleidoscope of colors that tinted and shadowed the pines, as Doc Ricketts and the
Sardine Factory lit up, he sat in a room with all the charm of a mental institution. While the surf he loved
to watch pounded into the soft sand a hundred feet from his door, he sank further into depression and self-
pity. Hed come to Monterey to relive a time when hed been happy, and now he let his depression and
anger rob him of experiencing the very things he sought. In the end, his attempt to be happy plunged him
out of control into misery.
Years later, Johnson would read Thomas Wolfes You Cant Go Home Again, and the title, if nothing
else, stayed with him. Your memory of home is accurate only in your mind and grows more accurate to you
and less accurate in fact as the years pass. Like old photos, our mental pictures of times and places in the
past fade and crinkle, and belief in the stories told to future listeners grows less in fact and more in comfort
to the teller.
The next morning, the cold and breakfast at a restaurant remarkable only for its absurd prices drove the
depression away long enough for him to decide the nostalgia tour was over. He made his way north and up
through the arc of weirdness in the Santa Cruz Mountains, home of religious cults, mass murderers, and
survivalists. He raced down the twisting two lanes of Highway 17, doing seventy to keep up with the traffic,
the concrete barriers whizzing by inches from his car door. He found Winchester Boulevard, a broad avenue
running east and west, and two blocks off the freeway, he found the office.
It was in an eight-story building of unremarkable architecture and the required parking lot on three
sides. He drove around the area, approaching the building from different directions so hed know how to
get there later. Then he found a Travelodge and took a room. He was pleasantly surprised. Most Travelodges
were no cleaner than a normal motel, but this room looked like someone had actually cleaned it, not just
used the dirty towels to wipe it down. After he checked in, he began to feel tired, and so he took a nap but
was awakened by an inability to breathe. He started to sneeze, which forced the fluid flowing from his nose
up into his ears, and his eyes were red and running. He administered his usual palliative Contac C, and
thirty minutes later, the flood of fluids was replaced by bone dryness and then tiredness.
He awoke several hours later, his face pressed against the shelf between the beds. He realized hed slept
five hours, but he still felt like crap. On Thrusday, after a fitful nights sleep, he awoke feeling somewhat
better. He had the rest of the week to himself, so he did what came normally: he explored. As he navigated
the unfamiliar traffic patterns of San Jose, he realized why hed never liked the place when he was stationed
at Ord and drove through. There was a great deal of history in the area with the towns named after saints,
and there were a few of the old Spanish missions around, but San Jose was different.
It was at the end of a long valley formed around San Francisco Bay. San Jose was like a bucket at the
bottom of the bay, all of whose undesirable aspects ended up in the town. Streets crisscrossed and seemed
to go nowhere. The town seemed to lack soul, purpose, or uniqueness. It was a town because it was a place,
not because it fulfilled any function. Johnson drove up and down the Peninsula, as it was called, exploring
the area and some of the sites, but the traffic was terrible, and he hated it.
By Friday, hed had enough of exploring, so he decided to give the car a cleaning. He was working on
the interior when a womans voice said, Excuse me, sir.
In a tired-looking Buick Rivera were two women who both looked like they could use a good meal. He
was alert to the fact that they seemed to have no concern about approaching a strange man in the parking
lot of a motel located in a neighborhood of uncertain gentility. They were looking for a place called the
Elizabethan Inn, which was a faux-medieval pub with women stuffed into bustiers so that they mounded
up for the mostly male patrons. Hed seen it in his driving but wasnt sure where it was, and he committed
a particular act of stupidity. He had within him a wide streak of Good Samaritan and liked to help if he
could. He offered to get the phone book from the room and look up the address, and as he turned to walk
up the stairs, he heard the two of them behind him. He protested weakly that they didnt need to come up;
hed bring it down. But they feigned concern for his having to walk up and down the stairs and continued
to follow him.
The rest of the afternoon was filled with their arguments that they couldnt go to the Elizabethan until
the evening, so they should just hang out there in the air conditioning. It was punctuated between them
finding the .45 under his pillow along with his enormous Buck knife and thinking he was a psycho. It
followed on to drinking beer and him having sex with both of them. Finally, it ended with them trying to
rob him and a confrontation over their threat to accuse him of rape and his bluffing reply that he could just
as well tie them up and leave them on the salt flats. In a history of dumb choices, it was one of his top
contenders for most stupid.
For two days after the girls left, he continued to bum around and read. He watched TV and, finally
stuffed with all the reruns he could handle, he decided to force the issue of his job. He called Foley and was
told that a decision had been made about the office. Foley told Johnson he was free to come by on Tuesday.
He dressed in his best suit for the big interview. Foleys secretary sat at a desk outside Foleys office.
She was a mousey-looking woman who had an air of being very harassed, and Johnson sensed a good deal
of fear there also. Johnson announced himself, and she asked if he had an appointment. He explained the
situation, and she called Foley to tell him that Johnson was there. Her call was followed by a hushed
conversation during which she swiveled around in her chair to disguise the nature of the call.
Gerry is on a call and will be tied up for a bit. He asked me to introduce you to some brokers who you
can talk to until hes free. With that, she rose and led him into the interior of the office.
 Almost every street-level brokerage office has the same layout. There are offices of varying degrees of
privacy around the outside walls, and the center is filled with rows of cubicles made of chest-high partitions.
There were always one or two electronic boards on the wall that carried the market prices. The numbers
hissed by, creating a dull undertone of noise in the office. At one of the cubes, Foleys secretary stopped
and introduced the cubicle resident, Jim Gruenwald. Greetings and handshakes were exchanged, and
Johnson was seated in the only chair in the cube other than the one Jim was in.
It turned out that Gruenwald had graduated six months ago and was the newest broker in the office.
Johnson related the mess at his graduation and the irony of the motivational speaker trying to fire up a
bunch of newly unemployed brokers.
It was a big shock to all of us too, said Gruenwald. Were still waiting to hear whos taking over the
office. Blyth, Eastman is not interested in an office on the West Coast, and Dean Witter has offices all over
the place. A few of the brokers have left for other firms, but most of us are hanging around to hear what the
future is.
In the sales training classes at the training center, it had been drilled into their heads that the way to get
information from a prospective client was to get them to talk, and Johnson was particularly interested in
what Gruenwald had to say since he was right at the cutting edge, trying to develop a business. How has
business been since youve been here? he asked.
Its really tough with the markets being down and the problems with the firm, Jim replied. Besides,
I dont think Gerry likes me. He never gives me any help or leads or anything. Unless you have family
money to manage, its really hard to get started if you dont get help from the manager.
So what are you doing to generate business? There seems to be a lot of big houses around here and
lots of companies, so there should be people needing a broker.
No one wants to do business with a rookie, and without Foley helping me, its almost impossible to
get anyone on the phone. They didnt tell you this in training, but there are lots of people calling on all these
people, so its really hard. I try and try, but I get no results, and every day Gerry is breathing down my neck
and demanding that I get going to produce gross. Gross, gross, gross is all he cares about. I work and work,
but all he cares about is money! Jim was getting more and more excited, and Johnson was surprised that
such a nondescript person could generate that much anger.
The gross in Gruenwalds tirade was broker-speak for gross commissions. Gross was the measure
of a brokers worth. It was his identity in the office. It was a ranking system for favors and attention. It was,
in short, a brokers everything. A broker might fool himself into believing that his low gross was due to his
care for his clients. That would leave him morally superiorbut unemployed. Gross was ruthless but
efficient as a sorting mechanism made even more mercenary by the fact that the office manager shared in
the fruits of the brokers commissions. You had twenty-two days of the thirty in a month to generate gross
commissions, which was the raw material of your paycheck. At the end of twenty-two days, the clock rolled
back to zero, and the treadmill started again. One of Johnsons maxims started to form at this point that
would later be expressed as In the brokerage industry, youre only as good as your last ticket.
Gruenwald had turned away to take a phone call, from his wife from the sound of it, and Johnson was
left to contemplate the hum of the office. There was the noise of thirty or forty brokers going about the
daily practice of the business, along with the chatter of sales assistants and the whooshing of the tapes on
the back wall. When one was free of the need to make a living, the noise could be hypnotic, in a way, not
unlike the constant sound of distant running water.
Gruenwald returned to the conversation, continuing with his recitation of the poor conditions of the
office, the markets, the firm, and the impossibility of making a living. Johnson was not listening to what
hed now written off as steam being blown off, but he was tired of Jims constant stream of complaints of
how others were hurting him. He knew that he should not take what was being said seriously, but he couldnt
shake the feeling that Jim was right and this was going to be tough, tougher than Johnson had thought.
It was, in a way, a revelation. He didnt know what to expect in the real world of the brokerage business.
Hed so far been encased in the bubble of the training center and knew little of how brokers actually
operated. Hed come to the industry because he needed a job; no one else seemed to want him, and DuPuy
and Winston had, so his loyalty went to that firm. He felt that the firm had prepared them and that they
wouldnt send them out without the weaponry needed to succeed. So he stopped listening to Gruenwald
and engaged in the process of nodding his head and murmuring some sound of agreement. Gruenwald had
done one thing; hed stirred Johnsons constant companion, self-doubt. He was always second-guessing
himself and engaging in self-criticism.
The next broker was Mel Watts, a fiftyish, neatly dressed and groomed man with a clean, unaffected
smile and a welcoming manner. His voice was a well-modulated baritone with a tinge of an accent whose
origins Johnson couldnt place. Watts spoke slowly and carefully about his business, none of the gush of
complaint of Gruenwald. Hed been a broker for ten years, and he did a lot of business with senior citizens
and developed business largely through speaking engagements at various clubs and retirement
communities.
His vocal delivery reminded Johnson of the way Moody Mortensen spoke, colored as it was with word
pictures like fleas on a dog and mean as an alley cat. All in his appearance, vocal style, delivery, and
accent made him seem older, more knowledgeable, and comfortable. Finally, Johnson asked Watts about
working with Foley and Gruenwalds comments that without the managers help, ones chance of success
were minimal.
Watts considered the question for an overlong time and, never taking his eyes off Johnson, said, You
know that our business is what we make of it, not what some manager says or does. He paused, thoughtful
in his comments. The only equity we have is our book of clients, and you dont want to have that be
dependent on someone else.
In Homer, wisdom came from suffering. In other times and places, it comes from truth spoken well,
even if not understood by the listener. Johnson nodded in agreement in what he hoped was a thoughtful
way, but he didnt understand the value of what he was being told, and not wanting to appear stupid, he
didnt question Watts further. He was, however, struck with the fact that there was a lot he didnt know
about how the business was done on a philosophical level, and his unease increased further.
Foleys secretary rescued him from taking on any more wisdom, and he followed her back to Foleys
office. Foleys door was open, and as he entered the office, Foley was still on the phone, waving him in
with a huge smile on his face. Foleys office hit Johnson in the face. The entire thing was whitenot just
white, but blinding white; the only break in its snowy appearance were some pictures and art objects. After
Foley finished, they sat on the white leather couch, and Foley bellowed, Get me a cup of coffee! at the
frightened Susan, who scurried like a bolted rabbit to comply. God, what a couple of days Ive had, said
Foley rhetorically. Susan returned, half running, with the coffee in a white mug, Close the door on the way
out! said Foley. Johnson was struck by Foleys lack of courtesy.
Good to see you again, Phil. I know it has been rough not knowing what was happening, but weve
reached a deal with a firm, and youll be the first to know who it is! Foley paused, cueing Johnson for a
remark.
Great. Im sure its a great relief to you to have that decided.
Foleys crocodile smile got bigger, if possible. Johnson was sure Foleys face was going to rip off.
Were going to be an office of Loeb, Rhoades, said Foley, leaning forward with expectation as if Johnson
was supposed to leap up at the news.
Johnson blurted out, Who?
Loeb, Rhoades. Theyre one of the oldest firms on the street, and they have really big accounts. If you
had more experience, you wouldve heard of them. That call I was on when you came in was a prospect
Ive been chasing for a year, and when he found out we were going to Loeb, he said, You have my money!
Nice accountalmost a million bucks!
Johnson had the feeling the story was total bullshit, but hed seen enough egos to know not to challenge
Foley. Foley was just trying to impress him. So, when do you want me to start? asked Johnson.
Thats a problem. You see, Loeb is not one of those firms that takes on a lot of new brokers. Theyre
more interested in brokers who already have a book of business. I fought really hard for you, told them
about your war record and how I liked you, but they were firm. Johnson was struck with two feelings.
First, if hed been mentioned at all, it had been a secondary thing, not part of a good fight; and second, Phil
Johnson had just lost his second job in a month.
 Let me tell you something though, Phil. If you go out and work really hard, in a year or so, you come
back and Ill have a place for you, regardless of your gross. Foley had moved to his white desk chair and
sat back with the smile that comes when youre a mean bastard and youve just fucked someone over. Hed
see it again and again in the future from different people in his life, but his current navet led him to buy
it. He really believed that Foley was genuinely sorry he couldnt hire him and was serious about his coming
back. He was still learning that everyone on Wall Street lied; the fool was the person who believed them.
The lies werent the malicious ones of evil characters; after all, these men had wives, children, dogs, and
kitties and were upstanding members of the community. No, it wasnt to hurt anyone; it was in some cases
designed to foster hope, and in others, it was recognition of the harsh math of Wall Street. In February of
1974, Phillip Johnson wasnt a moneymaker. In fact, he was a money sink. And no one owed him a job.
He sat there in Foleys office like the penitent he was, and in his mind, a tape was running, just like the
ones at the back of the office. Instead of telling the price of GM stock, his was a recitation of his perceived
failures. Here he was, twenty-eight years old, $500 in his checking account and a few thousand in savings,
and $2,000 in unused credit on his precious Visa card. He had a car and two duffel bags of clothes, and he
was starting to suspect a venereal disease from his two stranger sex partners from the motel. Boy, the tapes
message read, what a great decision youve made, shithead.
He and Foley had been staring at each other, and due to the volume of thought racing through his brain,
it must have been minutes of mutual staring. Foley seemed unperturbed, a false smile plastered on his smug
face. He could be smug, thought Johnson, because he wasnt unemployed for the second time in as many
weeks. Listen, Phil, Foley went on, I have a lot to do with the announcement to the office. You really
were the first to know, even before the other brokers, so I have to get back to it. Here, Susan will show you
out. He stood and extended his hand in dismissal.
OK, Gerry, thanks for the consideration. Do you have any idea of offices that might be hiring? It was
a weak response, and he regretted it before it was finished. He was now showing this snake that he needed
help, and, true to form, Foley took advantage.
Phil, the snake hissed, if youre going to make it in this business, those are the questions you need
to answer yourself. No ones going to tell you where to find clients; you have to do that. Frankly, that type
of attitude is why theres no place at Loeb, Rhoades for you. He was still holding Johnsons hand as the
rebuke rolled out. Johnson had very strong hands and could easily exert 130 pounds of pressure. He thought
for a moment of crushing Foleys hand. Hed just received a dressing down of the first order. It wasnt a
professional flaw being pointed out by Foleys left index finger gesturing at his chest; it was a rebuke very
personal in nature and intent. It was mean-spirited, unkind, unnecessary, and made worse by the fact that
Johnson himself had handed Foley the opportunity to hurt him.
He stormed out of the office, not waiting for the whipped and driven Susan to escort him, resolving
hed never work for that son of a bitchever. He laid rubber in the first three gears of the Datsun as he
sped up Winchester toward the motel. He arrived there in a mood so foul it was almost a killing rage. People
got seriously hurt when he was like this. It was on his face and in his walk. Luckily, there were few people
around. Why should there be? All the decent people have jobs, he thought.
In the cool darkness of the room, he stood staring at the wall separating the bathroom from the rest of
the place. It smelled and looked like a motel: disinfectant and air freshener. There was nothing warm or
comfortable about it. It was a metaphor for his life, a structure filled with crapcrap furniture, crap
blankets, crap TV. Crap, crap, crap! That was his life. Always has been and always will be.
He entered the deadly spiral of viewing the past with todays feelings. From that vantage point, it was
easy to make his life seem worthless. His college achievements, three years on the deans listthree
semesters of which were with high honorsand being number one nationally on the Graduate Record Exam
his junior year; all that went out the window. The lives hed saved, his mastery of the most difficult type of
flightrotary wingand his mastery of field artillery, all gone. Hell, even being the only survivor of the
original eighteen, living through wounds requiring fourteen months of hospitalization, surviving six
shootdowns, all which fell into insignificance against the current crisis. What was worse was that rather
than using them as leavening for his distress, he denigrated them.
 Hed only passed flight school because of Dick Evanss tireless coaching and the fact that the army
needed pilots as bait. He couldnt even stay sober. It was the booze that allowed him to survive, not skill or
luck. It was a weakness. College? That was a joke. It had been ridiculously easy. In his mental state, it
wasnt that he was smart; his father had drummed into him that to attribute intelligence to yourself was
arrogance and conceit. Hed succeeded because others were stupid. Here he was, twenty-eight years old,
unemployed, and living in some crap motel room in a crappy town named after some wetback saint!
His self-flagellation only ended when hed whipped himself bloody. The anger was replaced with a
deep depression and shame at losing control. As he finished his litany of self-abuse, the familiar feeling in
his guts arrived. It went on for so long that he was rewarded with blood in his stool; he staggered to the bed
and collapsed.
He came awake to the afternoon sun slanting through the venetian blinds making patterns on the 1960s
shag rug; he could hear the Spanish jabbering of the maids as they finished work. He felt a bit better; at
least his guts werent doing inside loops around his abdomen. He felt washed out and stupid since hed
dumped all his electrolytes down the toilet.
He knew no one in San Jose or even Northern California, so he called Dianne and related in edited form
what had happened. There was no way hed admit his weakness to her. She suggested he look for a Reynolds
Securities office. They were taking over the DuPuy office in LA and seemed like a good firm. He agreed
that it would be a good idea but also told her that he was thinking about Dean Witter and Blyth, Eastman.
They chatted on in the meaningless talk of lovers and parted. He picked up the phone book, looked for
stockbrokers, and found there were five Dean Witter offices in the area but no Blyth, Eastman offices. He
decided to be a gypsy and move around until he found a job.
As he packed for the next phase of his journey, he wondered if what was happening was a harbinger of
future events, just like his first experience in Vietnam. Hed been up on a check ride with the instructor
pilot, and about an hour into the flight, the IPs nonresponse to his questions on the intercom led Johnson
to discover that the instructor was dead. Theyd taken ground fire, but Johnson was such a rookie, he didnt
even know they were being fired on; it was an ill omen of what the future would bring.
He checked out of the motel and was off.
 Chapter 17
The Glorious Twelfth
There were five Dean Witter offices in the area. He decided to start at the most northern of them. He worked
his way across San Jose to Highway 101 and headed in that direction. It was about noon and the traffic
wasnt terribly bad, but it took him about an hour to get to San Mateo and find the office. It was a two-
story, freestanding building of brown brick and wooden beams. On one of the beams, large, brass letters
proclaimed Dean Witter & Co. Inside, it was like the other brokerage offices: some private offices, some
semiprivate, and a lot of cubicles. Cigarette smoke curled up from some of the cubes, and the whole place
was filled with the undertone noise of the tapes running on the back wall and forty or more voices.
Hed met the manager, Hal Witten, once for a few minutes in LA during the closedown. Johnson was
really presuming a lot to think that Witten would remember him and that that meeting would impact a hiring
decision. He told the young woman at the front desk who he was and his purpose, adding that hed met
Witten before. After talking on the phone for a few minutes, she announced that Witten was busy, but the
office operations manager would see Johnson in a few minutes. After a few minutes, Janice, the operations
manager, arrived.
Mr. Johnson, Im Janice Overstreet, the operations manager, she said, extending her hand. Hal is
tied up in a meeting, but he remembers you from LA and asked me to have you talk to our sales manager
until he can see you.
The sales manager turned out to be sitting in one of the semiprivate offices along the outer walls. He
was in his mid to late thirties, blond, with red cheeks and a paunch that signaled a heavy drinker. The yellow
nicotine stain on his fingers announced him as a heavy smoker. When he spoke, smoke continued to exit
his mouth.
Steve Lansing had been in the business for fifteen years since his graduation from USC. He talked in a
low mumble with poor diction, so he was hard to understand, and Johnson had a difficult time hearing him
with the background noise.
Hearing loss develops slowly. Over time, a person learns different ways to adapt. In Johnsons case, he
used the obvious ones of turning up the volume on the car radio or television. He also learned to focus his
hearing on the voice he was supposed to listen to, and as he worked on the skill, he got pretty good at
differentiating one voice from another, even in a crowd.
He also had learned to lip-read. He was far from perfect at it, but it helped if he could see the lips move.
Sideburns, long hair, mustaches, and beards were the signs of the times, and marked a person as cool.
Mustaches and beards, however, limited the visibility of the speakers lips and took away Johnsons ability
to connect words, sounds, and lip movements.
He also had learned to do what hed call listening in context. Some words are easier to understand
because of the arrangement of vowels and consonants, and most sentences contained one or more of these
emphasized words. If he could hear those words, he could infer the meaning and direction of the sentences.
Accents and mispronunciation could make even the words with the hardest sounds unintelligible. That, of
course, was complicated by misuse of words.
He was using all the techniques to understand Lansing, who was vaporing on about the office and his
place in it. The man finished a sentence and took a break to puff his cigarette, so Johnson could finally get
a word in.
Whats it like to work for Mr. Witten?
Oh, Hal is a great guy. Smart, good salesman. He also is a Trojan. You here looking for a job?
Yeah, I was with DuPuy and Winston and was supposed to go to their office in San Jose, but that
office is being taken over by Loeb, Rhoades, and theres no place for me there.
Loeb is a real white-shoe firm. I didnt know they were even coming to the West Coast. Theyre a Jew
firm. It wasnt that Johnson had any issues with racist remarks, but the emphasis Lansing placed on the
phrase Jew firm made it clear that its usage wasnt descriptive but dismissive and demeaning. He said
nothing. Hal is a great guy, and hes really good at helping guys get started and keeping the office staffed
with good assistants to help out. Hes a tough boss and expects a lot from his brokers, but hes good
manager. Johnson was elated. It sounded like an ideal place for him, given what hed heard as complaints
from Gruenwald about Foleys lack of support for his brokers. So, tell me about what you did before you
went to DuPuy, asked Lansing.
Johnson went through the usual litany about his family, education, and military service, which lasted
about ten minutes. He noticed that during his recital, Lansing was constantly looking away at the screen of
his Quotron and occasionally typed something in. His attention was never totally fixed on Johnson, and he
wondered if that was something particular to Lansing or general to stockbrokers. He found it rude, but he
was in no position to insist on manners and etiquette.
After Johnson finished his soliloquy, Lansing turned back more fully toward him. Seems like you have
had a lot of crap thrown at you that should make you perfect for this business. His remark did nothing to
relieve the sense of worry Johnson had about his future. The problem with this office is that I dont think
theres any room for you here. You probably know we hired a couple of your classmates when DuPuy went
tits up, and Hal snagged a few more from other DuPuy offices as they were closing down or going to other
firms the brokers didnt want to work for. Johnsons heart began to sink again.
At this point, another woman came over to Lansings office. Steve looked up at her and said, Hi,
Nancy!
Johnson looked up, and the first thing of Nancy he saw was a very large set of boobs. She had curly,
brown hair and was dressed in a blouse that puckered at the buttons to reveal glimpses of her bra. Her skirt
was tight and short, and the whole package was spectacular. He also noticed that several of the brokers
sitting in the chest-high cubes had suddenly stood up with phones to their ears, and all of them were looking
toward Steves office and at Nancys well-displayed backside.
Nancy took charge of Johnson and walked him to the other side of the office. Johnson was smiling, a
rare thing for him, at the sight of the brokers at various places in the office popping up like prairie dogs as
Nancy passed. Like most men, they were ashamed of their obvious lustful looks, but their attempts to
disguise their staring only served to make the looks more obvious.
Wittens office was up a flight of stairs, so Johnson had the pleasure of watching Nancys skirt get
tighter over her butt as she moved up it, exposing more of her legs with each step.
Wittens office was mostly glass. He could see every part of the office from his perch and, of course,
see and hear anyone coming up the stairs. Nancys desk was positioned like a guard post outside the door
so that everyone had to go around it to get into Wittens office. Johnson noticed in passing that Nancys
desk didnt have a modesty panel.
Witten was in shirtsleeves and tie and jumped up from his desk as Johnson entered. Phil Johnson, good
to see you again. He beamed a smile over perfect teeth shining from a tanned face. I was really surprised
that you were here. I thought you were going to San Jose.
I was, replied Johnson, but that office is going to Loeb, Rhoades, and theres no place for me there.
Yeah, those Jew firms are pretty tight about hiring rookies, said Witten, the smile never leaving his
face. Johnson was now wondering if anti-Jewish sentiment was part and parcel of the business and whether
it was divided into Jew firms andhe guessed the correct word would be Gentile ones. Well, look, I dont
want to rain on your parade, but I dont have any room for you here. Were just full up. But I called Jim
Schmidt, the manager in Palo Alto, and hed like to see you this afternoon if you have time. Johnsons
hopes started to rise again. This guy was helping him, and after only a brief meeting. Maybe this wasnt
going to be such a bad business to work in after all.
Look, the office is on University Ave. in Palo Alto. Just go down 101 and get off at University going
toward Stanford, and youll see the office. The manager is Jim Schmidt. Great guy! Known him all my life!
Good luck to you.
Johnson retraced his route back to the freeway and headed south. He passed the streets and exits that,
over the future, would become as familiar to him as the car he drove. San Mateo Boulevard, Highway 84
or Woodside Road, Marsh Road, and finally University Avenue. He took the westbound exit on University,
and after a small commercial area, he passed through a residential area that had some really nice homes.
He finally found the office next to a Security Pacific Bank on the corner of University and Tasso. He made
the right turn and parked in the small lot in the back.
Jim Schmidt turned out to be a pleasant-looking older man with gray hair and honest face. He was
shorter than Johnson by several inches, and he walked with a forward lean from the waist. He had a smile
on his face that never went away. His handshake was firm, and as he shook Johnsons hand, his pale blue
eyes were fixed on Johnsons with a stare that was hard to break. Johnson knew immediately that he
couldnt break the stare it was a test, so he returned it with equal ferocity.
They sat in two chairs facing each other and began the interview. Schmidt was a sneaky interviewer.
Johnson was becoming an expert on interview techniques. Roy Ash had been full of himself, and, while
pleasant, wasnt really interested in the questions Johnson had asked, turning them into answers focusing
on his own accomplishments. Foley was just a shark. He would lie and exaggerate to get where he wanted
to be. Witten was fast and matter-of-fact, Johnson had evaluated, even though they only talked for a few
minutes. Schmidt was different. He didnt ask direct questions like, Why do you think you should work
here? or, Why would you be a good broker? or, How would you go about getting customers? Instead,
he asked about his car and his drive from LA, his experiences with DuPuy and Winston, how he came to
be in the brokerage business, and other indirect questions. Johnson found out that Schmidt had been a B-
25 bomber pilot in World War II, which surprised him, because Schmidt didnt look old enough.
They talked for about forty-five minutes, and then Schmidt asked where Johnson was living. Schmidt
then said, Phil, Im impressed, and I have a couple of offices open, so Im willing to offer you a place here
if you want it. Well start you off with a salary versus draw of three thousand per month for a year. Johnson
was floored. The idea of making $36,000 per year was beyond his wildest dreams. Hed made $695 per
month at DuPuy and Winston, and that was a pay cut from his $1,200 per month in the army. He wondered
what hed do with the money.
Schmidt gave him the name of some motels in the area and told him he could start the next Monday.
That would give Johnson five days to wait. Johnson felt that he needed to tell Schmidt that he didnt know
if hed passed the registration test, but Schmidt seemed unworried. He said hed talk to the training director
and that Johnson would have to go to some training classes, so registration wouldnt be an issue for a week
or so.
The training director told Schmidt to have Johnson report the next day, so instead of another five-day
vacation, Johnson started work immediately. Johnson went out walking on air. He was employed! He was
making a lot of money, and he was ready to start his future. For the next week, he commuted from his
almost-fleabag motel to San Francisco, and on his way back, hed stop at the office and check in. His
comings and goings seemed unremarkable. At the end of the week, he was told by the training director that
he was finished and that he could report back to the office to await his registration. Johnson could be very
headstrong, and he didnt like to wait for things, because when he waited with uncertainty, it made him
jumpy, depressed, and worried. So, on Friday, he called the Exchange directly.
It took a lot of time and a lot of quarters in a pay phone, but he finally found out hed passed the test.
Feeling really good about himself, which occurred rarely for him, he drove down to Palo Alto and his motel.
He had no one to tell. Dianne, of course, but his parents probably already thought hed passed, and his
brother couldnt have cared less. It was the nature of his family not to be close or constantly babbling to
each other over every little accomplishment or happening.
He spent the weekend getting a picture of his new hometown. Mostly, it lay between the Bayshore
Freeway and the Stanford University Campus. In front of the campus and at the west end of the business
district was El Camino Real, which linked all of California. He noticed all the normal stuff like the bars,
restaurants, barbershops, drugstores, and supermarkets. There was no shortage of services, it seemed. He
did need to solve two problems: where to live permanently, and where he was going to park his car.
In 1974, the stock market opened at 10:00 a.m. in New York, which of course was 7:00 a.m. in
California, or the coast as it was called by the Easterners. On what was literally the first day of the rest
of his life, he obeyed a primary mental command to be at work five minutes before the appointed time. He
actually arrived fifteen minutes early. He soon realized that one of the first advantages of being up at odark
hundred was that no one else, especially the college students, was stirring, so parking on the streets was
abundant.
He walked around the block and noticed a Merrill Lynch office down the street and a Bache office
across Tasso to the west. He was loafing around just before 7:00 a.m. when he noticed a woman opening
the back door of the office. He raced to intercept her and failed, so he knocked on the door. She turned and
yelled, Were not open! and walked away into the darkness of the office. Here he was, ready to move and
shake the financial world, to master all that lay before him, and he couldnt even get into the office! As he
was standing there in his frustration, a smallish man in a gray suit appeared. Can I help you? he asked
with a bemused smile, like it was an everyday occurrence to find a man dressed in a suit, standing in a
parking lot in the middle of a small California town, while all sane people were still home snuggling in bed.
Johnson introduced himself, and the other man identified himself as Jim Crowley. Crowley knocked
on the door, and the same woman who had blown Johnson off appeared and opened the door for Crowley.
Whos this? she asked, with a finger pointing at Johnsons chest. She was small, with the look of someone
who was short on education and kindness, long on suffering and bad experience, and not given to good
manners.
New broker, I guess, was Crowleys response as he wandered off and the woman returned to whatever
she was doing, leaving Johnson standing there. The lights came on, and another woman was let in by the
front door. Crowley reappeared with a bunch of paper in crosswise stacks to keep documents separate. I
forgot your name. Come over here. Since youre here, you may as well help, said Crowley.
Crowley explained that every day, one broker was designated as the man of the day. That brokers job
was to open the office and get all the wires and messages that had arrived overnight onto a series of
clipboards. Johnson, being organized, asked if there was a particular order they should be in, and Crowley
replied that no one read them anyway, so who cared? Finally, the man of the day was responsible for the
most critical task in an office where people arrived earlyhe got the coffee started.
Jim Schmidt arrived at 7:30 a.m. and took Johnson in hand. They talked in Schmidts office, and
Johnson got a lead on an apartment building a few blocks away that had a vacancy. Since it was Monday,
there was a morning sales meeting at 8:00 a.m. Schmidt and Johnson walked into the conference room, and
Johnson was formally introduced. Johnson grew embarrassed with the introduction as Schmidt seemed to
go on and on. The meeting was mostly unintelligible to Johnson, but twenty minutes later, he and Jim were
standing in a cubicle that would be the base of his future financial empire.
He spent the next two hours filling out forms for tax withholding, insurance coverage, and emergency
notification information. He found the bathroom and the office supplies and equipped his cube. Finally, he
took out of the cheap, battered briefcase he carried the most important piece of equipment he owned: a
round shaving mirror. During the training class, Johnson had discovered good things about himself and bad
things. He tended to focus on the bad things. Hed found that he was given to an uneven expression of
emotions. When Johnson was mad, there was no doubt about ithis anger could be monumental. When he
was sad, he showed his emotions in lethargy, a giving-up attitude, and a refusal to smile. He could quickly
go from sad to mad if someone persisted in trying to get him to stop being sad. He repressed emotion during
the few times he was ever happy. He believed that showing happiness was unfair, because his happiness
might be the result of someone elses unhappiness.
The two premier sales trainers at the training center had watched Johnson deliver his laboriously,
completely researched, fact-centered sales pitches and recommended that he place a mirror in front of
himself and watch his face as he presented. They explained that, for all its electronic aspects, the telephone
was the most sensitive instrument at conveying emotion. Johnson thought it was utter bullshit, but Wally
Ouch and George Bates had been two of the biggest producers in DuPuy and Winston, so perhaps they were
worth listening to. Damned if it didnt work! With the mirror, he could see his face change as he met
rejection, and that led him to listen for the subtle changes in inflection that indicated to the person on the
other end of the phone a slacking of energy. Soon, the mirror was his constant companion.
As he was contemplating his new surroundings, he heard a voice greeting all the other members of the
office. With the arrangement of chest-high cubicles, when something of note happened, people would do
their popping up and down like prairie dogs looking around. At the sound of the voice, Johnson prairie-
dogged for the first time. As fortune would have it, the greeter walked into the cube next to Johnsons. Im
Dave Kerr, said the greeter, extending his hand over the top of the cube walls.
Im Phil Johnson.
Then Kerr ended the conversation with the usual, meaningless, If you need anything, let me know,
and sat down. Johnson had been dismissed.
Since he had nothing else to do, he decided to further explore his new workplace. He found some books
in the front of the office. One set was of Polk City Directories, another of Colliers Encyclopedia, another
labeled Corporate Records, and finally a set of Standard and Poors guides. He was looking at the books
when Jim Schmidt came and asked how he was doing. In an unguarded moment, Johnson said, Jim, where
do I get a list of potential clients?
Schmidt seemed taken aback like no one had ever asked the question before, and perhaps it was unique.
Like the highly trained salesman he was, Schmidt disguised his surprise by repeating the question to gain
time to find an answer. What do you mean, where do you get the names?
I dont know anyone in the area. I dont have any family accounts, and in all the training, no one ever
talked about finding the names to call.
Schmidt blinked a few times, his ever-present smile never wavering, and then he picked up the phone
and talked to someone named Tom. A few minutes later, a man about five foot seven with blond hair and
reddish tone to his face walked in with an air of assurance and confidence. Tom, started Schmidt, this is
Phil Johnson. This is his first day, and he has an interesting question. Since youre still building your
business, I thought you could answer it for him.
They walked back to Toms cube, and Johnson told Tom, whose last name was Moors, his question,
and for the second time, someone seemed nonplussed.
Tom began, OK, look, regardless of all the bullshit they say in training, being a stockbroker is
essentially a sales job. The firm never gives you any hint of how to find customers; they assume that youll
somehow find them and that a good salesman is self-starting and sustaining. Tom stopped to crush out his
cigarette. In some sales jobs, there are territories, and the product determines whos a potential customer.
In this business, anyone with any money is a potential customer, so the list youre looking for is really the
population of the world. Crap, thought Johnson as his stomach began to sink, Not only do I have to sell
stuff, I have to figure out if they have any money! What a bitch! Look, Phil, Tom continued, in the
beginning, this is a sheer numbers game. You act like a shotgun. You just call everyone, and if you call
enough people for long enough, youll find people who will do business with you.
So, whats the ratio of calls to customers? asked Johnson, already knowing he wouldnt like the
answer.
In a level tone and with constant eye contact, Moors continued, You call about a hundred people a
day, and thirty-five will talk to you. About five or six will be prospects, and out of that, two will become
customers and one will be a client.
The enormity of what he was attempting hit him like a ton of bricks. He hated the telephone. He was
introverted and he hated the idea of calling total strangers, and now hed committed himself to calling a
hundred strangers a day. The terror he was feeling should have given him pause, but what he was hearing
was dangerous, and it drew him in to find out what the full details were.
How long do you have to do that? he asked.

Moors reply added more terror. You never stop. Youll lose about ten to fifteen percent of your clients
each year to death, moving, getting pissed off at you, and other things. So, just to stand still, you have to
replace fifteen percent of the clients. Then you have to get more and bigger customers so youre gross will
rise. Remember, its not just new clients; you have to keep the old ones producing at least as much as last
year, and hopefully more. Ive been doing this for five years, working sometimes evenings and coming in
on weekends, and Im always looking for someone who might be a customer. Moors stubbed out the third
cigarette hed smoked during his soliloquy.
Johnsons gray matter was spinning as he said, If everyone in the office is calling a hundred people a
day, or even thirty-five, and theyre doing it five days a week, there arent enough people in the world!
 Right, Moors said, lighting another cancer stick. And that, my dear sir, gets us to the second part of
the problem.
Johnson knew he didnt have his head around the first part of the problem, and now he had to consider
a second part. He was ready to slice his wrists. He didnt really want the answer to the question, but he
asked anyway. Whats the second part?
Moors obliged. Everybody who has money has either been called, will be called soon, or has found a
way not to be called. The other thing is that about half the people around hereor anywhere, which he
demonstrated by waving his arms in a rough circle, dont have any money or are useless as clients. The
markets have been bad for a long time, and people are unhappy with brokers. There are a group of people
who can and will invest, and theyre getting a ton of calls. You can call them. Some will connect with you
but not with me, or the other way around. This is a very personal business, and people make decisions about
their broker for personality reasons.
And the most useless ones out there are niggers, came a voice above and to the left. There are some
words that have a shock effect and a gut-level harshness, regardless of how many times theyre used. Even
in the relatively unconscious 1970s and after years in the military with rednecks and other racists, the word
shocked Johnson. The shock effect was heightened by the surprise of it breaking Johnsons concentration
on the complexity of what Moors was laying out.
Johnson looked to his left and was greeted by a protruding belly. The pants and belt were under the
belly, and the striped shirt gapped open at the last two buttons before the belt, showing a pasty, semihairy
skin. As Johnsons gaze moved upward, he found a glabrous face, well shaved and wearing black-rimmed
glasses. The hair was curly and starting to salt and pepper.
And if the niggers werent bad enough, theres the spics and beaners, and they all just want to steal
from you.
Johnson was truly amazed that this language was being spouted and asked, Are you serious?
Yeah, Im serious. By the way, Im Steve Litton. Welcome to the office.
Phil Johnson, he said, sticking out his hand. Glad to meet you. It came out reluctantly in a tone that
said, I have to say that because its social convention, but get the fuck away from me, you fat, racist pig.
At this point, a tall man with black hair slicked straight back from his forehead and semiclear-framed
glasses walked over. Moors and Litton tightened up and got more official. OK, you two, dont scare the
crap out of the rookie. Its his first day, after all. Besides, you both could do a few more calls today, given
the level of your gross.
Johnson could be incredibly stupid when it came to human interaction, but he recognized that this guy
was probably the assistant office manager, who usually had two jobs: one to be the sales manager and whip
and drive the brokers, and the second to be the office hatchet man. He was no ones friend except his own,
since the only reason he took the job was to aggrandize himself as a step toward actual manager and being
able to benefit from his offices gross production.
Moors, in a wonderful display of disrespect, blew cigarette smoke in the general direction of the sales
manager as he explained that he, Moors, was doing Jim Schmidts bidding, and Litton protested that he,
Litton, had come over to give Johnson some prospect sheets.
Phil thanked Moors and got up and started back to his cube, with Litton behind him. Litton told him
that the prospect sheets might not do any good, but hed been unable to crack them, so Johnson might as
well try. He also told Johnson that a good way to build business was to be man of the day. Litton explained
that for most of the guys in the office, man of the day or the duty was a pain in the ass, and that if Johnson
would volunteer to take the duty for any period the other brokers didnt want it, he could get some good
accounts. The duty man fielded all the calls for brokers who were out of the office and, most importantly,
from people who needed brokers and were therefore potential clients.
He finished the day by going to the Palo Alto police station to get fingerprinted so that the company
could check to see if he had a criminal record. The irony wasnt lost on him that they were checking after
he was hired instead of before. He wasnt worried; he was sure Moodys sleuths had pretty well plowed up
his background already.
 He went back to his motel room, his head swimming with the grim reality of what hed learned, and as
was usual for him, he began to focus not on the opportunity it presented or the chance to be different and
crack the code, but on the difficulties and problems of surmounting the sheer challenge. Nothing hed ever
done in his life was preparation for this; the closest was the charity drive, and hed lied and cheated his way
through that. His confidence sank lower with each hour of a night filled with uneasy sleep, and in the dark
morning hours, he wondered if he should quit. But the answer was the same as with all the other times hed
contemplated quitting. What else would he do?
The mental alarm clock in his head woke him at 5:00 a.m. after what could only have been two hours
sleep. He was dressed by six, and since that left him an hour before he needed to get to the office, he turned
on the local news. The instructors at the training center had told him that keeping up with the local news
was a good way to be able to start and maintain conversations with potential investors. He really couldnt
understand how so many people could be so perky so early in the day, but then, most of them had had a
good nights sleep, he bet. All the news seemed to be focused on the war in Southeast Asia and the death
throes of South Vietnamoh, and homosexuals.
He went to the office early, and one of the women let him in. There wasnt much to do, as it was far
too early to call anyone on the West Coast. So he spent some time with the manual for the Quotron and
finally figured it out. He had no reason to use it, but he could justify the waste of time as being useful
eventually. People started to arrive for another day of moneymaking accompanied by rude jokes and smart
remarks, and slowly, the noise of the money business rose around the office.
Hed noticed that some of the leads Litton had given him were in the Midwest or in the East. He had
nothing else to do while he waited for it to get later, so he picked a sheet with a New York address at random
and dialed the number. The phone was almost instantly answered with a nasty-sounding womans voice.
What?
Whos this? he asked, the speed of the answer destroying all his confidence.
Your mother teach you to start a conversation like that? There was the sound of machinery in the
background. What do you want? You must be the rookie. You have to dial one to get an outside line and
then the area code and the number. You called the wire room. The phone went dead.
He sat there with the phone in his hand, anger rising in him and telling him to go and confront the wire
operator, but he realized that it was mostly anger at himself stemming from embarrassment, and the anger
faded. He started again. One and then the area code and the number. He waited in anticipation as the circuits,
switches, and wires dropped into place, and he was finally rewarded with a ringing number and fear. He
had no idea of what hed say if someone answered! He was rescued by a recording telling him the number
wasnt in service.
Hed heard that brokers sometimes had prewritten scripts they used, either ones they wrote themselves
or that had come from some other source. He decided he needed one of those. As he thought about it for a
minute, one of the other guys in the office walked over. Hi, Im Joe Ried, he said, extending his hand. I
sit over by the back door. Just wanted to say hello and welcome you to the office. Anything you need, ask.
I might not be able to help, but I might be able to direct you to the right place.
Nice to meet you, Joe, Im Phil Johnson. Its funny you mention needing something. I was just about
to make my first cold call and I realized that I dont even know what to say. Do any of you use scripts?
Yeah, I guess we all did at one time. The best thing is not to sell anything on the first call. Just introduce
yourself and see if they have any interest in investments. Youll do better if you write your own scripts,
was Joes response.
Johnson thanked Joe, took out his yellow tablet, and began to write what hed say. He wrote and wrote
and began to realize that what he wrote was different from the way he spoke. A sentence on paper was
constructed differently and the words were in different places because there wouldnt be any visual cues to
guide the reader. In speaking, usually the parties were able to see each other and respond to the inflections
of their voices and facial expressions. To hear a word was different from reading it, and as he wrote, he
began to realize that his writing sounded stilted and formal.
The writing exercise did accomplish one thing: it helped him form the idea he wanted to convey. But
he realized that he needed something else. He then reached back to something hed almost forgotten. One
of the exercises that Moody had subjected them all to was joining a Toastmasters International chapter in
LA.
Toastmasters is a club focused on public speaking. Moody came to understand that while most of the
trainees were competent in most of what they did, many of them had no experience in speaking before a
group. Most people are more afraid of speaking in public than of death. Toastmasters overcame this by
having meetings of small groups and requiring each member to respond to a question in an extemporaneous
way. At various times, each member was also required to prepare a formal speech. The other members of
the club would critique both the extemporaneous speech and the formal speech.
Johnson had never done well with the formal speeches, but he excelled at the ad hoc ones. He seemed
to have an ability to call up information and facts and put them in a logical order without a lot of thought.
Over the years, the reading he used to escape from the cruelty of the world had stuffed his brain with facts
and knowledge that seemed useless. However, when he was pressed, he could dredge up the dimly
remembered facts and use them to illustrate. His memory was large, and he could remember stories and
jokes forever. During that time, hed started to have confidence that he might have the one thing hed
admired in others but of which he thought he was bereft: a gift.
Everyone (or at least the great majority) of people could talk, but only a few were known as great
orators. All people could run and with training run well, but only the gifted could become Jim Ryan or Glen
Carpenter. Hed been an acceptable pilot, but he wasnt gifted the way Mad Dog Riedel or Dick Evans had
been. He never thought of himself as gifted in any way. Part of his upbringing had been to suppress his
arrogance and self-importance, and most of his education had mainstreamed and was not given to
recognizing individual excellence. His first taste individual attention leading to individual excellence was
in college. He could do most things, but he never thought of himself as having any special talents and
capacities.
As he wrote and thought, he decided that he could do without a formal script as long as he had a general
idea of what he wanted to say. So he decided to just get a base idea and then wing it. Hed just go with the
flow of the conversation. Now that hed accomplished the task of figuring out what to say, he had to
overcome a problem that he never thought he would have again: visceral fear.
Fear had been always been present in his life, stronger at some times than at others. It was a great killer,
because it acted to stop him from doing things that he believed would turn out badly. Most of the time that
he was fearful, it wasnt of physical hurt or even death; it was of being embarrassed or made a fool of. In
cases where the fear was attached to physical danger, hed been able to overcome the natural resistance to
the action. That was the definition of courage: acting in the face of fear.
It was in the psychological area that he lacked courage. Like a lot of people, for him the fear of personal
rejection was one of those things that ranked high on the continuum. Most people dont like to be rejected,
and calling total strangers and asking them to trust you enough to give you their money made rejection
and multiple rejections, at thata certainty. Johnson was more sensitive to personal rejection than most.
So, here he was, placing himself in a position to confront one of his most unexamined fears, and the
one that had the most potential to hurt him deeply.
At this point, in one of those juxtapositions that makes worlds move, Jim Schmidt walked up. Hi, Phil,
how are you getting along?
Im just getting started, Jim. Im having a hard time getting up the courage to make a cold call. He
was being frank with his boss in a burst of innocence that most wouldve thought stupid, as it demonstrated
weakness.
Its tough doing it, but there are a couple of things to remember. Theyre not rejecting you personally,
just the idea of what you represent. And theyre no tougher than the Viet Cong.
Schmidt bustled off in his always-rushed walk, and Johnson thought about what hed said. He was
right. No one was tougher than the Cong. What could the prospects do to him? He picked up the phone with
a renewed sense of vigor, strengthened by the encouragement of Schmidts comments.
Before he dialed for his first target, he took a piece of paper and wrote down the date: February 12,
1974; the time, 9:46 a.m.; and the level of the Dow Jones811.72for posterity. He then picked up the
phone and dialed the number for a John Edson at Hewlett Packard. He was grateful when the general
operator answered, as it gave him more time to collect himself. He asked for Edson, and there was a pause
as she looked up the extension. She gave him the extension number and connected the call.
After a few minutes, a tenor male voice answered, John Edson. It was game time. He was in contact
with the enemy.
Mr. Edson, this is Phil Johnson at Dean Witter in Palo Alto. I was calling today to introduce myself
and the firm and see if we might be able to help you with your investment needs. There, hed done it. Hed
made the call, and now he was really in the game. All that had come before was dross, and all that was to
come was real. This was, in the words of the hippies, the first day of the rest of his life. It would always be,
for him, the glorious twelfth, because it was the day of his first cold call and the day hed overcome one of
his greatest fears.
 Chapter 18
The Years Unwind
After Johnson got his start, he settled down into the constant repetition that is the brokers life. Often, he
came up against barriers imposed by prospects and clients, but also the unwritten structure of the business.
The first, almost the iron rule, was that the office ran on a strict hierarchy based on a primary and secondary
quality. The primary one was gross commissions. He came to realize that if you did enough gross
commissions, you could show up every day dripping with the blood of the innocent, and the firm would
just hand you a towel. Higher gross translated into better offices, more ego stroking, and perhaps most
important, more power. Johnson found out very quickly that in gross commission, size matteredhugely.
The second quality was time. The longer youd been around, the more respect you gotif for no other
reason than everyone assumed if youd survived as long as you had, you either had a secret or were nuts to
take the pounding for that many years. Johnson realized that in the investment world, age and experience
supposedly made a person wise and skilled. This assumption wasnt based on any fact; it was just assumed
that if you lasted, you were smart and skilled.
Johnson observed that there seemed to be four layers of brokers: the big producers, the older guys who
had been there a long time but werent the biggest producers, the guys who had been there awhile and were
headed either upward or downward in gross, and finally the rookies. Like a second lieutenant in the army
or a college freshman, a rookie was almost the lowest form of animal life. You were a rookie until someone
came in who was newer at the business than you.
Johnson had always been a great observer of how the systems that surrounded him worked. He early
on came to understand that true friendship between brokers was even rarer than in the nonparochial world.
They worked side by side, day in and day out, passing jokes and stories, commenting on the short skirt the
new account clerk was wearing, but they rarely saw each other outside of the office. The relationship was
more strong acquaintance than anything else. There were guys who shared likes and dislikes, political,
social, and behavioral. Over the years, they provided a stream of pseudo wisdom and true insights that
would be valuable over time.
Often, the attachments were strange. In any other environment, Johnson wouldve found Steve Litton
repellent. He was fat, nasty, racist, and disrespectful, and he had a love for pornography. But he was also
wise, iconoclastic, good with his clients, and overall generous, with well-meaning advice and tips.
There were the Witters Witnesses. Each Friday, they would take their lunch together in the conference
room, and for an hour, they would read from the Bible, pray, give testimony, and even sing. Several of them
were among the biggest gross producers in the office; a couple were rookies. But Christian fellowship
trumped the caste system, at least for an hour a week.
The leader of this band of missionaries was a senior guy named Bill Russell. Bills office was right next
to the manager, a power office. He walked around with that half smile seen on those who were self-satisfied
or believed they were on a better path. Russell and Litton had been on a collision course for years. Litton
was openly and vocally dismissive of the Christians, and Russell was an evangelist. Litton was a
nonpracticing Jew, and Russell saw him as a lump of clay he could mold.
One day, Litton was standing and reading something on the clipboards in front of his cube, and Russell
came up with a bunch of new wires to be put on the boards. Hi, Steve, will you join us on Friday at our
group downstairs?
No, Bill, I value my time more highly.
Well, you know the guys who go to our group have the fastest gross-commission growth in the office.
If you came, you might find the secret to break out of the plateau you seem to be on. This was intended as
a dig at Litton, designed to create guilt and desperation to do better and chase the almighty gross. The irony
of Russells Christian belief in money as the root of evil and his use of faith in the pursuit of gross
commissions was instantly apparent to Johnson, if not to Russell.
Bill, I go to my own church, and Im happy there, replied Litton
Russell fell into the trap. What church is that?
 I go to the Pussy Cat Theater church, was Littons reply, the Pussy Cat being the local porn theater.
Russell was silent, but Litton drove in further. Ill go to your group downstairs if youll go to my church.
Russell was clearly unsure of how to respond. His missionary duty burned in him and he wanted to
convert Litton, but the available method for obligating Litton was a sinful pursuit. Finally, he summed up
his faith: Im not going to commit sin to do the Lords work, and he turned and walked off.
Johnson had to admit he admired both Litton and Russell. Litton had been nasty and sarcastic but
creative enough to posit a condition he knew Russell couldnt accept and which would get him off Littons
back. Johnson admired Russell because hed demonstrated an integrated system of morality and personal
belief.
About three months after Johnson joined the office, Jim Schmidt was transferred. There were a lot of
condolences and good-byes, many of them sincere, as Jim was a good guy, a gentleman of an older form,
and well liked. Most discussions about this, however, focused on the future and who the new manager
would be.
The office manager was a critical cog in the wheel because he set the tone and direction. He also
dispensed favors. Sometimes with compassion. The gasoline in Wall Streets tank is rumor, and in this case,
the tank was full. They were closing Palo Alto to merge it with Menlo Park. He never figured out who
they were, but he imagined them to be very busy in some office someplace, inventing barely plausible
rumors and pulling levers that sent the rumors skating into the vacuous brains of brokers.
About two weeks before Jim was to leave, Dick Quitland, the tall, slick guy who had confronted Moors,
Litton, and Johnson on his first day, was named manager of an office in Coeur DAlene, Idaho. This was
OK with Johnson, because he thought Dick was a very suitable name for the guy; Dick was a real prick.
Johnson found out later that the move wasnt a promotion. Apparently, Johnson was getting better at
recognizing personality traits, because no one else liked Dick either.
The new manager would be Steve Miller, who just happened to be the son of the current president of
the firm. Naturally, all the talk started about how he was just a rich daddys boy who knew nothing. Johnson
knew better. Hed talked to Steve Lansing in San Mateo, who had told him Miller was young, aggressive,
a big producer from accounts he built himself, and best of all, according to Lansing, he was a USC graduate.
Johnsons request to be man of the day had borne fruit. He opened the door one morning to find all the
lights on and someone sitting in the managers office. Johnson ignored him and started his rounds. After
hed gotten all the wires out, the tapes running, and, the coffee started, he was cutting the endless ribbon of
paper from the Dow Jones news ticker that had accumulated overnight.
Got the duty today, huh?
Yeah, Johnson replied without looking up.
Im Steve Miller, the new manager, the other man said. Miller had a fine, open face with neatly
combed pale-blond hair. He was about six foot one and about 220 pounds, Johnson guessed. There was no
pretension. He was dressed in the standard uniform: white shirt, striped tie, and gray-striped pants. His
voice was strong, in the tenor range, but with a timbre and quality that gave it an aura of command. It was
a voice that, heard among many, you wouldnt have to strain to hear. Youre the rookie, Miller said
matter-of-factly.
Actually, there are two guys newer than me here now, so Im technically not a rookie, Johnson said
but instantly regretted it.
I like rookies, Miller said. Theyre the only excitement in offices, and theyre the future, so I
encourage them all I can.
They partedJohnson to finish his work, and Miller to do whatever it was that managers did at 6:00
a.m.
The first weekend after hed gotten his license, Johnson had fired up the 240Z and made it to LA in just
under five hours. I-5 down the throat of California is a beautiful road for a high-performance car and some
maniac to drive it. He showed up at Diannes apartment early Saturday and asked her to marry him. He was
accepted.
This started a whirlwind of excitement, as Dianne had already found a place she wanted to be married
in and it was only available one day in May. Being the guy that he was, he did the honorable thing and took
Diannes parents out to dinner, and when Dianne and her mother went to the bathroom, he asked her father
for permission to marry his daughter. He was strangely afraid of the question and the response.
It had taken a lot of courage for him to ask Dianne, since he had some fear that she might have come
to her senses and discovered that he really was a jerk. His fear of her LA policeman father was more
physical. Diannes father had a reputation as a very hard-assed beat cop. Johnsons fear level rose when the
butt of the mans revolver protruded from his suit coat.
Hed driven back to Palo Alto Sunday night and found that his workload had increased. In addition to
calling total strangers and going to Chamber of Commerce and Toastmasters meetings looking for clients,
he was now fielding incoming calls from his fiance, her endless supply of relatives, and his own family.
There was one other obligation he hadnt anticipated.
Diannes family was Catholicand not just Catholic, but Roman Catholic. Diannes mother was a
convert, and, like many converts, a fanatic. She had pictures of the pope everywhere, and if there wasnt a
pope portrait, there was a crucifix. She even had the family photos arranged in a cruciform pattern. Her
conversation was liberally sprinkled with references to God and Jesus and the Bible and venial and mortal
sin. It was hard to listen to her, given the fact that she was also uneducated and gave the English language
a working over worthy of a Mafia hit man.
Diannes family moaned and groaned about the fact that since Johnson wasnt Catholic, the ceremony
wouldnt be a Mass, but they were insistent that a priest preside. Johnsons father, the Colonel, was about
as anti-Catholic as they came and suggested in his usual, forceful, I-will-be-heard-and-obeyed way that the
wedding use a joint officiator with a Protestant minister. The tears, wailing, and gnashing of teeth that
greeted the suggestion were so intense that Johnson quietly dropped the matter. He had to pick his battles,
and this was one he was going to lose.
Johnson had to take instruction in the Catholic faith and promise to raise any children as Catholic. It
turned out that this was very serious stuff, and after consulting with their priest in LA, it was pronounced
that he could be instructed at a Catholic church in Palo Alto rather than having to come to LA. So, dutifully,
he called the local parish and made an appointment for instruction.
Hed expected some Bible-pounding, evangelical, fault-finding session seeking his conversion. But his
Jesuit instructor let him know that he thought the whole thing was bunk and the next five sessions would
go better if they had some refreshment of the cabernet-sauvignon variety.
The most useless things at a wedding are the grooms father and the groom himself. Weddings are all
about women and womens stuff. The groom performed flawlessly if he did three things: showed up (and
was sober enough to stand up through the ceremony), danced with his new wife and her mother, and drove
the getaway car. Other than that, no input was accepted. It was surely solicited, but never, ever heeded.
The wedding was full of mistakes and miscues. His father got lost on the way to the reception and
ended up in some garbage dump. Hed heedlessly sent a wedding invitation to T. J., never expecting that
shed show up, but she did and attracted all the womens spite and all the mens lust.
One of Diannes myriad family members, despite Johnsons express wishes, had brought young
children. They began to act like children, which was OK, but they were in competition with Diannes
brothers and sisters. One of the youngsters was drinking leftover drinks and tossed his cookies on the dance
floor. Johnson frankly couldnt wait to get out of there, not for the sex of the honeymoon, but just to be
away from the insufferable gang. For him, freedom was merely being outside.
He came back to work with nothing on the books. So, at the end of May, he was in the hole to Dean
Witter for another $3,000. Since hed never produced enough commission to cover his draw, he owed a
total of $12,000, a staggering sum. The only good thing about the whole deal was that Dianne had quickly
found a job with Reynolds Securities in their Palo Alto office, so there was money coming in.
The thought of being that far in the hole to anyone was overpowering. He fixated on it and the possible
results. If he didnt produce, hed get fired. If he stayed and didnt produce enough commissions, hed go
further into the hole. I can never get out. Im going to fail again. No one wants to talk to me. Im a total
loser. Its just a matter of time until it becomes apparent. He spiraled down and down into a more and more
depressed state. He grew surly and snappish with everyone, including Dianne.
 The demon of his mind, PTSD, began to show up in the form of a powerful desire to drink- a lot. He
startled easily, couldnt focus; anger swept him like a rain squall. He could feel moment by moment the
trapezius muscles of his neck and the rhomboids of his back grow tight and begin to hurt. As the muscles
tightened, he compensated by moving his head forward, and his shoulders curved around. Combined with
his physical appearance, the look on his faceangry, fierce, cold eyes darting aroundwas menacing.
Finally, one day he was walking down the street as one of the other guys was coming the other way.
Johnson tried to avoid him, but the other fellow wasnt to be denied. Come with me, he said.
For some reason, Johnson obeyed and followed him to a small restaurant under the building next door.
They ordered drinks and sat down.
OK, asshole, whats the problem? You look like you lost your best friend or your dog died. Don
Littles desk was on the far side of the office, with a window looking out on Tasso Street. He was fairly
senior, and while not one of the top producers, he had a reputation as being solid and consistent and someone
who didnt make a lot of trouble. He was about six foot seven inches and thin, like the basketball player he
once had been. He had a narrow face with a very prominent nose.
I havent made my draw since Ive been here, I am twelve grand in the hole. No one wants to talk to
me, and Im afraid Im going to get fired. On top of that, I just got married.
Well, getting married will really fuck you up, said Don. I dont think you have to be worried about
being fired. They dont expect you to make your draw for the first six months anyway. This is the worst
bear market weve had in years, and everyone is having a hard time.
They arent going to let me just go on running up debt. Ill never be able to repay it as it gets larger. I
may as well quit now and get it over with, replied Johnson.
Yeah, that would be one solution. And then again, you could shoot yourself, and your new wife would
get your employee insurance, but that would be messy. If you do quit, can I have your accounts? This last
was a familiar jab in the gallows humor that circulated on Wall Street. It was like asking the guy ready to
jump off a bridge if you could have his shoes. Look, this is a very shitty business right now. Were in a
bear market that has gone on for four years now, and everyone who has ever invested has been wiped out.
Nothing is going right for them. The markets are down, inflation is raging, gas prices are up a lot,
unemployment is like twelve percent, and interest rates are way, way up. It couldnt be any worse, and
youre launching your career! If you can hold it together and survive this, youll be able to survive
anything.
That may be true. But how am I going to make a living with all those things going on? Its impossible,
replied Johnson.
Youre going to do what everybody else in the office did. Youre going to suck it up, get down to
work, and smile and dial until your fingers bleed. You do it long enough and hard enough, youll make it
happen. But if you give up now, youll never succeed, Doug almost shouted at him, finger jabbing at
Johnsons chest. But he wasnt finished.
You think its easy for me? I did two seventy-five last yearmeaning $275,000 in gross
commissions, of which hed take home about $80,000and this year, Im down about fifteen percent.
Thats true of the entire office, even that jerk Winters. Winters was the offices big producer. All of us
are having a hard timeclients leaving, stocks going down, and so on. Youre not unique.
Little was waving the matadors cape in front of Johnsons competitive urges and calling him to his
duty. Johnson felt better knowing that others were also hurting. He had never understood the concept that
knowing others were suffering made someone feel better, but it did. It wasnt compassion. He was already
developing the cynical shell of a broker and didnt really give a shit about the others. He cared about
himself, but knowing that he wasnt alone motivated him.
He and Little walked back to the office, and Little gave him two pieces of advice. The first was to find
some way to be uniqueeither by the stocks he recommended or the product he sold, but to make sure that
whatever he sold paid a good commission so he was compensated for his effort. The second piece was to
use the syndicate system as a way to open new accounts.
 When a company needed to raise money for whatever purpose, the brokerage houses would form a
syndicate to sell the companys bonds or stock. What made syndicates such a plum was a bit of Wall Street
deception and the creation of a story.
Normally when customers bought or sold a stock, they paid commission, which appeared on the
confirmation of trade. The amount of commission couldnt be more than 5 percent of the sale price. In a
syndicate deal, the purchasers were told they wouldnt pay commission. That was a perfectly legal
deception. Wall Street does not give things away. The deception was that the client didnt see the
commission as a separate entry and legally, it wasnt a commission; it was a selling concession. This legal
deception motivated a certain number of investors to buy because they believed they were getting something
for nothing, and no one was going to tell them differently. Syndicate carried a higher payout than regular
business, meaning it took less to crack the monthly draw. Finally, syndicate offered a prepackaged story
that the broker didnt have to create, so he could focus on selling. It was easy to get enthused if selling the
stock was the difference between having food to eat or putting your grocery money toward the mortgage.
Johnson took Littles advice and started selling syndicate stock, but being Johnson, he didnt just take
the firms story and go with it. He wasnt going to sell something he didnt understand. So when the
manager came around asking how much stock Johnson thought he could sell, he would ask for five hundred
shares.
One day, he was reading one of the research wires in front of Littons cube, and Steve Miller came
over. There was a deal going for Pacific Telephone, and Miller asked Johnson how many shares he wanted.
Johnson said five hundred, and Miller looked a bit disappointed but wrote the number down. Litton had
heard the exchange, leaped out of his chair, and yelled at Johnson, Fuck you and your five hundred shares,
Johnson. Youre taking five thousand shares! If you cant sell five grand of Pac Tel, you should be running
a liquor store! Johnson started to protest, but Litton turned to Miller. Put him down for five thousand,
Steve. Hell sell it! Miller wrote it down and with a half smile turned away.
Goddamn it, Litton, Ive never sold five thousand shares of anything, and I bet if you added up
everything Ive done since Ive been here, it would be less than that total.
First time for everything, like getting laid or having anal sex. You keep selling yourself short, and
youll never get out of the hole. Get to work, asshole! You have five thousand shares of Pac Tel to sell by
next week! Litton sat down. In the end, Johnson sold the five thousand shares, and with fewer calls and
work than he thought it would take. The most important thing was that he opened three new accounts in the
process. He was insufferably proud of himself.
The office hierarchy ruled in syndicate deals just as it did in everything else. Just because you asked
for five thousand shares didnt mean youd get them. If one of the big producers wanted more stock, they
got it, and if that meant you got less, that was just tough shit. The mighty had to be fed. In the case of Pac
Tel, there was more demand than supply. As the near rookie, Johnson should have been cut back, but he
wasnt.
A few weeks later, quite by accident, he overheard a conversation and learned that Litton, Moors, Reid,
Little, and Crowley had given up portions of the stock theyd been allocated to be sure that Johnson got his
full five thousand. He was stunned. Why would they give up money from their pockets for him? They
barely knew him. He was determined to talk to them about it and, if possible, to give the money back.
That plan, however noble, was destroyed in its infancy when Moors told him, Youre crazy! None of
us did anything like that. Do you think were nuts? Why would we give some half-assed rookie stock when
we have families to feed? Thats not the way things are done.
Johnson knew Moors was lying, but he couldnt prove it, and Moors had told the lies with such passion
that he knew hed never get him to admit the truth. So he resigned himself to the knowledge that hed now
been the recipient of a random act of kindness. It was hard for him to accept that it had occurred, and the
ever-present mental battle came to the foreground: Why me? Why do I deserve that kindness? Why did an
associate pick me to be kind to? They could have picked anyone! Why me? Ive done nothing to deserve
this.
The moral and ethical overtones of the act of kindness rumbled around his brain. He just couldnt
understand it. He couldnt dwell on the act, as the brokerage business doesnt encourage deep introspection
or the pondering of ethical constructs. To survive, you sold, and selling is outward focused. Those with
introspective personalities usually ended up doing something else.
In September of 1974, they celebrated Diannes birthday at a well-known (and, of course, expensive)
restaurant. After a great dinner of French dishes he couldnt pronounce and several glasses of wine, they
went back to their apartment and had birthday sex. The result was the fulfillment of the pre-Pill warning,
Accidents make people. Dianne was pregnant, and Johnson was afraid, as her family was fabulously
fecund. It might be twins!
The thought of another person to care for motivated him as never before. He had to get going. They
agreed that Dianne wouldnt work after the baby, so they would lose her income. They had to move, as
their apartment didnt allow children, so his commute would be longer. The Datsun 240z had to go, since
theyd both decided that strapping the kid down on the rear deck might create doubts about their parenting
skills.
The new mouth to feed didnt wait for the completion of gestation. Dianne began immediately to eat
like she was carrying a tribe of pygmies. In a few short months, she had ballooned from 130 pounds to 190.
She was always at the doctor for something. It was endless, and the medical bills mounted, but his income
didnt.
By the end of 1974, the Dow Jones, which had been in the 800s when he made his first call, had dropped
rallied and fell again, so that by Christmas, it was moving back up to 575 . That 300-point drop was
devastating for everyone involved with investments. Wall Street firms disappeared. Some 75 percent of all
the firms on Wall Street ceased to exist. The majority of investors, clueless and trusting in the leadership
qualities of salesmen masquerading as financial experts, were shelled and thrown away like useless pea
husks. The destruction of wealth and shattering of dreams, which are handmaidens of bear markets, drove
investors away, many of them never to return. The industry shrank in size, but the potential customer base
declined even faster.
The bear market, which began with the Dow Jones hitting 1,000 for the first time, was one of those gut-
busting, gully-washing affairs that signaled great change in the financial system and in society in general.
There were intergenerational tensions as the baby boomers came of age and tried to push their parents off
into retirement. There were geopolitical crises as communism and capitalism clashed on most continents.
There was the national revulsion accompanying the end of the Vietnam War that Walter Cronkite had
pronounced a defeat for the United States. The presidency was in crisis, and with it, the gears of government
had disengaged and the nations engine sputtered uselessly.
It was perhaps not surprising that investors were confused. Everything they referenced as standards
were under attack, from sex to money to childrearing to family relationships. Since the stock market was
reflective of society, it was confused also.
Johnson had executed on Littles comment about syndicate, and he was regularly taking down and
selling larger blocks of stock. He was acquiring a reputation as a guy who researched an offering and could
show a person how to sell it, while knowing which ones to avoid.
The second part of Littles prescription, making himself unique, was much harder. The brokerage
business is basically a commodity. All brokers, whether theyre at Merrill or Dean Witter or Bache, had the
same products, the same population to sell to, and the same restrictions and incentives, so uniqueness had
to come in some other way. What he was being asked to do was define himself and to define and answer
the question, What is Phil Johnsons unique value proposition? What did he do that no one else, or few
others, did? There were brokers who never answered that question and drove on in the constant hustle of
chasing every deal and client.
Johnson couldnt answer the question of his uniqueness, although he tried and tried to formulate an
idea. The brokerage industry, again, does not encourage deep introspection which was Johnsons way to
answer weighty questions; its a place of action. He decided to look around the office and talk to some of
the guys about what they did, hoping he might be inspired. What he found was a revelation in its own right.
He came away with the belief that few of the brokers were unique because theyd planned to be; it was
more like theyd fallen into it.
 A good example was Henry Athol, one of the more senior members of the office. Henry was a Stanford
graduate, had some musical training, and had worked for a few years in various professions before joining
Dean Witter. He was tall, but his stoop reduced his overall height by a good foot or so. He was classically
unkemptshirttails out, shoes that looked as if theyd been shined with a candy bar, unruly and mostly
uncombed hair rife with dandruff that sprinkled his ill-fitting suits. His glasses seemed to attract dirt out of
thin air. Hank was also affected by pollen allergies. The San Francisco Bay area can be an allergy nightmare.
Months of people sneezing, snuffling, coughing, gagging, and looking at you through red runny eyes. Hank
was one of the worst sufferers.
Every morning about 8:30 a.m., Hank would let go a sneeze. Well, to call what happened a sneeze was
like calling the Hindenburg a nice balloon. This was the Big Kahuna of sneezing. It was stupendous. Once,
Johnson had been standing at Littons cube across from Athols when the explosion occurred. It was so
loud, the water in the glass on Littons desk actually moved back like it had been shaken. It was hard to
believe that such a noise could erupt from a human head without causing permanent damage.
Hank became unique because of nuclear power. There were several large electric utilities in the state,
and like all public utilities, they were roundly hated and blamed for everything from birth defects to the San
Francisco Giants having a bad season. Californias utilities faced an impossible problem. The state was
growing rapidly, as was the demand for electricity. The nascent environmental movement was against
growth and the expansion of electrical generation, especially if it meant burning oil and gas. There was a
herd mentality to nuclear power that infected the states utilities. Two of the largest utilities, Pacific Gas
and Electric (PG&E) and Southern California Edison (SCE), announced plans for large nuclear installations
along the coast. They were a matadors red cape to the bull of the antinuclear movement.
Somehow, Hank Athol got involved in the movement and the battle against PG&Es Diablo Canyon
plant. Nuclear power in general was Hanks breakthrough. Many of the people involved in the movement
were wealthy, so Hank came into contact with them at various meetings. Second, the movement raised
money, and that had to be invested. Who better to manage that than this advocate of the cause? Finally,
participation in the cause took Hanks time, and therefore, he had to focus on generating business more
efficiently. He developed a killer instinct that had been previously missing in him. Over the three years
from 1974 to 1978, Hank went from being the fourteenth-largest producer to the fourth.
Bill Beckon had been a lot like Hank, a senior guy but not a superstar. His breakthrough had been
courtesy of Witters Witnesses. Suddenly, Bill seemed to have a sense of purpose and direction in his life.
He prayed and he produced, and his gross rose from thirteenth in the office to second in a short period.
Perhaps the Lord had called him and shown the way; perhaps it was the moral and ethical teaching of
religion that made the difference. Those might have been the reasons, but the reality was that by declaring
himself a Christian, Bill, just like Hank Athol, had placed himself in the path of one of the coming trends:
affinity marketing.
In 1976, after two years in the office, Steve Miller was promoted to manage the larger San Francisco
home office. In the brokerage industry all achievements are viewed as not happening because of a persons
skills. Success was usually written off as luck, influence or succeeding despite being an idiot, the fiction
made others feel better. In the case of Miller it would normally have been written down as his father, the
President, of the firm taking care of the boy. While influence might have been at work most felt it was a
totally justified promotion. Miller combined all the qualities of a good leader: he identified with the
problems of his followers, he was sensitive to the mood in the office, he was as fair as he was permitted to
be in the hierarchy of the office, and he was genuinely nice and honest. It was almost possible to forget that
he was the son of the president of the firm.
His replacement was the former manager of the Napa, California office, named Don Malte. Everything
that Miller was, Malte was not. The changeover was particularly hard on Johnson. Hed been there through
two and half years and two managers, and he was at the first plateau of his career. He needed at that moment
a caring and helpful manager, and he got the opposite.
Maltes impact on the office was immediately negative. Within months of his arrival, three brokers left
for other offices or firms. One of these was Moors, who moved to Boise, Idaho. Before he departed, Moors
had come to Johnsons cube and made one of the most truthful and seminal statements Johnson would hear
during his career. Johnson, I got to tell youhe paused as he blew out cigarette smokeyou work really
hard and I think youre smart, but youll never be a huge producer in this business. Do you know why?
Johnson said he did, but Moors continued, Because youre not a big enough asshole! He turned and left,
and Johnson never heard from him again.
Malte was outmatched by the office. The big producers ran all over him. The younger producers thought
he was a jerk, and he did everything he could to live down to their expectations. His only attempt at office
motivation was to take each new broker who arrived in the office and cosign his mortgage. According to
Malte, this huge debt would motivate the broker to do better, because he wouldnt want to lose his house.
He also turned out to be the type of sexist male who inspired the hatred of the rising feminist movement.
He was a misogynist.
The industry was almost entirely male; women were wire operators and sales assistants. It was a widely
held belief by male brokers that women couldnt survive in the rough-and-tumble world of retail brokerage.
Like all stereotypes, there was some truth in it. While the feminist movement was gaining strength, the vast
majority of the clients of the brokerage industry were married men between forty-five and eighty. Men of
that genre didnt trust female brokers, nor did their wives. Womens place in the world was changing and
it caused resentment but it was a force that could not be stopped. It would be years before the entrenched
power structure changed, but most brokers accepted women, however the worst offenders like Malte
couldnt accept women in the workplace with any grace.
Palo Alto was a university town, and therefore, it was more progressive in its social structures. Into the
all-male world of the office came a lovely brunette whose husband was a big-time real-estate developer.
She survived largely because she was smart and her husband fed her leads to develop into accounts, facts
that she readily confirmed. She was highly educated, and as a former airline stewardess (as they were called
in those days), shed been around and had a cynical edge to her. She was a feminist, but not a noisy one.
She threatened no one, so she was accepted by the guys in the office. But the brokers wives, acting as
wives often do, regarded her as a woman bent on seducing their husbands. Malte treated her like a glorified
secretary.
Soon, another woman named Annette Picaro joined the office. Annette was very different from
Charlene. She was ungainly, with a face full of planes and angles unrelieved by any softness. She joined
the office as a trainee with two men, and they were supposed to hang around, study, and learn the business
while taking the training course in San Francisco. Annette was a good salesperson. She was a Stanford
graduate with a degree in business and had spent two years as a pharmaceutical representative selling drugs
to doctors.
Malte did everything he could to discourage Annette. He assigned one of the middle-ranking brokers
to mentor the two men but failed to assign anyone for Annette. When Johnson, like a fool, asked Malte
why, he was told that it wasnt a good idea for a male broker to work closely with a female broker. It was
unseemly and might cause problems.
Johnson had come to the realization that while the brokers were all tough-minded and could be
coldhearted and ruthless, there were very few true assholes. They had mothers and sisters, wives and
mistresses, and they felt sorry for Annette. Most of them, despite their gruff exteriors, had hearts of gold,
and they opened them for her.
Little and Reid gave her the task, when she had time, of posting their books, which was a boring and
time-consuming job recording the details of all the transactions. Most brokers did it with the same joy that
accompanied a hernia operation. Crowley had her organize his commission runs and check them against
his trade tickets to ensure he was getting all his commissions. Gradually, she was learning the guts of how
a broker worked.
During one week, there had been a flu bug running around, and the sales assistants were particularly
hard hit. It wasnt that it was a virus that sought out women; it was that they got paid if they were out of the
office sick. Since a broker couldnt earn commissions while out of the office, having two broken legs, one
eye falling out of its socket, and a syphilis infection was rarely sufficient to keep them away. It happened
that in the middle of the week, there were insufficient operations people to handle all the duties, and the
most important, the phone receptionist, was a position without a body. Malte, in his usual, ham-handed
way, walked back to the mini bullpen where the trainees sat and told Annette that shed fill in as receptionist
until the regular person returned.
Annette protested that she knew nothing about the phone system and was concerned that she wouldnt
handle it well. In truth, that was a valid point. The phones in the office were very busy, and the first
impression a client or potential client formed would come from the receptionist. If the person answering
the phone was unsure, it would allow the wrong perception. The other issue was that the inflated egos of a
couple of the producers just could never allow anyone to make a mistake. The real reason Annette protested
was that Malte had simply told her to do the job, never considering any of the male trainees for it. But being
a dutiful employee, she took the position and learned it very quickly. There was almost no noticeable
difference.
One day not long after the event, Johnson was coming up the stairs from the bathroom, and he walked
into a confrontation between Malte and Charlene. Charlene was front and center on Malte, and the fifteen-
inch difference in height made what was happening look ludicrous. Charlene was actually chewing Malte
out as a sexist pig because of how hed treated Annette. Finally, she said to Malte that she was glad he
hadnt asked one of the male trainees, because they wouldnt have been able to do the job without getting
their dicks in the way, and stormed off.
Malte just stood there slack-jawed, watching Charlenes well-shaped ass going away. Hed been
publicly humiliated by a female in front of half the office. Even as dense as he was, he knew he had no
allies in this fight. Not that the brokers were feminists, but because Malte was such a jerk. They wouldve
supported Hitler if hed chewed Malte out.
One of the positive changes Miller had introduced to the office was that hed convinced Steve Lansing
from the San Mateo office to come to Palo Alto. Lansing had bought a house in Atherton, and it was more
convenient for him to work, as they said, down the Peninsula rather than up. Miller and Lansing were
friends from USC, and Lansing, immediately on arrival, took over the job of motivating the new brokers.
To the surprise of most, he was good at it.
Like most brokers of the time, Lansing was a very flawed human. Some brokers, like Johnson, were
clinically depressed, although he didnt know it then. Some were womanizers and libertines. Some were so
arrogant they could have no true friends. Others were like Jack McKenzie, who had stopped living at the
end of World War II. Many had Napoleon complexes, and others were stupid, lazy, ignorant, or just
dishonest. Lansing was a drunk.
Lansings drinking was legendary, and his drink of choice, a double Jack Daniels on the rocks with a
twist ordered as Jack, rocks, twist, and hurt me, was quickly part of the lexicon of the office. He took
each of the brokers out to lunch at least once, and then he had group meetings to pump them up.
No one craves affirmation more than one who is constantly denigrated. In 1976, with the general public
still not trusting the markets or brokers and everyone with money being hammered by six or eight brokers
a day, massive rejection was a way of life. If you learned to deal with it, you survived. If not, it was Hasta
la bye-bye, baby! In that environment, Lansing was a ray of hope, because he cared, hed been there, he
wanted to help, and that was a gift without price. The fact that you had to sit through a few lunches with
before-lunch drinks, wine with the meal, and after-lunch drinks that lasted from 12:30 to 2:00 p.m. was a
small price to pay.
It also turned out that Lansing was a great stock picker. He had the knack of being able to focus on a
stock, get a simple story in his head, and make it sing. In markets that were directionless, that was a terrific
talent. Johnson could pick stocks too, but he worked on it hard, researching and learning, preparing financial
analyses, and finally reaching a conclusion. Lansing just got them by osmosis.
The rookies and younger brokers quickly learned two of the founding rules of what became behavioral
economics: one, investors usually make the same mistakes over and over again, and two, investors focus
on losses four times as long as they do on wins. Johnson also formulated another of his own rules: regardless
of the facts of the matter, any stock that goes up will be construed as the idea of the client only; conversely,
all declining stocks are solely the brokers idea.
Johnson and Lansing bonded, for some reason. Perhaps Lansing saw a kindred soul because of
Johnsons past alcohol problems. Johnson rarely went with Lansing to lunch, but they did do things socially.
 Lansing had Johnson moved from the back of the office to the cube in front of his, and they talked at
length. There was another fellow in the office named Ken Davis whose flaw was chain smoking. Davis was
an embittered, older fellow who was also a great stock picker. Davis was a researcher like Johnson, and
when Davis found something he liked, hed take huge positions that invariably moved multiples higher. It
turned out that Davis, Lansing, Johnson, and another older broker named Hal Staff formed a partnership of
complementary skills.
Johnson still had the problem of attracting customers. He was smart enough, but he didnt enjoy the
success that others did. All the brokers had been raised by parents from what would later be called the
Greatest Generation. Survivors of the Depression, World War II, and Korea, they were the kind of folks
that sucked up their troubles, did their duty, and carried on. While that fortitude was prevalent in the
generation as a whole, the men it raised were particularly imbued with it. They didnt cry, they didnt show
emotion, and they certainly didnt show vulnerability. Nowhere was this more in evidence than in the
brokerage industry.
If you woke up one morning and your wife had run off with the milkman, your daughter was pregnant,
your son declared he was gay, and you had a broken leg and the flu and were blind in one eye, you soldiered
on. If someone came up to you and asked how you were, your answer was something to the effect of,
Fucking great. Ready to roar! How the fuck are you? Anything less was weakness. People quickly tire of
a stream of woe. They get angry over an unbroken stream of success, but theyll listen. Not so with woe.
Too much woe, and youre done with that person.
Since every day in the office was considered a competition, the machismo grew to incredible
proportions. It was never OK to just accept or even be congratulatory toward another broker who was
successful. Oh, you might congratulate him when it happened, but it was only one of those socially polite
lies everyone told. Underneath, there was resentment. This led to rationalization of why that person was
successful, and that usually led to denigration of his intelligence. In after-hours conversation, questions
would come out: How the fuck did he get that account? He doesnt know a stock from a duck! or, He
couldnt pick a stock if it bit him in the ass. The whole purpose was to reinforce the speakers opinion of
himself at the expense of the other guy. The code of conduct was that you were the best, and others lesser
humans.
Johnson hated prospecting for new clients. He knew he had to do it to keep the pipeline full, but he
hated the grind of daily calls, spinning stories to others, and being bright, shiny, polite, and pleasant all at
the same timeendlessly. Because he hated cold calling, or smiling and dialing, as it was known, he
didnt do it well, and he did it in bursts. The key to cold-call prospecting was to do it constantly, and he
didnt. The result was that hed find himself periodically with no future business prospects, and panic would
set in. Hed then have to start calling again, and because he hated it, he wasnt successful. Hed never
mastered the art of concealing his opinion or emotions in speech.
One day, Johnson was calling executives at local companies. Hed heard that a good time to call high-
ranking executives was before 8:00 a.m., as they were often at work and the secretaries who shielded them
from guys like Johnson werent there. This morning, he called a senior vice-president of a local electronics
firm called Watkins Johnson. The phone rang three times, and a gruff, male voice answered, Purcell!
Johnson had a momentary sense of fear. He had actually gotten to the guy, but now the fear of success
coming too easily flashed in his brain. He fumbled a bit. Ahhh, Mr. Purcell, my name is Phil Johnson, and
Im with Dean Witter in Palo Alto. He paused, not because he wanted a reaction, but because the language
implied a break. Thank you for taking my call. I was calling today to introduce myself and the firm and
see if I could occasionally call or send you some information on investment ideas. He didnt realize that
his phraseology doomed his effort to failure, but the response he received far exceeded anything he
expected.
Goddamn you motherfucking brokers! Purcell screamed. Do you think I have nothing else to do
than sit around here waiting for cocksucker, asshole, shitbag brokers to call with some stupid-ass ideas?
You assholes all ought to be in jailbothering us at work trying little shit-assed comments to trick us into
investing with you!
 Johnson sputtered into the phone, but Purcell didnt notice. He was screaming, really screaming,
Fucking assholes! You shitheads dont have any good ideas. Youre just a bunch of failures working in
some fucking high-class bucket shop. Youre no better than the drunks on the street. I wouldnt be surprised
if you pissed on yourself just like them. Fuck you! I wish you were here so I could beat the shit out of you!
And the phone went dead.
Johnson held the phone receiver to his ear like an idiot, not believing what had just happened. He stared
ahead, and then it started. First, it was a grinding in the gut and then a kind of eerie calm, which faded fast.
Then came a rising of his body temperature, and finally, he broke out in a sweat. The tops of his ears turned
red, and they matched the embarrassment showing on his cheeks. His eyes narrowed, his jaw set, and he
was truly mad.
He was killing mad. It was the madness that overcomes a man when pushed beyond his limits by forces
beyond the point where the controller of moral action is overwhelmed by the voice of temptation and moral
restraint falls away. He was insane at that moment. Hed experienced this complex of emotions and actions
beforeand most times, theyd ended badly.
This anger does not respond to rationality; its all-powerful and consuming. There is anger that comes
from deep and long-lasting hurt that expresses itself in a cunning and implacable way that leads to revenge,
but this was different. This was the flash of an explosion before the noise reached the ear; it was the heat
and light, each damaging in their own way. It was a unidirectional thing. Anyone or anything that got in the
way was going to get hurt.
He exploded out of his chair, sending it slamming into the rear wall of his cube. Grabbing his car keys,
he stormed out of the office, leaving his suit coat with his drivers license behind. He forced both front
doors open, throwing them back on their stops, and half ran to his car. The Datsun was gone, a victim of
fatherhood, but the Mercury Capri carried him speeding and horn-honking and screaming across Palo Alto.
He skidded to a stop across several parking spaces in front of Watkins Johnsons headquarters.
He slammed opened the door of the building and stormed inside. There was no receptionist, but there
was a phone and a directory. He strode to the phone and grabbed the directory, almost ripping the pages out
as he looked for Purcells name. He dialed the number, and Purcell picked up the phone. Johnson screamed
into the phone, Hey, asshole, this is Phil Johnson! You wanted me to be here so you could beat the shit
out of me? Well, Im here!
Two sounds reached his ears at the same time. One was of Purcell gasping for breath, and the other was
that of a security car pulling up outside. He was sure that either Purcell had called security, or theyd seen
him racing up to the building. In either case, Johnsons anger was overcome by the desire to survive. If
Watkins Johnson security took him in, the police would get involved and hed be arrested, and that would
be the end of his career. He hung up the phone and walked to his car in a failed attempt at being unobtrusive
and furtive.
He got in the car and drove away without engaging the security guards. He took the long road home
through the Stanford campus and finally got back to the office about an hour after hed left. He was calmer
but still pissed off, and his mood wasnt ameliorated by the fact that Malte called him in immediately. I
got a call from a Mr. Purcell at WJ, Malte began. At this point, Johnson noticed that Alan Winters had
walked in. Johnson wondered why he was there. Mr. Purcell was very worried and scared and said that
you showed up at his office, threatening to beat him up.
Johnson was getting mad again. The son of a bitch didnt even have the guts to tell the truth! He cussed
me out and threatened to beat me up for making a cold call to him.
I dont care what he did. Hes the customer, and you have no right to react to anything he says or does.
Hes the customer. This from Winters, who continued, Thats the kind of behavior that shows that you
should not be a broker.
What the fuck do you care, Winters? This is between me and Malte.
Alan does business with both Watkins and Johnson, and this is going to affect his business with them.
We cant have brokers running around threatening people, Malte responded.
 Do either of you esteemed gentlemen care about my side of the story, or have you just decided to hang
me first and try me later? Johnson asked, his voice dripping with sarcasm and his body starting to vibrate
with anger and adrenalin. The mad was returning, and it was getting dangerous.
Malte recognized the signs of danger, which was him being more perceptive than normal, and he said,
Get out of the office now, Johnson. Dont come back until youve calmed down.
Johnson walked out, steaming with anger. On the way to his cube, he slammed his fist into the SP books
on the front counter, knocking them all down and making a huge mess and a ton of noise. The clatter
brought the entire office to its feet just in time see Johnson slam out the door.
 Chapter 19
The Break
Johnson struggled to make himself unique. Like most people, he thought of himself as an individual, but
when it came time to truly be different, he worried about being separated from his comfort zone. Sometimes
breaks come from unexpected sources times. Its the wise or truly desperate person who seizes the break.
After two years of embracing all the different ideas of how to do business, Johnson was handed the break
he needed. Before he left for San Francisco Miller had sent him to a sales meeting at a marina in Berkeley.
Miller had sent him to shame him and make him uncomfortable so hed try harder.
It was one those self-congratulatory meetings where a bunch of people talked about what made them
successful. He listened with increasing frustration and anger at the feting of other brokers for their
accomplishments, realizing that he wouldnt ever be honored or even recognized. This was the sort of thing
that killed a lot of brokers. A thousand broker stories to others about their successes are useless. A broker
could adopt another brokers methods down to the last iota and still not be successful. To be successful,
your technique had to match your culture and personality; otherwise, it was seed scattered on rock. At each
break in the day, as if to offer a physical signal of his distress, he moved further and further back in the
rows of seats. By the lunch break, he was nearly in the back row.
He had no desire to sit with groups of brokers and listen to more tales of conquest, most of which, even
he realized, were at best idealized, and a good number outright lies. Instead, he wandered outside onto the
deck and sat with the warm California sun falling on his face. He was contemplating what hed heard that
morning and growing more frustrated with the fact that he wasnt a bigger success. He was smarter than
these guys. He worked just as hard or harder. Why were they better than him? There were only a few chairs
on the deck, and soon he heard a voice ask him if he minded some company.
The requester was tall man with salt-and-pepper hair and a runners buildlean and sinewy, not round
and bulky like Johnson. His companion was Jesse Troller, one of the firms lawyers.
Jesse was in his late thirties, a graduate of the University Of California Law School, and had worked at
the Securities and Exchange Commission, the almost godlike regulatory body watching over the industry.
He was at the conference to make a presentation in the afternoon about his specialty.
Jesse had a sandwich and a drink and offered Johnson half the sandwich. They sat and talked a bit, and
Johnson, to be mannerly, asked Jesse about what he did. There was a large legal staff at the firm. Some of
its members dealt with the normal contracts and other issues involved in running a business; others dealt
with the contracts and agreements that came with syndicate offerings. Others dealt with litigation, and still
others with compliance to the rules and regulations of their lives. Jesse was a member of this last group,
which operated under the rubric of Compliance.
Jesse didnt deal with the foibles of the brokers. His specialty was something called restricted stock
transactions. The securities laws required all securities to be registered with the SEC before being sold to
the public. The idea that securities wouldnt be registered seemed silly now, but until the formation of the
SEC in the 1930s, it was a common practice for companies to just sell stock and bonds endlessly. In fact,
one of the legends of business was the story of how Commodore Vanderbilt had defeated his rivals for a
railroad by actually printing stock in his basement.
During the 1960s, companies began to reward employees and particularly executives with ownership
interests in the company. These shares were promised but not issued, and the laws provided limited
exemptions to allow insiders to sell these shares. During Jesses time at the SEC, hed helped write the laws
governing these sales and was considered one of the top experts in the field. Those rules and how they could
be used to develop business would be the topic of Jesses presentation that afternoon.
Johnsons training hadnt included any mention of restricted stock, and he was instantly fascinated by
the way Jesse unrolled the field, both at their ad hoc lunch and later in his presentation. After Jesse was
finished, Johnson blew off the remaining two talks and grabbed Jesse. Im really fascinated by what you
said, and Id like to learn more about it. Where can I get information? he asked.
I have some references. Ill send you a wire on Monday, Jesse replied.
 The wire arrived Monday with a list of laws, manuals, and references that Johnson dug up from
libraries, including the Stanford Law Library. It was in largely a foreign language to him. Two weeks later,
Miller came to his cube and asked if he could step into his office. Miller dialed a number, and Jesses voice
came on the speakerphone. Phil, have you read the information I sent down? Jesse began.
Yeah, but I really dont understand it. Its like a foreign language.
Its foreign to most people. Thats how we lawyers maintain our high fees, because no one other than
other lawyers can understand what were doing. Jesse paused for a second. I have a proposal for you and
Steve. Phil, you were the only guy at that meeting that expressed any interest in restricted stock and what
it can do for a broker. As you can see, it can be complex and intimidating. I need to find someone who can
help turn the legalese into a sales presentation, and Ive selected you. Ill train you in all the nuances, and
youll figure out how to sell it to corporate executives. There was an uncomfortable silence as no one knew
exactly who should talk next. Finally, Jesse resolved the conflict. I want you and Steve to talk it over and
get back to me. So far, Phil, youre the only guy Im talking to.
It was a challenging task, but it was one that appealed to him. First, it was a controlled, rule-based
environment. He was uncomfortable in the world of the extemporaneous sales pitch and the give-and-take
so common to the business. Second, it would increase his knowledge of the business, and hed always felt
that more knowledge was better than less. Third, it would give him a chance to be creative and proactive,
which was rare in the brokerage industry. Fourth, it gave him a targeted audience who, by definition, had
money. Finally and most important, it would let him be unique.
The negative was the nagging doubt about whether he was up to the task. He imagined himself lacking
the skill to turn a complex narrative about an investment into the talking points that would sell. This was
going to be the mother of all conversions. In the end, it was Dianne who convinced him that this was what
hed been looking for and that he was a moron if he didnt take the opportunity.
For the next two years, he worked with Jesse, talking to him at least weekly. Jesse would send down
study guides written longhand, and each month, a test. As the months went by, Jesse introduced Johnson to
some of the investment bankers who were working on mergers where restricted stock would be created. He
finally got to the point where he let Johnson do the talking, and he just nodded wisely.
Johnson began to scour the Wall Street Journal looking for announcements of mergers, and he began
to look outside the local community for business. He was calling Los Angeles and even Seattle, talking to
people about restricted stock. He found he had competition from the big institutional firms like Morgan
Stanley, Goldman, and others. If they were the investment bankers on the deal, they captured almost all the
restricted stock.
Johnson immediately shifted tactics. He started calling on the officers and directors of publicly traded
companies to talk about restricted stock. He didnt get a lot of business and probably chased some to their
existing brokers, but he loved the level of the discussions. He was alive and finally enjoying the business.
He was experiencing what for him was the rarest of emotionshappiness.
The knowledge of restricted stock helped in other ways. He began to introduce himself or work into his
conversations that he was a restricted-stock specialist, and that seemed to intrigue people. The intrigue of
the mysterious and complex seemed to attract favorable attention and act as a confirmation of his
intelligence and skill. It signified nothing in reality other than remembering a lot of facts, but in the
brokerage industry, perception is more important than fact.
During this time, he and Dianne had their first real piece of luck. One of his clients was an elderly
widow who lived in a nice little house in the very desirable town of Los Altos. During a discussion one day,
she told Johnson she was planning to move to a retirement community and sell her house. She and her
husband had lived there for thirty years, and she had no idea of the propertys value.
Johnson arranged for a real-estate appraiser he knew to take a look at it. When the report was returned,
it pegged the house between $95,000 and $98,000. The client owned the house outright and told Johnson
she hoped the place could be sold to a nice young couple just getting started like she and her husband had
been. Johnson made the appropriate murmuring noises, but the cogs were spinning.
He did some quick calculation on mortgage rates (everyone in those days knew rates off the tops of
their heads) and the value of their existing house in Sunnyvale. Then he talked to Lansing. He was
concerned that if he bought the house, it might be a violation of some rule. Lansing assured him it was done
all the time.
Johnson told Lansing he was concerned that at full price, he wouldnt be able to afford the nearly $1,000
mortgage payment, and Lansing asked him what hed be comfortable with. Johnson allowed as how he
could stomach a doubling of his mortgage payment, which wouldve made it $770 per month. One of the
things Johnson admired about Lansing was the way his brain worked, even soaked in booze.
She owns the house outright. Shes not trying to make a killing. She wants to give someone a leg up
in life. She likes youGod knows whyand shes talking to you about it. She could have just hired a real-
estate agent, and youd never have heard about it. Shes like a broad who wants to get laid. She cant come
right out and say it, so she shows you a little boob and leg and starts rubbing against you. She wants to sell
you the house, and you deserve it, so make her an offer that will give you a seven-seventy-a-month house
payment.
It was that simple. But he was so unused to having this stuff happen that he felt like he was taking
advantage of the client. Dianne, not surprisingly, agreed with Lansing. He may be a drunk, but he has this
one right, was her response. Johnson was beginning to see a dark, materialistic side to her that wasnt all
that pleasant.
The next day, he called the appraiser, who told him the house was great and would go up in value
because of the location. He called the client and told her he wanted to buy the house but he couldnt afford
$94,000. Her response was to ask him what he could afford, and he named the price. She agreed instantly,
and that afternoon he delivered an earnest-money check and an agreement to purchase. Hed purchased a
house conservatively valued at $94,000 for $77,000! He felt like J. P. Morgan or Bernard Baruch. He was
at the top of his game! He was a winner!
Then the depression started. How will I ever make that payment, the property taxes, and the
maintenance? He wasnt earning that sort of money, and as the purchase process went forward, there were
more and more expenses. He was scared and worried, and his bowels began to betray him. He sat for hours
on the john, mostly just staring into space and trying to figure out how make the money he needed.
Malte wasnt often right, but in one thing he was correct. As a broker, you cant get comfortable in your
situation. As soon as you are, you stop growing. Malte believed that if he could get a broker heavily indebted
with a mortgage, it would motivate him. Johnson, now the owner of a house in Los Altos, found out it was
true. Hed worried that he wouldnt earn enough to pay the mortgage and taxes, but somehow, once the
obligation was there, he did.
He was also growing tired of the Dean Witter Palo Alto office. Johnson had always had a restless streak,
and he was always looking for the next thing to conquer. The markets had improved a bit since December
of 1974, and with the improvement, brokers were more aggressive in their calling. He was running into the
same problem Moors had warned him about: everyone seemed to either have an account with a Dean Witter
office, hated Dean Witter, or had a relationship with one of the other brokers. Johnson was having some
success in the restricted stock area, but he was increasingly running up against other firms that seemed more
plugged into the executives and companies.
Johnson was proud that every month, though, his gross commissions were higher. He wasnt a
superstar, but he was doing well enough that he was able to count on an overage check each month.
In 1978, he and Dianne had their second child, a girl this time.
At the time, inflation was still high and moving higher, and real estate had become the place to be. The
semiconductor business in the Silicon Valley was booming, and lots of people were moving to the area.
The old fruit orchards of the Santa Clara valley gave way to low-rise concrete buildings for companies
named Intel, Fairchild, and Intersil. It was reported that house prices were rising at 3 percent a month, and
a 36 percent (or more) annual return was impossible to beat in any other investment.
Mortgage money wasnt cheap at between 7 and 9 percent, but it was deductible, and if you were
making 36 percent a year against 9 percent costs, you were still miles ahead. So everyone who could was
buying houses, holding them for a bit, selling them, and reinvesting in a bigger house or buying more
houses. It was bona fide panic. Houses came on the market in the morning for $45,000 and by 5:00 p.m.
had three or four offers in excess of the asking price. Everyone was doing it, and the TV and radio ads by
the real-estate and loan companies encouraged more and more borrowing.
There was a problem with the house appreciation. The supposed riches everyone was reaping were
relative. Johnson began to understand the conundrum. If you purchased a house for $47,000 and sold it a
year later for $60,000, you had a great increase in the equity, but then you had to purchase a new house that
that wouldve also appreciated 36 percent during the year. So it became a treadmill. All a person was doing
was getting deeper into debt; if the market ever cracked, a lot of folks would be stuck. He realized how
absurd it had become when he talked to the guy servicing the water softener at the house. The water-softener
guy had three houses. He made about $35K a year, and he owned real estate valued at almost $200K!
The other thing was, no matter how well you did with real estate, someone was always doing better. If
you made $10,000 on a house in Sunnyvale, all you heard about was someone who did better in Atherton.
It was the talk of the cocktail parties. It was the center of discussion every time people got together. Rather
than giving peace, it seemed that everyone was running harder. Peer pressure was making people do crazy
things with money just to fit in.
He came to another of his maxims: The house you live in is never, under any conditions, an
investment. You bought a house to live in. If you were buying real estate for investment, youd handle it
the same way you did any investment. What did it cost, what was the cost of the money, what did it cost in
taxes, insurance, and maintenance? Then you had to figure out what return you wanted on the investment.
The price then had to be low enough to generate a return after all expenses from rentals. Most houses in
California could never be priced low enough, so there was no investment merit.
It was a totally sound argument, and he tried it on a couple of prospects and clients when they started
talking about how the best investment theyd ever made was their own house. This led to another
realizationthat its hard to convince people of something they dont want to believe, particularly if theyre
convinced theyre right and everyone else is doing the same thing. It gets doubly hard if theres a large
amount of money involved.
The investment business was undergoing great changes affecting all the firms. One of the biggest
changes was the breaking of the commission collusion. In this single act, the government began a shift that
would alter forever the way people and firms related to the markets. Prior to the change called May Day
because it went into effect on that day, if a person bought a hundred shares of IBM from Dean Witter, the
commission was within a few dollars of what he would pay at Merrill Lynch.
After the May Day, the larger accounts demanded lower commissions as quid pro quo for all the
business they did. This negotiation didnt extend to the retail customer, of course, and after the new
regulations came into effect, the brokerage firms began to understand that having retail brokers was an
asset. Actually, the rule did mandate that all commissions, regardless of who paid them, were negotiable.
Johnson, on behalf of a client, asked Malte, What can I offer a client in the way of reduced
commissions?
Maltes response was, You can offer anything you want, but if the commission drops below the posted
rate, you wont get paid. So the brokers didnt tell their clients they could get lower rates. They fobbed
them off with the lie that lower commission only applied to the big institutional investors.
The second change that would really get rolling later was that the ruling broke the information
disintermediation brokers had enjoyed. From the founding of the New York Stock Exchange, there had
been only one source of information and execution of stock tradesthe members of the Exchange. And
clients paid for that control. Wherever there is monopoly, prices will always be higher than they should be.
For years, the industry had been lowering its cost of doing business with computers and technology, but it
maintained high and fixed commission rates and restricted access to information, so its profit margins were
very high.
There was no other option, so the client was stuck with a raw deal. The year before May Day Congress
had passed something called the Employee Retirement Income Security Act (ERISA), designed to ensure
that pensioners would in fact get their money. From the early 1900s on, companies had provided for the
retirement of their workers with an arrangement in which the company and perhaps the worker contributed
money to the retirement plan, and at retirement, the employee was guaranteed a defined annual payment.
 In the wonderful way of the law of unintended consequences, ERISA began to make those who
managed the investment portfolios for retirement plans rethink how they did business. The companies
running the retirement plans were required by ERISA to produce at least the returns of the popular averages.
Since outperforming the index every year is almost impossible, the mandate could most easily be met by
reducing investment expenses. Since the investment managers were unlikely to reduce their own fees, they
took advantage of May Day to force the brokerages to drop commission rates.
Shit runs downhill, and as the commissions from the pension funds fell, the high commissions paid by
retail investors became more important financially. At the same time, America and the world faced a great
need to build new plantsfirst to replace the ones from World War II, and next to build the new ones
needed to make the output of the Silicon Valley techno-wonders. To add to that pressure, the baby boomers
were starting to enter their prime consumption years, and their narcissistic nature would need to be satisfied.
All these demands meant that tons of money were going to have to be raised by companies, and that would
be done through the Wall Street firms.
The demand for new money meant that retail brokers were also in demand, as they were now the
distribution channel of securities. Wall Street was still divided into the wire houses like Dean Witter, Bache,
Merrill Lynch, Reynolds, and Paine Webber, and on other side were the investment banks such as Lehman
Brothers, Goldman Sachs, Salomon Brothers, and Kuhn, Loeb.
These last were often called the white-shoe firms, a term that came from the white buck shoes often
worn by the New England Protestants or WASPs who ran the companies. By 1977, many of the white-shoe
firms were no longer run by WASPS, so the term was now applied to those firms occupying leading
positions in the industry. Of the white-shoe firms, none was whiter or more WASP than Morgan Stanley.
Somewhere in the last couple of years, Lansing and Ken Davis had made contact with a firm named
Shuman Agnew. Shuman had been founded in the 1940s by a couple of brokers in San Francisco and by
the 1970s had offices there and in Menlo Park. In 1977, Morgan Stanley decided to experiment with retail
brokerage and purchased Shuman Agnew.
Lansing and Davis were even more unhappy with Malte than Johnson was. Shuman had made its name
as a home for more senior brokers tired of being fucked by the wire houses and not having any pleasure
from the experience. Shuman offered a higher commission payout and a retirement plan that the brokers
could direct themselves. Shuman wouldnt have interested Johnson. It was too small and didnt have the
presence he felt he needed. Morgan Stanley changed the equation.
Morgan Stanley only had retail brokers at their office in New York and the seventy or so at Shuman.
Morgan Stanley was the bluest of the blue-chip names. Lansing and Davis, as established brokers, would
make a lot more money at Shuman, but the pitch they had for Johnson was that hed have a clear path to
any prospect west of the Mississippi and hed be using the best name in the business. Lansing also
convinced Johnson that Morgan Stanley did business the way Johnson didthoughtfully, fully researched,
and well presented.
In April of 1978, Lansing and Davis left to join Shuman Agnew, and Malte was in a towering rage.
When a broker left a firm, it set off a feeding frenzy, and its magnitude was directly related to the amount
of commission the departing broker had done. Typically, brokers left on Friday, giving them the weekend
to secure their clients before the ravaging hordes were turned loose.
Johnson found the ritual of a departing broker one of the most disheartening aspects of the business.
Here was a person that everyone in the office had worked with, perhaps gotten drunk with and known
intimately for years, and the moment he departed, the remaining brokers went after his business. There
were, of course, various degrees of pursuit, and some of the brokers were more vicious than others. The
sole reason for the action was to retain the departing brokers business. Often, the office manager would
offer the other brokers higher commission payouts on the accounts that they kept.
The firms justification was that a brokers accounts belonged to the firm, since the firm had provided
the infrastructure for the broker. The broker, of course, had a different opinion. He believed that hed
worked hard to get to the customer, nurtured the relationship, and made the relationship work; the firm was
only a small part of the equation. The whole episode with the Lansing and Davis accounts made Johnson
understand that his own accounts were his only possession in the business. Those relationships were the
basis of all his future income, and given the way brokers went after accounts, if he didnt maintain a close
relationship with them, other brokers would pick him clean him like piranha when he left.
There was another aspect of this whole broker movement that cemented one of Johnsons perceptions
of the business. Johnson realized that the entire business, from acquaintanceships to decisions on the stocks
to buy or the firm to work for and the place to work, were all motivated by money. There might be in some
deep recess of a brokers mind some higher motivation, but in the end, morals and ethics were secondary
to money. Brokerage houses could afford to pay brokers more commission to steal the accounts of departing
brokers, because the firms benefitted the most. After all, they got up to 70 percent of every commission
dollar generated and their costs werent that high, so they could temporarily give away dollars. The brokers,
simple souls running on treadmills that they were, were glad to have the extra dollars, and that outweighed
the ethics.
When Lansing and Davis went to Shuman Agnew, it had been for the connection to Morgan Stanley,
and naturally, the manager of the office asked them if they knew of anyone else who might be interested.
In the normal hierarchy of things, Johnson wouldnt have been considered; his commission production was
too low. But he had his valuable knowledge of restricted stock, and in that, the Mighty Morgan was very
interested. The courting dance began.
At first, Johnson was adamantly opposed to a move. He was unsure if his clients would go with him,
and he felt a sense of duty and loyalty to Jesse for the training hed gotten. Hed convinced himself that he
was big-time at Dean Witter because he was the restricted-stock guy and on the way up. Johnson had seen
and been commanded by enough jerks in the army to know that jerks only seemed to be around forever.
There was an old saying that beauty was only skin deep but ugly went all the way to the bone, and it was
the same for jerks. Good people tended to be good in all things and at all times; jerks tended to be jerks all
the time and in all things. If they were jerks in the office, they were jerks at home. Usually, that jerk trait
pissed people off, and the jerks often just disappeared. He felt that Malte would go away sooner rather than
later and maybe he could outlast him.
There was another factor playing in him, but at that time, he wasnt aware it had affected him. Brokerage
houses tended to treat their brokers terribly. For all the quacking they made about being efficient, they hired
sales assistants who were, in some cases, barely literate. They didnt provide independent research so that
the assertions of the firms analysts could be checked out. They didnt provide offices that seemed to attract
wealth, and whenever the profits of the firm were endangered, the firms would cut the payouts. There were
rules out the yingyang that restricted the business you could do and with whom. If you got a large syndicate
order, the bigger producers would take all the stock the office had, leaving an average broker with nothing.
In short, the brokerage houses bet that the brokers wouldnt leave because of simple inertia.
Johnson had several high levels of commitment. One was to do his duty as he saw it, second to speak
the truth, third was loyalty, and finally, he was passionately affected by injustice. Hed seen enough injustice
and been the victim of enough of it that overt injustice infuriated him. The way brokers were treated by the
firms was unjust and in many cases cruel and merciless. One of the most cynical of the crowd in the office
and it was hard to be more cynical than the average brokerhad told him that the way brokers got handled
was intentional.
This sounded conspiratorial, because it wouldve involved a lot of moving parts. It sounded stupid. The
fellows case was that every year, about 80 percent of the first-year brokers left the business. This horrible
casualty rate held steady for years and years. The fellow, whose name was Patrick, asked the question,
With all the knowledge the brokerage firms have about people who are and arent successful and with all
the psychological tests available, why doesnt the attrition rate decline? It was an interesting question.
Johnson had been so busy in his reactive mode of survival, he hadnt done any deep thinking about the
nature of the industry.
Patrick drew the conclusion that the reason the firms didnt do a better job of predicting success or
failure was that they didnt want to. What they really wanted was for a lot of brokers to bring in client
money and then fail, which sounded counterintuitive. Patrick explained that when a broker left, the big
producers got first crack at the departing brokers accounts and naturally picked the best ones. That way,
according to Patrick, the brokerage firms fed the biggest producers, who were also the most profitable ones.
This was one of those comments on life that stayed with Johnson forever and rumbled about his brain,
seeking to be matched up with other facts that either supported it or disproved it.
The final straw for Johnson came quite suddenly. Dick Quitland had left the Palo Alto office to manage
his own office. Dean Witters policy was that office managers couldnt be in production, meaning selling
for commissions, so Dick had been forced to give up all his accounts when he joined his new office. During
the years Johnson had been in the office, he had on more than one occasion talked to one of Dicks former
clients, a hideously ugly woman who just happened to be quite wealthy. She was one of Johnsons biggest
accounts now, and she liked him so well that shed also moved her sons trust account over to Johnson.
One day, Crowley stopped by to tell Johnson that Quitland was coming back to Palo Alto. The rumor
was that he was such an asshole, the brokers in his office had threatened mass departure unless he was
removed. Johnson was finding that the scuttlebutt in brokerage offices, at least about people, was usually
true. Sure enough, about a week later, Quitland showed up and was ensconced in Moors old cube.
A day later, he received a curt wire telling him that the accounts of the hideously ugly woman and her
if-possible less-attractive son were being transferred to another broker. When he inquired as to whom it had
gone, he was told it was Quitland. He was stunned. No notice, no discussion, no warning, just gone. And it
was, he found out, irreversible, since it had been at the clients requestwhich is as close to being inviolate
as anything.
Johnson talked to a few other guys and found out that some others had lost accounts too, so he inquired
about the policy that a Dean Witter broker wasnt supposed to solicit another Dean Witter brokers clients.
It was a policy that hed strictly adhered to. Apparently, it was a modifiable policy, and it had been modified
by someone high up to accommodate Quitland.
This really pissed him off, as it did the others who had lost accounts, but they seemed to take it in stride.
Johnson was too passionate about rules and respect for governing structures. It got worse after Quitland
came to his cube and demanded all the paperwork on the accounts with not one iota of shame, just
arrogance.
Johnson sent some pretty inflammatory wires and made some hostile phone calls to the powers that
were, which were met with the silence such intemperate outbursts deserve. They did, however, filter back
to Malte, who was furious that Johnson had first of all gone outside the chain of command; second, made
it apparent to everyone that Malte wasnt in control of the office; and finally, just because Malte was always
mad. He and Johnson had a number of high-pitched rows with enough swear words to fill a bathtub. Johnson
had words with Quitland, whom he took to calling Greaseball.
He realized at that moment that his time with Dean Witter was ending. He could no longer endure Malte
and the injustice of the office. He had for a year been happily without a cube mate when they moved a new
broker in. His name was Alain Yacof, and he was tall, curly headed, very Jewishand a total asshole.
Yacof had a number of rather disturbing habits: he was a pot smoker of the first order, and most
mornings, he came in red-eyed and smelling of burning electrical wire. He was Jewish in the loud,
obnoxious ways that gave Jews a bad reputation. He was a know-it-all (which was impossible, because
Johnson knew it all). He never let you forget he was Jewish. The final straw was that he constantly dug
around in his nose and the product of that effort supplemented his breakfast. Morning after morning,
Johnson did all he could do to hold his own breakfast down, seeing Alain in the reflection of the quote
screen.
Everything started to bother him. There was a Mormon broker sitting kitty-corner from him and in front
of Alain whose sister-in-law also worked at the firm. Johnson didnt have any prejudice against Mormons.
Hed read up on the religion and came to the conclusion it was a pile of crap, but whatever. Hed observed
that Mormons were usually very moral and upright when there was someone watching them. When they
were alone, many of them, driven by the Churchs relentless tithing, would bend the rules and even the laws
to demonstrate success. In any case, Rick Bradburn and his sister-in-law were basically thieves.
It was the general practice of the operations ladies, with the exception of the wire operator, to fill in as
receptionist when needed. When Bradburns sister-in-law Sandy was in the seat, she directed all the
incoming calls that normally went to the duty broker to Bradburn, thus stealing accounts from the duty
broker. During sales contests where the prize went to the broker who reopened the most inactive accounts,
Sandy would go through the inactive account files and change the broker number to Bradburns.
It was patent dishonesty. Malte was so clueless that he actually celebrated Bradburn as a success story
as if the ass had really developed the accounts himself. The guy was so bad that other Mormons in the area,
usually a tight clan, shunned him!
What he didnt realize was the reason everything was bothering him: it was that hed made the
subconscious decision to leave Dean Witter. If hed been asked, hed have denied it, and in the weird way
psychology works, hed have been right. It wasnt a conscious decision yet. There was no plan or date or
method in place for leaving. There was only the sense that things needed to change. Because hed reached
the tipping point of taking crap at Dean Witter, he found everything annoying, and it pissed him off.
He had a number of lunches with Davis and Lansing where they talked about the Morgan Stanley
connection. While Davis and Lansing smoked and drank, Johnson just drank. To one of the lunches,
Lansing invited the Menlo Park office manager, a big, strapping guy named Bruce Van Alstyne. Bruce had
been around for a long time and was very wealthy from making good investments in real estate. He was a
Stanford graduate and had played football there. He was one of those guys whom you instantly liked and
trusted.
Johnson listened and wished hed not had as much to drink, as he felt out of controland here he was
in a job interview! He hated himself when he did this. He normally was in total control of himself. In fact,
he was so in control, he was inflexible and regimented, almost to the point of being a marionette. Yet, here
he was, sitting with perhaps his future boss and two associates, and he was half blasted! Why had he not
stopped at two or three! He knew from experience what could happen to him as he drank, and he knew in
his mind that he needed to stop and not drink. But he wanted to be part of the crowd and not show weakness
in front of Lansing and Davis.
He left the lunch and went back to the office too drunk to work, so he did the right thing and went
home. Dianne saw that he was drunk. He had a tell for drinking: his eyes would get red. And Dianne was
pissed. She knew enough not to say anything, but her woman DNA kicked in and she started to lecture him
about his responsibility to her and the kids. They all had a right to have him not drunk. She said he reminded
her of her father, who was drunk almost every night and beat her mother.
There was a difference between Johnson and other drunks. He didnt need to be lectured about his
responsibilities. He knew his duty and his responsibilities until they came out his ass. He needed no lectures.
Hed done his duty so often and completely that hed almost died several times, lost friends, lost most of
his hearing, had recurring nightmares, and didnt pursue a lot of opportunities because he felt a duty to
others. He gave away time and advancement because he needed to fulfill a duty.
Diannes lecture hit him exactly wrong. He exploded and walked out of the house. He got in the car
and drove away fast and dangerously to a motel, where he spent the night sobering up. It was the first time
he and Dianne had had a fight of this depth and ferocity. He snuck back in the morning before she was up,
got dressed, and left for the office.
All day in the office, he was a true savage. He attacked anyone and everyone who crossed his path, and
like all people who try to gut out a hangover, he felt worse and worse all day. At one point, Dianne called,
and he told the receptionist to take a message. She was the last person he wanted to talk to. Hed acted
badly and he knew it, but he didnt want to admit it, because he felt it would show weakness. The peer
group in the office sustained him in his feeling that all women were at heart crazy. Then the depression
started.
He was physically drained by the hangover; hed pushed himself hard all day, and he was getting tired
from low blood sugar, poor sleep, and being pissed off. As he spiraled down physically, his psyche
performed a double loop matching the physical decline. He was convinced that Van Alstyne would see him
as another drunk. He knew that hed have to face Dianne and talk this out, he knew that he was condemned
to spend the rest of his life with Malte. He had no one to talk to who would understand; he was such a loser.
He knew better than to try to drink with Lansing. He knew that he should not have even had the lunch.
He knew he was wrong and Dianne was right; he was better than all this. When others told him that theyd
done the same thing many times, and that, in fact, everybody they knew had done it, it made him feel even
worse. He wasnt supposed to fail like this. He was better than this collection of behaviors. He wasnt a
weak-willed jerk who couldnt hold his liquor. Hed failed the most important thing in his life. Not his wife,
not his firm, not his friendshed failed himself, and not really himself, but his me as I see me self.
While he was in college, hed learned that Freud characterized the mind as having three parts: the ego,
the id, and the superego. Later, the psychologist George Herbert Mead had reformulated Freuds triad to
the mesthe me as I see me, the me as others see me, and the me as I want to be seen. Behavior, then,
was a series of rebalancing between these three lobes of the diagram.
Johnson was almost a sociopathic combination of two of the three: the me as I see me and the me as I
want to be seen. He had deep desire to be accepted, and he felt unworthy in almost all areas. He wasnt a
gifted athlete; he didnt attend a prestigious university; he wasnt handsome or elegant; he wasnt a gifted
singer or musician. He wasnt a particularly good salesman; his face and body werent what he hoped theyd
become. But he wanted all those things. Hed compensated over the years with various modalities. In high
school, hed carried candy in his pockets so others would come to him. He was known for doing dangerous
and crazy things to gain some kind of perverted attention.
In college, hed developed a vicious, quick tongue that slashed like a sarcastic razor through others
self-esteem. Hed overpowered those who disagreed with him with an endless supply of odd facts that hed
stored away in the warehouse of his brain. Hed started writing scathing letters to the editors of the school
paper, attacking teachers and other students and groups. He would take the underdogs side in every
conflict, and he was known to mercilessly play practical jokes on students even less assured than he.
He adopted the technique of being the guy behind the leader, not because he was good at it, which he
was, but because he wanted to be accepted by the leaders who seemed to have all the things he wanted and
desired. It didnt seem to work. He was accepted while it was important for him to be around; then, in his
mind, rejected. He never made the jump to run with the leaders. Most of the time, the work he did for others
left him feeling hed been exploited for his brains and his commitment. Over time, it became his greatest
fear, but he was drawn to exploitive situations like a moth to a flame. He couldnt figure out what else to
do.
He was dissatisfied with himself and his world. Being ill at ease and unhappy with himself left him
with a constant depressive feeling. He was like a rock precariously balanced on top of a wall. A breeze
would make the rock move, and a good wind made the rock tumble off. All it took was a bad experience
with a client, a disappointment with his family, or a series of small problems, and hed fall into the pit and
all the dissatisfaction came to the fore.
At the end of the day, he dragged his sorry ass home to face the music from Dianne. She was waiting
for him with a look that wouldve curdled milk in a bottle. She was sitting in the living room, so there was
no way to get in without her seeing him.
Well, I see that youre finally home! What did you do, go hang out with some whore?
Where did that come from? Have I ever given you any reason to think I was screwing around on you?
Im not a member of your family, you know. He could see her jaw set harder as he insulted her family, but
she didnt lose it and start yelling.
I was worried about you, and the kids were terrified that something had happened to you! You dont
have the right to do that to us, Phil. We care about you, and you just walked out. She had a tear in her eye,
and she was looking at him the way a mother looks at a wayward child.
I didnt just walk out. You were all over my ass about me being drunk and calling me your father and
all that. I dont need that from you or anyone. The fact that you were so pissed off just was too much.
Then talk to me about it. Dont just climb in a hole and not talk to anyone. Im your wife, and I deserve
to know whats going on!
And Im your husband, and I work my ass off every day to provide a nice house and life for you and
the kids. I deserve some respect for what I do. If I happen to go out and get drunk once in a while, thats
my right. He was using some of what passed for wisdom in marriage relations among the office. It wasnt
going to work, and he could see it immediately as her face hardened and eyes narrowed and caught fire.
You deserve, you deserve! she almost bellowed. You think you have the right to get plastered
anytime you want and come home and were all supposed to be nice to you? Maybe with the drunks you
hang out with, but thats not the rule here. I deserve and demand respect, and you getting drunk is not
respectful.
He had nothing to say; there was no comeback. If he insisted on his rights, it would be taken as
disrespect. If he didnt, hed be giving up what he perceived as a core right. He was too tired and washed
out to continue the argument. He just gave in. OK, Im sorry. I was stupid and thoughtless.
The rest of the evening was that strained and formal time where members of the family pretend nothing
had happened, but an outsider would know instantly that all wasnt well. They had dinner. Diannes cooking
hadnt gotten any better in the passing years, so it wasnt enjoyable. He played with the kids for a bit before
they went to bed. They sat on the couch and watched some TV until he fell asleep.
As he was getting into bed, she said, I really was worried about you. Dont do that to me again. I was
really scared, and I love you. He mumbled a love statement and fell into a dead sleep again.
The next day, he got a call from Lansing, who wanted to know if Johnson was open for lunch. Johnson
had no trouble turning him down. He was sure what would happen, and two days in row was too much.
Lansing then suggested they meet at his house after work, and Johnson agreed. He called Dianne to make
sure he did his husbandly duty to keep his wife informed.
Lansing had moved to a really nice house in Atherton, a rich community north of Palo Alto. Johnson
pulled up and met his wife, Kathy, and one of his children. Lansing, of course, offered him a drink, and he
took a beer. Lansing got right to the point. Van Alstyne was interested in having Johnson come to work in
the Menlo Park office. Bruce had been really interested in the restricted-stock aspect of Johnsons work and
thought it would be a great addition to the office.
Johnson was still uncertain and asked when he had to make a decision. Lansing said Immediately,
and started the sales patter. What else to you need to know? Its the best firm in the business. You have
unrestricted access to everywhere, big producers all around, great bunch of guys, and it went on and on.
Johnsons gut said to do it, but he was naturally cautious and had experienced enough sales pressure to
know it when he heard it. He begged for more time, and Lansing said that the offer might not be there if he
waited too long. With that, they separated, and Johnson drove home, thinking all the way about the risk of
what he was contemplating.
He thought about the decision and called three of his best clients at home and asked them their opinions.
He learned a valuable lesson. The clients were impressed that hed reached out to them, since almost none
of the other brokers had ever asked; theyd just assumed the client would move with them. All three told
him that their loyalty was to him and if he thought it was a good move, they would support him.
The next day, he began to leave. He took his book with all the client records, put it in his briefcase, and
left the office as if he were going to see a client. He actually drove to a copy shop and copied the pages.
That way, Dean Witter couldnt say hed stolen anything. That afternoon, he went through all of his drawers
and packed personal items into the briefcase. He decided that was enough for one day and waited three
more days before his next move.
A year earlier, Dianne had resumed her hobby of painting. She wasnt very good at it, but it kept her
happy, and he encouraged her if for no other reason than to keep her occupied and quiet. At one point, shed
painted a picture of a young boy fishing from a rock on barn wood, and Johnson had it hanging on the back
wall of his cube. On Friday, he took the picture with him when he went home.
On Monday, he was working away, planning on his departure that coming Friday, when Malte walked
over. Come with me, he peremptorily ordered, causing Johnson to bristle.
Johnson followed Malte to his office and realized that the operations manager was already there.
Youre leaving me, declared Malte.
Johnson made a mistake: he decided to bluff. What are you talking about? he said, hoping it came
out as a question an innocent man would ask.
You have been coming in later, leaving early, sneaking around, and you took your picture out of your
cube.
Johnson knew that Malte knew he was leaving, but he played the bluff one more hand. Dianne is
showing the picture at some show, and Ive been taking my son to school in the mornings.
 Quit bullshitting me, Johnson, I know youre leaving to join Lansing and Davis at Shuman Agnew.
Thats going to be a terrible mistake. It will be the end of your career. I guess you were going to be like all
the others and sneak out on Friday without saying anything. Well, youre gone today. Right now. He
turned to the operations manager. Start the paperwork and get all his account books. Ill make sure he
doesnt steal anything. With that, Malte picked up a cardboard box he had under his desk and handed it to
Johnson. Come with me.
They walked back to the cube, and by this time, the network of office prairie dogs was fully aware of
what was going on. Money had started to change hands over whether Johnson would hit Malte. As he went
through Johnsons drawers, Malte grabbed various things with Dean Witters name on them as company
property. He wouldnt even let Johnson take his business cards! Johnson was getting panicky. Hed not
actually taken the job at Morgan Stanley yet, and he was getting booted.
When Johnson had gotten everything in his briefcase and the box, he put on his suit coat, but only after
Malte had searched the pockets to be sure he wasnt stealing. Then Malte escorted Johnson to the door.
Several of the bolder brokers asked where he was going and wished him luck. At the door, Malte said, Im
going to turn the most aggressive brokers I have loose on your accounts. You wont have an account left
when Im done. Malte was in high dudgeon and leaning over Johnson with bright spots on his cheeks.
Johnson looked straight up into Maltes eyes and said, Don, you dont have any aggressive brokers.
And the only reason anyone works for you is that theyre too lazy to move. Do your worst, asshole.
 Chapter 20
A High Enema with Drano
In his entire life, Johnson had never left a job without having another one in hand. Yet the day he walked
out of Dean Witter, he was for all intents and purposes unemployed, and perhaps, depending on Maltes
actions, unemployable. As he walked to his car, he got more and more panicky. Things were still tough in
the economy, and there werent a lot of jobs open. He still had the same problem: his skill set and what the
economy wanted were ill matched. He sat in his car and began to sweat a bit. He even thought about going
back into the army.
There are times when all the smarts in the world, all the capacities, and all the goodwill arent enough.
At those times, the catalyst for success is the willingness to totally commit to the cause. The investment
business wasnt hard, but it was one that required hard work. It was like a demanding mistresstake your
eyes off her, and she was in someone elses arms.
It was his nature to have a backup plan; he always had a way out. In the army, it was called securing
your line of retreat, but in the real world, hed rationalized it as having options. What he missed, in the
immaturity of his thinking, was that the brokerage industry demanded full and unconditional commitment,
and having a second plan gave him an out. And for him, the existence of another option prevented him from
providing that level of commitment. Sometimes, too much choice is harmful to good thinking.
After his confrontation with Malte, he drove home and told Dianne, who reacted badly, blaming him
for getting fired and reminding him of his responsibility to support the family. He grew more and more
worried. Finally, he called Lansing and told him what had happened. Lansing listened and told him hed
call him back. Johnson sat and stewed for an hour, and finally the call came. Lansing told him to come to
the office now to get started with the paperwork. Lansing had seen brokers move before, so he was far more
knowledgeable than Johnson in the drill. Lansing explained that it was important for Johnson to get the
process started. Until he was officially working for Shuman Agnew, he couldnt call any of his clients
but the Dean Witter brokers could and would.
The Shuman Agnew office was located in an office park of five buildings arranged in a large circle
around a central building in what might have been called California office architecture. Each was two
stories, heavily windowed, and topped with red tile roofs. The landscaping was lush, and signs in the
parking places informed drivers not to back into them. Shuman was in building two. Once inside, Johnson
found the office without a problem.
He immediately noticed it was quieter than the Dean Witter office, the buzz of voices hushed by the
doors and walls. Lansing met him and walked him over to an inside office across from his and told him this
was his place. Then began the reams and reams of paperwork.
The first thing was to get his U-4 form, which is the official record of a brokers employment,
transferred to Shuman Agnew. There are three ways a broker can leave a firm: resign, be allowed to resign,
or be fired. If youre fired, youre virtually unemployable. Allowed to resign meant that you did
something probably illegal but the firm wasnt going to prosecute you, and resigned covered all the rest.
After Johnson did the paperwork, it was transmitted by a new technology called faxing to both New York
and San Francisco. If Malte was going to fuck with him, this would the ideal time. Once the U4 transferred,
Maltes thunder had been stolen. While he waited for some response, he started on the paperwork to transfer
accounts.
Each client had to receive and sign a form agreeing to transfer his or her account, and that form and a
statement of the account had to be submitted through Shuman Agnew to Dean Witter. It sometimes took as
long as five weeks to complete a transfer, and at any point until the securities were under Johnsons control,
it could go wrong. The losing firm could make it go slowly or stop completely.
They worked on the transfer forms for four or five hours. Then things just stopped. It was anticlimactic.
Here he was, doing everything to take up his new job, and hed still not heard if he was legally employed.
He drove home that night, his hand tired, his mind still ill at ease, and in his way, he worried. He worried
all night, not sleeping, and he worried through the diarrhea and stomach cramps. He worried and eventually
got around to blaming himself.
He blamed himself for inciting Malte; he blamed himself for not being smarter about things. If hed
just left the picture, Malte might never have noticed. He blamed himself for not planning the move better
and for not telling more clients about the move and getting at least a tacit understanding that they would go
with him. He blamed himself for getting into this stupid business. Why couldnt he have stayed in the army?
It might not have been perfect, but he had been somewhat happy there.
Finally, in the darkest hours of the night, when the cold of the blackness seeps into the bones and the
sands of sleep shower on the strongest men, he got to the ultimate blame. Why was he even alive? No one
cared about him. He was a loser. He should have been dead, and all this was punishment for being drunk
that terrible day in December of 1971.
Finally, there came the stirrings of morning. Their year-old daughter Genene needed her diaper changed
and to be fed; the five-year-old Dean (named after Diannes father even though she professed to hate him),
who was an early riser, was thumping on the side of his bed. Johnson heard Dianne moving around in the
master bedroom, and his bladder needed to be emptied. He ambled to the bathroom to get ready for work.
Was it work, or was it the end of his career? The cramps started again, and he gushed into the toilet
everything he hadnt eaten for several days.
Feeling drained and washed out, he struggled into a suit and tie and drove to his new office. Sand Hill
Road ended in Interstate 280, and so it was easier to reach the office by freeway. Strangely, it took less time
to get to the new place than to the Palo Alto office. He eventually saw someone else walk into the building
and was embarrassed to find that its main door was open and had been, but after he got in, he was still
stymied by the office door. It was getting toward the opening of the markets, but no one was there.
Apparently there was no broker of the day, so he waited. He was sitting in the car, waiting and half napping,
when he noticed that the lights were going on inside the office. He had no idea how people had gotten in
without him seeing them.
Once he was inside, he met one of the other brokers, who was in fact the man of the day. He was tall
and very thin, athletic, with a big span of shoulders. His deltoids were so well developed that they extended
beyond his upper arms like a football players shoulder pads. His name was Dave Cosgrove, and he sat in
the first office to the right of the front door. It was the least attractive office in the place, as it had no outside
window and none looking into the interior of the office. It was totally inside. Johnson went to the office
hed been in the day before and sat down. He was in a quandary. At this point, making calls was almost an
instinct, but now he didnt know if he even had a job and therefore legal to make calls, so he tried to get the
Quotron to work, but it was inactive. He finally gave up and found a copy of the Wall Street Journal and
read it until others arrived.
At Dean Witter, by the open, there were always five or six brokers in, but here it was a full half hour
after the open before anyone other than the duty broker arrived. The first was Don Weed, an older guy with
the thin, wispy hair of the older and semibald. It turned out that Don Weed was the father of the guy who
had been living with Patty Hearst when she was kidnapped in 1974. Finally, a tallish woman walked in.
Im Sue Gardner, the operations manager, she announced in a not-unattractive, husky voice. She was
one of those women with a really small frame and bones, so she was very skinny. She had no breasts that
were apparent, but her shirt was tight over what appeared to be a very well-shaped ass. You have to fill in
these papers to complete the transfer; we have to do two sets since Morgan Stanley bought the place. We
have to do one for Shuman and one for Morgan Stanley. Its a bitch, but thats the way it is.
She dumped a pile of papers on the desk and turned and left. He was right; he observed a well-formed
ass that she shook well in the manner only women are constructed to do. He had to fight the urge to ask her
if she wanted fries with that shake. He stared for a bit and then launched into the paperwork. There was so
much, and his handwriting, always lousy, got progressively worse as he worked through the crap.
Lansing arrived about an hour later, looking like crap. He had a cigarette in his mouth and was trailed
by a smoke cloud; he looked like a blondish Wilowatty. He came to Johnsons office, and they talked a bit.
According to Lansing, Johnson couldnt call any of his clients until hed officially been hired by Shuman
Agnew. Johnson asked how long it would take and got a shrug of the shoulders. Johnson was upset, because
he knew that every day that passed, the brokers at Dean Witter wouldve worked over his accounts, and
fewer and fewer would be likely to move.
For the next several hours, there was a parade of the other brokers introducing themselves. The biggest
producer in the office was a fellow name Don Zeltoy. He was about fifty and was very nice but reserved
and seemed eager to do the civil and leave. The guy next to Lansing was an older fellow wearing glasses
named Ned Culp and it was obvious that he drank often to excess. The reddened cheeks and nose and
rheumy eyes were a reliable tell. On the other side was a nice-looking man named Lou Bergamo, who
Johnson found out later was the second-largest producer in the office. There was a father-son team of Lefty
May and Roger May.
About noon, the office manager, a very nervous man named Herman Seibert came in to say that hed
gotten a call from San Francisco. Bates told him that Malte, after a lot of prodding from Shumans lawyer,
had released him with the note of resigned.
Eventually, almost all of his accounts transferred. Much to his surprise, most of the brokers in the Dean
Witter office liked him and hadnt done much to pursue his accounts. There were a fewAlain Yacof and
unsurprisingly, Quitman, but most surprising was Bob McBridewho went after his accounts with a fury.
It was then and remained a mystery to Johnson what the motivations were of the various brokers. He tucked
that mystery away to think about later when we wasnt so busy surviving.
Morgan Stanley had purchased Shuman as an experiment to determine if Morgan wanted to get into
the retail business and, if so, what model to follow. On the East Coast, Morgan had assembled a team of
less successful institutional salesmen and a few senior brokers from other white-shoe firms. On the West
Coast, the model was to go with established brokers and further develop them into the image Morgan had
of its brokers. As with any blend of cultures, there were conflicts.
The first thing Johnson noticed was the difference in the offices. Because of the location at the end of
Sand Hill Road, there were almost no walk-in clients, which had been a feature of the Dean Witter office.
Johnson had done quite well harvesting the call-ins and walk-ins, and their absence was going to present a
challenge. Another difference was the noise level. It was believed that noisy offices were more productive
than quiet ones.
The theory behind the noise was that it was mutually reinforcing. When you heard a person pop up and
yell hed just gotten an account or made a big trade, it was stimulating and drove others harder. Most of the
trading desks were open arrangements, so the traders could hear each other and yell information back and
forth. To the outsider, it resembled hell. The natural voices of ego-driven men trying to be heard over voices
coming from telephone connections to other parts of the firm (called hoot and hollers) and the natural
noises of peoples habits blended into a cacophony that was at first maddening.
That anyone could hear the client on a phone with a deep, bass, Brooklyn-accented voice next to him
screaming, Hey, Joey, if youse is still wantin those fifty Hot Wet Pussythe symbol for Hewlett Packard
was HWP, and in the way of Wall Street, it was of course corruptedyouse is gonna haveta bid tree
eights! was amazing, but it happened every day, and for ten or twelve hours a day.
The other argument was that as you advanced in your career in dealing with retail or individual clients,
the caliber of the people as well as their net worth increased. They werent interested in crude jokes or
sexual innuendo; they were dignified and expected to be treated to a nice office that oozed professional and
quiet competence.
There was also a regional or geographical difference that changed the culture. On the East Coast, your
work was your lifestyle. On the West Coast, it was what you did to be able to choose how you lived your
life. While California brokers had to get up earlier, the afternoons were largely free. Whether it was an
afternoon round of golf, a flight to see a customer, an early dinner with the wife or lover, or a night of
carousing, it could start in the early afternoon.
If you were really diligent as a broker, you called to get trades during market hours and then prospected
in the afternoons. The East Coast guys had to do it all during trading hours, and after the markets closed,
they had to satisfy social requirements or slog home through New York traffic.
 All in all, Johnson was convinced that it was better to be in California. With such a radical lifestyle
difference, there were going to be conflicts within the ranks. However, for the moment, he thought hed
found heaven.
One of the most difficult things Johnson had faced beyond his own introversion and avoidance of
troublesome tasks and poor performance when forced to do things he didnt like was the overlap of
brokerage offices and the competition from other firms. The wire houses, like Dean Witter and Merrill
Lynch, had offices everywhere because their trade was with the everyday investor. But Morgan Stanley,
which occupied an elevated position, didnt chase every investor and didnt have an extensive branch
network. So Johnson now had the name of one of the premier firms on Wall Street to throw around, and he
had very little chance of crossing paths with another Morgan Stanley broker. Other than the Shuman offices,
there was no Morgan Stanley representation west of Chicago.
Strictly speaking, however, Shuman Agnew was an affiliate of Morgan Stanley, and Johnsons business
card carried the Shuman name in larger type with the affiliate status in a subordinate position. This meant
that they technically couldnt identify themselves as Morgan Stanley brokers. In the usual way, the rule was
bent. The name of Morgan was so prestigious, it wouldve been criminal not to use the leverage it implied.
At first, Johnson tried prospecting with the Shuman Agnew name, but it was about as productive as milking
a rock. No one seemed to know who the firm was, and fewer cared. So he swallowed his ethical standard
and started calling with the Morgan Stanley name.
Johnson didnt realize the promise and the peril of the name until one morning after hed been there
about six months. Hed taken to reading the local and national papers for the names of executives who had
been appointed to high-ranking jobs and who might be moving to a new city in the West. He figured that
since they were going to be new in the area, they might be looking for a new broker. One day, the Wall
Street Journal contained a story that a lady named Sherry Lansing had left CBS in New York to become
the head of the Paramount movie studio in Los Angeles. He called information and got the number of
Paramount Studios executive offices. About 9:00 a.m., he called, and recognizing the rising feminist trend,
asked for Ms. Lansing. After several clicks and transfers, a male voice answered, Ms. Lansings office.
Trying to sound nonchalant like he was a player, Johnson asked, Is Ms. Lansing in, please?
Yes, who may I say is calling?
Phillip Johnson of the investment banking firm Morgan Stanley. He figured that formal was better in
this case, so the full name and the firm ID was called for. What did he know? He was making this up as he
went along. Hed never talked to anyone in Hollywood, so he didnt know the lingo. A few seconds passed
(it seemed like an hour) and a very pleasant and somewhat sexy voice came on the line.
Good morning, Mr. Johnson. This is Sherry Lansing. How can I help you? He was stunned. This was
the most powerful woman in Hollywood, and she was calling him Mr.! He had really expected Hey,
shithead, and she was asking how she could help? This was truly a new beginning.
He stammered a bit and then took a deep breath. He said, Good Morning, Ms. Lansing, only to be
interrupted as he took another breath.
Please call me Sherry. And may I call you Phil, or do you prefer Phillip?
OK, this broad was starting to piss him off. She wasnt playing by the rules. She was a rich, important
person, and he was a jerk-off broker. She was supposed to be hard to get to and mean when you got there.
But here she was, being niceand polite to boot!
Phil is how my friends know me. He was proud of that little riposte, as it indicated friendship and
invited her into that circle.
She laughed and continued, OK. Phil, then. Where are you calling from?
Im in the Menlo Park office, near San Francisco.
I know it well. My first husband was a professor at Stanford, and we spent a lot of time in Menlo Park.
I wasnt aware that Morgan Stanley had an office there; I thought you were all in New York.
No, a few years ago, Morgan bought a small firm called Shuman Agnew that had offices in San
Francisco and here. In any case, Ms. Lanshe stopped himself short before continuingSherry, I mean,
the reason for my call today was that I read of your accepting the post at Paramount. I wanted to introduce
myself and the firm and offer my congratulations and welcome you to the West Coast.
 Well, arent you sweet? While Im new to Paramount, Ive been bicoastal for some time, since CBS
has a lot of production work here in LA. I kept a house here and an apartment in New York. Still do, as a
matter of fact.
Thats good. It must be exhausting going back and forth all the time and having to sleep in strange
beds in strange hotels all time. The other reason I called was that I know youve probably established
relationships with other financial types, but I was hoping that I might call you occasionally with an idea
that Morgan Stanley thinks is worthy of your attention. Hed worked hard to develop that line, and he
hoped it would work in its first trial by fire.
Youre a stockbroker? There was a subtle change in pitch, a hardening of the tone, and tenseness.
Hed imagined her leaning back in her chair before hearing his pitch and then becoming instantly alert and
defensive to the threat as she discovered his true identity.
Yes, I am.
Paramount is working with a number of investment banks, including Morgan Stanley, on a financing
package for our upcoming movies, and I was told that someone from the media group would be calling. I
thought you were either the stock analyst or one of the bankers.
No; Im on a different side of the firm. Its a big place, and I didnt know that you were in contact with
the bankers.
Look, Philmore tenseness and the harsher tone of voice of one trying to be done with a
conversationmy agent handles all my investment stuff. I dont even write my own checks. Ive been
with him a long time, and hes responsible for me getting this gig so I cant just fire him. I will do this: give
me your name and phone number and Ill pass it along to him, and if hes interested, hell get in touch.
Thats the best I can do.
Deflated and irritated, he gave her the information and ended the conversation. He looked up to find
the other Lansing in his life standing there, wreathed in smoke. Should have gotten the agents name so
you could call him and put the bitch on the spot.
About noon, he was sitting in his office reading the newspaper and eating a sandwich when Herman
Seibert and Bruce Van Alstyne came in. Herman was more nervous than normal, with sweat on his upper
lip and his right eyebrow twitching. Did you call a woman named Sherry Lansing this morning? Van
Alstyne demanded.
Yeah, I did.
Come with me. The three of them walked to the conference room, where Herman closed and locked
both doors and Bruce dialed a number on the speakerphone. After the connection was made and the
speakerphone enabled, Johnson was introduced to Tom Meltzer in New York. There was no preamble.
Meltzer voice screamed out of the speaker, Do you have any idea what youve done? Are you an idiot?
All three stood there. It was Johnsons place to answer, but all of them were shocked at the ferocity of
the attack. Well, I admit I might not be the smartest guy in the world, Tom, but Im not an idiot, and what
I did was to make a call to someone who might have been a prospective customer. Why?
Meltzer exploded, This is what I warned everyone about. Here we are, working on deal for four to five
hundred million dollars that will generate a four-million-dollar fee, and some asshole stockbroker may have
fucked it up trying to generate a fifty-dollar commission! By the way, its Mr. Meltzer to you!
Seibert stood there with wide eyes and more sweat on his face, Van Alstyne was plainly shocked at the
outburst, and Johnson was just plain mad. Bruce, sensing that Johnson was about to toss gasoline on the
fire, moved fast. Tom, this is Bruce. Look, Johnson has only been here a couple of months. He was doing
what were paying him to dofind clients and sell stuff. Thats why you bought Shuman. I think youre a
bit out of line here. Meltzer screamed some more about West Coast idiots and made vague threats to go to
the executive committee with the matter, but the conversation sputtered out.
As Johnson was leaving, Seibert said, Phil, might be a good idea if you dont call on Morgans
investment-banking clients.
How the fuck am I supposed to know whos a Morgan investment banking client? Its not like they
publish some fucking list. Who do I call if I want to clear a call? This last was said as Bruce pushed him
out the door.
 He was really steamed. Here he was supposed to be an employee of the firm and supposed to be
generating gross commissions, and now he was being chewed out by some shithead in New York because
he was doing his job. He steamed back up the hall toward his office, looking like a tornado forming. He
walked into his office, and before he could start beating the walls in frustration, Lansing, Culp, and Bergamo
came in.
They all wanted to know what hed done to fuck up. He told them with increasing anger about the
affair, and as he was going through it, both Herman and Bruce walked in.
Well, I hope youre happy, Johnson. Poor Tom is going to have a lousy weekend because of you.
Bruce with his craggy face was really good at deadpanning humor, and paired with Johnsons miserable
ability to discern what was happening, it created a wonderful situation.
Sorry, Bruce, I didnt mean to get anyone in trouble, and I intend to resign so that maybe this will
blow over.
Up yours, resign, said Bruce. If I had it in my power, Id make you a vice-president of Morgan
Stanley and let you work with that asshole. It would drive him nuts. The guy is a total prick. If you pissed
him off, good for you! Everyone laughed, including Johnson. With an admonition that if a client told you
they were doing anything with Morgan, it might be a good idea to end the call, they all left. But his story
would quickly become legend at Shuman.
The remaining months of 1978 and all of 1979 were glorious for Johnson. He started to dress differently,
like he was a real investment banker (or what he thought an investment banker should look like). He
prospected endlessly, and with Morgans name, he had access to all sorts of people who were off-limits to
most others. He was still not terribly successful closing accounts, so the account relationships came, but not
at a rate commensurate with the prospecting he was doing.
Hed discovered a publication called a transactions-and-intentions (T&I) report that listed all the
restricted-stock transactions in the country. With his knowledge of restricted stock, it was a gold mine.
Soon he was putting up Rule 144 and Rule 145 sales like nobodys business. As he developed this business,
he came more and more in contact with the Morgan Stanley folks, some of whom called him for clarification
on various points. He helped the guys in the office get business done, and so he bonded.
In the way of all things, the good times couldnt last. By 1980, Morgan Stanley had owned Shuman for
four years and decided it had practiced enough with the shape and form of the brokerage industry.
The technology being developed in the Silicon Valley down the road from Johnsons office and outside
of Boston was changing the world, and the pace of change was increasing. Computers were getting smaller,
less expensive, and more powerful, so their number was expanding. This allowed more rapid processing of
orders and therefore increased the volume the exchanges could handle. The increased volume created a
self-fulfilling prophecy, and the volume generated by the industry increased. Institutional investors were
getting more and more money to manage as the pension funds moved away from in-house management and
increased their allocations to stocks. At the same time, the bond markets were alive with demands for
financing, and Europeans and Asian banks and brokerages began to be seen in the canyons of Wall Street.
The markets were still struggling with the after-effects of the oil shock and high inflation, but in 1978,
the Federal Reserve began to take action to control inflation and President Carter looked like he was going
to have trouble getting reelected, which was a positive sign. The Dow, after hitting bottom at 575 in 1974,
had moved up to the 650 area and was showing some signs of life.
After all the company failures during the bear market, the remaining firms had gotten stronger and
consolidated their power. The underwriting side was still dominated by what were called the bulge bracket
firms. When a firm sold stock or bonds, it issued a prospectus. On the front cover was a list of the
underwriters. There were some that were always at the top, and those firms took more space than the ones
underneath, thereby creating a bulge. Underwriting securities was still very profitable, and all the firms
competed fiercely for business. Morgan Stanley was always at the top and always on the left, which was
the command position. Morgan had a rule that it would never be in second position on any deal.
Johnson was firing on all cylinders. He was fielding a lot of business and developing a lot of accounts,
and that seemed to make Herman happy. He didnt have the trading accounts that some of the guys had or
the powers of attorney that allowed him to trade without the laborious calling and selling each client. He
was, however, sorting out the various personalities in the office and the industry.
There were the older guys like Lefty May and Don Weed who were part of the group known as the
Sandbox Boys. These were those who had joined the industry after service in World War II and were now,
in the 1980s, reaching the end of their careers.
A second group was of the guys a bit older than Johnson, in their late thirties to their fifties, who were
at the height of their powers. Theyd lived in a bear market most of their careers and had fought hard to
develop business. This had made them about as tough-minded a group as there was. Theyd endured endless
rejection, years of low pay, and constant harassment and denigration. They lived for the day when a bull
market would reward all their loyalty and hard work. They nurtured in their breasts the idea that they
deserved something better.
A third group were those who had somehow managed to survive despite being total idiots and fools.
The industry was a great catchers mitt, which seemed to hold on to all that was pitched to it. The audience
for investments was so broad and people so malleable that there were clients for all the brokers, to some
extent. These brokers might not everand in fact never wouldbe top producers, but they could survive
and generate a decent if not spectacular income. Many of these men seemed to lack ambition or drive. They
justified their positions by developing arcane rules, such as never buying a stock that wasnt a double
sevena price-to-earnings ratio of seven with a 7 percent dividend yieldor companies that sold at less
than tangible book value. What they rejected was that the brokerage industry was more about sales than it
was about investment prowess. After all, even a moron like Johnson had figured out that brokerage, by its
very definition, meant that the only way a broker made money was to buy or sell things. These guys resisted
that, and as a result, they were mediocre and always would be.
The firms kept them on because you never knew when one of them might catch on and blow out of his
band. As long as they didnt cost the office any money, they were useful idiots, as their revenue paid the
bills.
Then there were the superstars. These came in all sorts of packages. There were some, like Lansing and
Davis, who were good stock pickers, and that led to success and to being referred to other clients. There
were others like Culp who had been lucky along the line and, in his case, gotten appointed the trustee of a
very wealthy womans trust. The account was so large, he could just drift along. There were guys like
Zeltoy who had complex, unusual methods.
Then there were the ancestral rich. There was one fellow at Shuman whose family owned a major
winery, another whose family dated back to the thieves and bums of the First New York Volunteer
Regiment who came to the Bay Area in the Mexican War and stayed, selling the place to the gold-rush
immigrants and becoming fixturesand rich. Finally, there were those who were just great salesmen and
could sell ice to Eskimos or sand to the Arabs.
So they drifted along at Shuman in a hybrid state, neither fully Morgan Stanley nor fully independent.
Johnson made as much use of his association with Morgan as he could without incurring the wrath of the
gods of New York, but he always felt he wasnt succeeding. Sure, hed bring in a customer for a sale, but
he never seemed to be able to convert the initial sale into a continuing relationship. His pride didnt want
to admit that he wasnt doing the job well, but the size of his restricted-stock transactions kept his gross
climbing and management happy. He accepted the kudos of success for the sale and hid his angst for not
converting.
In the future, hed look back on those days and wonder how theyd ever survived. The firms still got
their news from Dow Jones via a news wire that was printed out and had to be cut and hung in the office
by the hour it was received. If a stock started to move, the brokers who were interested hustled over to the
tape to look for articles explaining the move. On Thursday afternoon, the Federal Reserve would issue
figures on the nations money supply, and this was considered to be the critical number of the week.
Usually, one of the fools would position himself near the tape machine, and when the number was printed,
would shout throughout the office. M-Two up five billion!
Everybody in the office would suck their teeth or swear or something, and then things went back to
normal. Johnson wondered what the big deal was. To the shop owner in San Jose or the Intel employee, the
only money supply that counted was what they folded into their wallets. He guessed that it was important
to greater minds and that someday, he might actually understand what it meant, but not today.
All the firms employed stock analysts whose job it was to research companies and provide buy and sell
recommendations to the brokers, who in turn would call their clients and whisper in a semi conspiratorial
manner, Mr. Smith, our analyst is about to recommend Consolidated Toilet Paper. The stock has been
pushed down in price in recent weeks, and our analyst just got off the phone with the management and
believes this is a coiled spring, Mr. Smith. A coiled spring! And with the release of earnings next month, it
should shoot up in price. Would you be comfortable with five hundred shares, or would one thousand be
better?
Sometimes, the sales pitches were so obtuse that Johnson wanted to run around screaming, Metaphor
alert! There were coiled springs, whipsaws, speeding bullets, and smashing resistance lines. There were
solid supports, unassailable business positions, home runs, and grand slamsand his particular favorite,
the dead-cat bounce. They rolled on, limited only by the human minds ability to string word pictures
together. And they worked.
When an analyst wanted to discuss his new recommendation, hed arrange a conference call, which in
the 1980s was a new service offered by the telephone companies which were still struggling with the
breakup of AT&T or Ma Bell as it was called. It was rudimentary and usually could connect only to a single
phone in the office. The speaker was in the phone, and the microphone for asking questions was in a little
box that also turned the system on and off. The quality of the call was subject to all the vagaries of the
telephone service. This poor quality was magnified by the noise made by twenty-five men in a single
roomburping, farting, whispering about the sales assistant with the tight blouse, rattling papers, smoking,
drinking coffee, and all the other things people did.
One of the Shuman analysts was Charles Buicker, who followed the oil-service companies and was
nicknamed Dryhole. In fact, he signed his reports that way. Johnson always wondered if there wasnt some
sexual double entendre implied. One day, it was announced that Dryhole had a new recommendation, so
everyone trooped to the conference room.
Dryhole followed two stocks with similar names. One was Varco and the other Barco. On this day,
Dryhole wanted to talk about Varco, but the transmission was so poor no one could ascertain if he was
saying Varco or Barco. As Dryhole talked, everyone was straining to hear which stock it was, and when
Buicker paused momentarily, one of the brokers in Johnsons office said, Charlie, were having a bit of
trouble hearing you. Are you talking about Varco or Barco?
Dryhole said the name of the company but it came out garbled again, so Louis Bergamo said, Charlie,
still didnt get that. Is it Varco or Barco?
Buicker, clearly exasperated, shouted into the microphone, Varco, Varco! V-A-R-C-O! V like in
vagina! This collapsed everyone into laughter and crude jokes.
In the past, all they had was the Shuman research team, but after about two years at Morgan, Johnson
began to notice more of the Morgan Stanley guys speaking. At one point, he was asked by Morgan in New
York to attend a meeting at the IBM plant in San Jose and report back to the computer analyst, Dr. Ulric
Weil. He considered it a high honor and listened carefully to what the company said, but it really made very
little sense to him. Still, he dutifully repeated the information in a late-afternoon call to New York. It was
5:00 p.m. in California, but Ulric Weil was in the office in New York at 8:00 p.m. Johnson was impressed.
The next day, Weil reported what he had passed to him and even gave a backhanded attribution by
saying that one of the brokers on the West Coast had attended in Ulrics place and done a good reporting
job. Johnson was filled with sinful pride and created the concept that hed be asked to do it again and that
Morgan Stanley was aware of his developing skills. This was dashed a few days later when he was told that
Herman had picked him after a request that someone, anyone, go to the meeting.
In August of 1980, the word went out from on high that all the brokers at Shuman had to attend a
meeting in early September in the boardroom of Wells Fargo Bank in San Francisco. They were told that
only family emergencies would be a satisfactory excuse for missing the meeting and failure to attend would
result in termination. In a hothouse of semiexperts, the rumors started flying.
 I hear this meeting is going to be with the head honchos from New York, and theyre going to close
Shuman down.
No way had they paid too much for the firm, but they wouldve paid more if that asshole Iver Lyche
hadnt sold his soul to be a managing director of Morgan. No, theyre going to expand us and hire a bunch
more brokers.
Thats not the way Morgan works. Theyre going to pick and choose, and then theyll hire a few big
producers to get the gross up and add a few more each year. All the young guys like Naylor, Lucas, and the
rest are toast.
So it went. It was the topic of conversation for weeks, and each time someone came down from San
Francisco, each statement made or hint dropped was parsed and chewed on for hours. In some ways, all of
them had some half-truths, and these filtered into the canyon of ignorance. If someone had taken the time
to sit down and pull all the strings together, they would actually have spelled out what truly happened.
On the appointed day, they drove or carpooled to the city. The meeting was at 3:00 p.m. so that the
minimum of production time would be lost. As they arrived in the spacious boardroom, there was a lot of
handshaking and greetings between the brokers, who for the most part had known each other for many
years. There were only a few new guys like Johnson.
At the head of the table were the triplets: Anson Beard, Dominic Mac Caputo, and Tom Meltzer,
managing directors all. They embodied the story line that they and a few others represented the new blood
of the firm, a breaking of the brains-and-blood credo; after all, one of them was a Jew and another an Italian.
In the old days of Morgan, those guys would have been the shoeshine boys.
The triplets were introduced by Iver Lyche. Of course, Meltzer needed no introduction to Johnson, who
had formed the opinion that he was a subhuman scumsucker and whose presence did nothing to reassure
Johnson about his future. After some preliminaries, some social lying, and poor attempts at humor, Anson
Beard took over. What came next would shape Johnsons view of the industry, and he could remember in
vivid detail most of it verbatim.
After some preliminary remarks, Beard got to the heart of the matter. As you know, Morgan has been
experimenting with how to enter the retail business. We werent interested in duplicating Merrill Lynch or
Dean Witter, so we had to figure out a sustainable model that satisfied Morgans requirement for return on
capital and equity.
We started out by studying the publicly held firms in the industry so we could get comparable data.
We finally determined that A. G. Edwards was consistently the most profitable firm in the industry. We
took their earnings and revenues apart to see why.
We discovered that none of the major retail firms made money from commissions generated from
buying and selling stocks and bonds. They made their money from holding and using client assets. In other
words, the interest float on client cash balances. A few thousand dollars in each of a half a million accounts
adds up to a lot of interest income. This leads to the conclusion that the brokers arent in the business to
trade stocks; theyre essentially bank tellers. Their function is to bring in client assets.
Beard paused for a moment. It wouldve broken his image of perfection to do something human like
clear his throat or take a sip of water, so the pause was for effect. It failed. Most of the brokers in the room
had no idea what interest float was. Their whole lives had been built on the concept that their commissions
were vital to the firms profits. Then Beard continued. Since the real function of a wire-house broker is to
gather assets, the firms create a lot of products so every broker will have something to sell to gather assets.
This leads to increased expenses since the products have to be supported, so most firms lose money on the
product but make it all on using the client assets. Morgan is determined to do things differently. Johnson
sensed that the next few statements were the guts of what was to happen.
In New York weve assembled a group of brokers, some of whom were institutional salesmen who
have converted to retail, some are established brokers from other firms similar to Morgan Stanley, and
others are from retail firms. Here in the West, we purchased Shuman Agnew to see how you worked out
here with brokers who had largely been retail for their entire careers. Now were ready to roll out the future
of the firm.
 The expectation in the room was as thick as cold molasses. Most of the men there had just been told
that what theyd done in their careers was likely no longer the way things would be done. All of them had
been bank tellers, and all of them had facilitated the use of client assets by various firms. Beard had just
told them that this wasnt the way to do business. Beard continued, Weve come to understand that the
key to making money in the retail business is to have the brokers sell fewer products with larger
commissions per trade and to hold down the costs by not servicing a myriad of products. We believe that
the proper commission level for a broker is a thousand dollars per day.
There was a collective intake of breath. The average production month was twenty-two days, so at a
grand a day, each would be producing $22,000 per month or $265,000 per year. Beard had let it be known
that this was the expected level for the average broker. A broker at that level was taking home about $90,000
per year, which was a huge income. Yet here was Beard, telling them that this was what the average broker
at Morgan should be doing.
I mentioned, said Beard, that there would be a limited number of products. Those we do offer will
be sourced out of New York. There will be no muni-bond desks on the West Coast, no corporate bonds,
and no investment banking or research. Trading will continue for a bit, but all trades will be routed to New
York.
Again there was an uneasy shifting in chairs and worried looks all around. Shuman had twelve analysts
in San Francisco, three muni-bond traders, two corporate-bond guys, and a couple of investment bankers.
What was to happen to them? Everyone wondered. Shuman had been very much like a family. All the
people in the firm had known each other for a long time and had worked together for years. Now they were
facing the fact that some of them would be fired, and that would hurt.
Morgan Stanley, regardless of the stories, is not a bunch of rich guys trading family money. What
were interested in is new accounts, so trades done in family-related accounts will be paid fifty percent of
the normal payout.
There were six brokers in San Francisco who came from large family money, and theyd just been told
that they would have their income halved overnight or they had to go back to work and develop a clientele
that would satisfy Morgans demands. The level of discomfort was rising fast, and there was panic in the
eyes of many.
Beard continued for some time with other comments, and then he summed up: So, to run the offices,
weve appointed Mac Caputo to run the New York complex, and Bruce Van Alstyne will run the West
Coast. There was a murmur of acceptance, since Bruce was well liked and viewed as a fair guy. This was
one of those really difficult times where the first act was so powerful that anything that followed was going
to be second-rate.
Here were a bunch of people who were all pretty senior in their careers and who had banded together
to form a firm that would give them more control over their production and income. Now, in a brief blink
of an eye, all the sense of safety and control was gone and they were all back to being cold-callers and
hustlers. Bruce ambled up to the front, stood there for a second or two, and then slowly said, I now know
what its like to get a high enema with Drano!
 Chapter 21
Life and Other Shit
The high enema with Drano had the desired effect. Most colonics accomplish their work in one or two
rushes, but the Morgans Drano took a bit of time. Brokers, traders, analysts, and bankers left, and subtly
the mood changed from comfort to one of uncertaintywhich was exactly the effect Morgan wanted.
Uncomfortable people work harder to stay in their seats. There was a lot of complaining and cussing Morgan
out, but Johnson was energized. His progress had been steady and profitable enough for his family to live
comfortably. He probably wouldve made more progress if that terrible thing called life hadnt interfered.
Phil Johnson didnt like himself. He didnt like his looks, his lack of athletic ability, the quality of his
mental facilities, or his ability to relate to others. His dislike came from his interpretation of the big
influences in his life.
The base was the influence of his fathernot that he and his father had been close; far from it.
Johnsons father was career army. He had fought in two wars and spent a total of six years in combat and
over his army career was separated from his family most of the time. Even after his father retired from the
army, hed joined a company and traveled two weeks of every month. Boys grow to be men by watching
other men, and in a vicarious way, Phil Johnson had learned a lot about being a man from his absent father.
Phils image of his father was probably unrealistic, since it was based not on actual observation but legend.
The second was Phils introversion. It wouldve been romantic to lay his inward focus on some specific
causethe frequent moves, lack of lasting friendships, or a poor social circle. That wouldve too simple.
He was just wired differently. Stoicism was the family trait. Phil was volatile; he felt hurt, real or imagined,
deeply and showed it obviously. He found most people disappointing in the long run. He lived at odds with
his soul, creating tension most often exposed in his terrible temper. The temper made him vulnerable.
The final influence was his intelligence. Hed deny that he was blessed, but Phil had a fine mind. The
problem was that it was unfocused. His introversion had made the social pulls and tugs of school a
monument to his unhappiness, and he hadnt been a good student, at least on the surface. He had a mind
that could remember incredible amounts of fact, which he poured in with almost constant reading. But by
the objective standards of school, most people had thought of him as dumb.
There were few who paid him the attention to understand him and fewer still that did anything to bolster
his weak self-confidence and low self-esteem. The feeling of low self-worth didnt give way to humbleness;
it gave way to him quitting when things got tough. What he was good at came naturally, and those things
that needed practice he didnt do well, justifying his failure with I cant do that or That isnt important.
He extended his harsh judgments to others, but there was no one he judged more harshly than himself.
He judged himself as ghastly, because he wasnt good with girls. He condemned himself as stupid, because
he didnt get good grades. He was always looking down on himself, and he developed a negative self-talk
about his abilities that reinforced and deepened his feeling of inadequacy. Even when he accomplished
something like learning to fly a helicopter, one of the most difficult feats in aviation, he denied it was any
big deal.
His self-image was low, but his desire was high and never satisfied. This most manifested itself in an
inability to relax in any endeavor. Great pilots are relaxed and intuit the aircraft while being constantly
mindful of the physical and mental disciplines needed to fly it. Johnson could never relax. He was more
afraid of mistakes than success and too afraid of having someone judge him inadequate to relax. He thought
himself through every maneuver while flying. It was OK if he judged himself inadequate, but he believed
that any mistake he made would lower others expectations of him.
Hed denied himself the comfort of a social group by his introversion, volatility, and judgmental nature,
but that didnt mean he didnt want the affirmation of a social group. While he fancied himself a loner and
unique, he was neither, and in his heart of hearts, the contradiction of lack of social skills and desire to be
accepted created tension that led to more anger and more isolation.
Hed struggled mightily against long-cultivated self-deprecation in the years since he entered the
brokerage industry. His new profession called for just the social skills he had eschewed all his life. He
needed an intuitive sense of the direction of a conversation with a client or prospect so he could steer it to
a favorable conclusion. He instead showered them with fact and expected they would see the wisdom of
his knowledge. When they rejected him, it was affirmation of his worthlessness. There was always more
rejection than success, so his unhappiness mounted. All the things of ordinary life piled in on him. They all
competed for the front position in his brain, and at this point, there were plenty of distractions.
His father had been diagnosed with a rare, incurable disease in which an amyloidal substance built up
in the blood. It destroyed the blood-filtering organs and then clogged the arteries. The prognosis was death:
slow, painful, and 100 percent certain. His father had lied to Phil about his condition and made light of it,
but Phil had been around him enough to see the lie. Phil didnt see his father often, since his mother and
father lived in Pennsylvania and Phil in California. It ate at Phil to see this vital man wither away without
hope. There was nothing Phil could do, and it bothered him. It made him feel inadequate that he was
helpless.
Shortly after the Colonel got sick, Uncle Bob had died. Bob had been the legendary uncle that all
families have tucked up in the leaves of their family tree. He was grossly overweight, a heavy drinker, had
table manners that wouldve made a Viking berserker seem mannerly, and was racist, sexist, and the
purveyor of an endless stream of profanity and bad jokes. In short, for two teenage boys, he was a dream.
Bob had introduced them both to beer when respectively they were twelve. His father hated Bob for reasons
never spoken.
Bob had lived with Phils grandmother and helped support her. Grandma had never recovered fully
from falling off the roof of her house at age ninety-four. She seemed to think it was normal for a
nonagenarian to be putting on shingles. With the death of Uncle Bob, grandma couldnt live in her house
alone, so shed moved in with Phils mother and father, adding to her daughters burden as she now had to
care for two invalids, both of whom ranked in the top five of worlds worst patients. So Johnson, who
expended huge amounts of energy worrying, had three more worries to add.
With his own high standards and the pressure from Morgan Stanley, he should have had enough on his
plate. Its said that God does not give us more trouble than he knows we can handle. Johnson started to
wish God hadnt had such a high opinion of him. And now, Dianne began to demonstrate some disturbing
characteristics. Shed always been a bit weird, but it had been in bursts. Now episodes of eccentricity were
coming closer and closer together. At first, hed seen it as cute, but the lack of memory for events, the
constant misremembering or selective memory, and her lack of command of the language, made worse by
being around two small children, were starting to be troublesome.
Physically, she was a head turner, but she was embarrassing to take places, as she always turned the
conversation to some poorly told, old story about her accomplishments at age three and a half or five and a
half. Nothing in her life seemed ever to have happened on the year; it was always on the half year. She
endlessly relived her past life: her dancing, dating, and her trip to Europe in 1971. A good story well told
can be repeated a hundred times, but Diannes stories were banal, disjointed, and told with lapses in critical
detail that made the listener tune out.
Dianne tried to find ways to claim more and more of his time. Dianne had always made the physical
part of marriage synonymous with love itself. If sex wasnt available, you didnt love her any more. Johnson
really enjoyed sex. In that aspect, Dianne was every mans dream. She never used the shopworn excuse of
a headache to avoid sex. They had sex all during both pregnancies. When it was right for her, it was a ride
in heaven. Even when it wasnt right, it was good. She was always ready, so there was no downside for
him.
His Vietnam wound, though, often prevented him from becoming fully erect, so he got what in slang
was a semi. The scar tissue from the operations would create friction points. When he ejaculated, the
placement of the scar tissue made it hurt like a hot poker had been applied, so sex was never as enjoyable
for him as it was for her. Because sex was so fundamental to her, Phils failures resulted in Dianne being
unhappy, and that put more pressure on Phil.
Dianne shoved him full of vitamin E and oysters (both supposed to be aphrodisiacs). She prattled on
endlessly about various food supplements that would increase his sex drive and performance, and she was
never satisfied. If they had sex twice a day, shed want it three times. Do it three times, she wanted more.
In hotels, if there were two queen beds, they had to have sex on both sides of both beds. Most men, if you
listened to the gossip, wouldve killed for a wife with those appetites and wouldve come away tired but
happy. Johnson was just tired.
A few years after theyd been married, one of Diannes sisters revealed that their father had molested
her. On this revelation, the older sister said that she too had been molested. As horrible as it might have
been, he couldnt get himself involved. It wasnt anything he had done and he could do nothing about it, so
he gave it little thought. He was sureat least Dianne had saidshe hadnt been molested. In her usual
way, she would declare that if her father had tried to touch her, shed have killed him. When Johnson told
her that was unlikely, she began a long, disjointed story about how shed kept her father from beating his
wife, and there was something about peas in there too.
Shortly after the revelation of molestation, they were driving to Los Angeles for some boondoggle or
other. Just as they started up the long climb from Bakersfield to Gorman on I-5, she said in an offhand way,
I hope you never do to our kids what my father did to my sisters.
Johnson was so surprised that he had to fight for control of the car. His knuckles were white with anger.
His jaw set, and the muscles at the angle below the ear stood out prominently. He looked at her, taking his
eyes off the road, which was a dangerous dalliance in that area. Why would you even think that Id do
something like that, and why do you even think its appropriate to say something like that with the children
in the backseat!
I just felt that God was telling me to say it. Sometimes I dont know or control what Im saying. The
spirit just moves through me, and words come out. I know that you cant understand that, but thats the way
I think.
You can think any way you want, but theres such a thing as proper place and time, and this wasnt
it.
Dont worry about the kids, she said dismissively. They dont know what happened, and if someone
told them, they wouldnt understand what it means. This made him madder. Their son had a mind like a
sponge and stored away information that would come out later at perhaps less appropriate times and
circumstances. He hoped the little monster was asleep. See, you always get mad when I say something
and you start yelling and never let me finish my thought. Its really irritating. You treat me like Im an idiot,
but Im not. I may not have all the degrees, but those dont prove anything. I have a very intelligent brain.
They drove the next two hours in silence. As they drove up to the sisters house, the sisters car-
salesman husband was in the driveway, a cigarette in one hand and a beer in the other. As Johnson got out,
Kim said in front of Dianne and the now-awake kids, Hey, its the only girl in the family that wasnt
sexually molested! with a huge smile on his face. Diannes face dropped, and Johnson was first taken
aback but then started to laugh at the sheer vulgarity of the comment.
Late that night, as he was reading to his son at bedtime, the boy looked at him and asked, Were Aunt
Tiffany and Aunt Donna molested by their father?
Diannes demands began to spread to his business life. Morgan Stanley paid for its brokers to travel to
clients. Johnson took advantage of the perk to develop business in places like Seattle and Albuquerque.
Dianne began to ask to be taken on trips. Shed always said that one of her goals was to travel, and it was
obvious that she resented his ability to dash off. Johnson tried to explain to her that business travel wasnt
a vacation. He worked hard on his trips out of respect for Morgans generosity.
Dianne was convinced that he was lying and that it would be fun for her to go along. He took her on a
few of these trips after carefully showing her his schedule and how little time there would be for them
together. The trips were sheer misery. Her demands were endless, and her complaints about how little time
they had together were nasty, with the tinge that he was lying. She even suggested that she come to some
of the meetings. It was obvious that Dianne felt left out of what she had fantasized was a glamorous life of
travel. She began to equate lack of invitation to travel with rejection of her love.
One day, he was sorting through the mail and noticed a bill from a male obstetrician in San Jose. Dianne
had insisted on a female ob-gyn. This bill wasnt from that doctor. He opened the bill to be faced with a
number in the area of $2,000 titled only medical procedures. He assumed it was a mistake and put the
bill in his briefcase to take up with the medical-insurance people.
 The next day at the office, he called the doctors billing service and learned that the doctor was
associated with Planned Parenthood and primarily involved in providing women with what were called
reproductive options. The light still didnt go on in his head. He asked Dianne that night about the bill,
and she got very ashen faced and started to stammer and bluster about what he was doing opening her mail
and where was the bill, shed take care of it, it had to be an error. He trusted her but was growing suspicious.
He was like a terrier after a rat; he wasnt going to let this one go.
He called one of his clients who was a cardiologist and asked him if he knew the doctor in question.
Cal was very forthcoming. Hes an abortion doctor, and reproductive options is the current code word
for an abortion. Planned Parenthood is basically a no-questions-asked source of information and medical
procedures related to pregnancy. They dispense birth control pills and perform sterilizations and abortions.
Johnson was stunned. He didnt know what to think, and it was obvious to everyone that something
bad had happened. He went into full detective mode. Dianne had taken up racquetball after the birth of their
daughter and played three to four times a week at nearby club. The club racquetball pro was a sleazy-
looking Iranian named Serope.
One day, he was at the hardware store and ran into a woman who knew both of them and had played
racquetball with Dianne. She revealed that she no longer went to the club, and he asked why. I just got
tired of the place. Too many people, always crowded, and some of the people werent very nice.
From what Dianne says, the main attraction is the racquetball, and she swears by the pro.
Well, thats a whole other story, she said, looking around as people do when theyre about to say
something they dont want overheard. That dirtbag Serope is really something. He has all those women
who flock around, but I cant see what they see in him. Hes not even a very good player. I used to beat him
five games out of seven all the time. I hope hes better lover than player.
You think hes hitting on all the women?
The only thing getting laid more than Serope is eggs at a chicken ranch! was the reply. He doesnt
care who they are. He seems to know which ones are easy or lonely.
His feelings about the nature of what was going on were fully engaged, so he took a foolhardy course.
He decided to call the doctor whose bill had started this to see if he could confirm what he suspected. He
decided that what hed do is pretend to be a representative of Aetna, who carried the health-care plan.
Dr. Hamandis office.
Good morning. Im John Driscoll, calling from the Aetna Company. Is the doctor in? He got it out
without stumbling.
The doctor is in, but he has a patient in just a few minutes. Perhaps theres someone else who can help
you?
Thank you for the offer, but this is matter of some sensitivity and I think the doctor would be the best
one to answer the question. I only have one, and I promise it will be short.
Perhaps you could tell me what you need to know, and I could ask the doctor and get back to you.
He had no number for her to call back; certainly not one that would answer as Aetna. So he went for broke.
Thats a very kind offer and normally Id take you up on it, but this is really something the doctor is
going to want to answer for himself. I really dont want to escalate this when a simple answer will do the
trick. He used a voice with a touch of disdain and arrogance and placed emphasis on the word escalate,
knowing that in the health world, it was code for lawyer.
There was click followed by a heavily accented voice. Hamandi.
Yes, Dr. Hamandi, this is John Driscoll of Aetna calling.
Yes, yes, what is it? Im very busy; I have a patient in a few minutes.
Doctor, did you perform a first-term abortion on a woman named Dianne Johnson on May fourteenth
of this year at your clinic?
Yes, I remember the case well. She was very upset and wouldnt wait, wanted the procedure done as
fast as possible, so I did it that day. Is there something wrong?
No, no, Doctor, we carry the health insurance for the company her husband works for and he has
questioned the procedure and if its really for his wife. He has no knowledge of her being pregnant and
knows they didnt discuss an abortion since his wife is a devout Catholic.
 My practice would die if not for all the Catholics who get pregnant and have abortions. Theyre such
hypocrites, was the doctors amused reply. I didnt get the impression the fetus was her husbands. She
refused to identify the father, and that usually means an affair.
Johnsons heart was sinking, but he was also mad, so he decided to go for one more piece of evidence.
Ah, thank you, Doctor. One last question. Are you acquainted with a man named Serope Menasch?
Serope! Serope is my nephew. Why do you ask? Is this related to the abortion somehow? The doctor
was getting worried and had made the connection. Johnson had to end this quickand did by hanging up.
One of the peculiarities of external genitalia is the occasional horrific pain of impact between them and
the toe of a shoe, for example. The pain is so intense that most men curl into a fetal position and lie there
moaning as the pain runs its course. Even after the acute pain has passed, theres a lingering ache sometimes
for days that makes the man walk like he has a pole up his ass.
Hed just been emotionally kicked in the balls. He wanted to believe Dianne. He was supposed to
believe her without question. Wasnt that one of the tenets of marriage? Now he faced the fact that shed
lied, and lied about a number of things. First, of course, was the affair with Serope; then there was the whole
question of the abortion.
The pain of her betrayal was incredible. He sat at his desk and looked out, glassy-eyed and unfocused,
as thoughts raced in his mind. She had cheated on him. Should he divorce her? What would happen to the
kids, and what about him? He doubted he could find another woman to marry him. Besides, there had never
been a divorce in his family. How could he face the rest of them? How could he hide his feelings now that
he knew? Was he a good-enough actor to carry it off?
Should he beat the shit out of Serope? Should he cheat on her in a tit-for-tat arrangement? What was
he going to do? He pondered all day, knowing that he had to go home that night and face her. There were
decisions that were brave and decisions of cowardice. The decision of courage would be to divorce her and
shame her with the violation of trust and of her faith. The decision of cowardice would be to let it go and
not call her to account, just because it would be difficult and messy and would distract from his business.
He had enough on his plate: sick father, developing business, growing kids, family obligations, and
increasingly, the pressure of Morgan Stanley. The easy way was not to do anything and just let it go.
In the end, he was a coward and decided to try to carry it off as if nothing had happened. It wasnt easy,
because his face was a map of what was important to him at any moment. He finally rationalized his decision
by convincing himself that it really didnt matter and that it had been his fault in the end. If he had made
more money and was more successful, she wouldnt have been tempted to stray. Yeah, it was his fault. Life
had handed him another fuck-up just like all the rest, and he just accepted it.
There were a few other things haunting him. Hed been walking back to the office from a lunch at the
local caf when some utility workers dropped a large, steel plate. As the plate slipped off the crane, one of
the workers yelled, Incoming! The next thing Johnson knew, he was crawling out of a flower bed,
brushing the sticky, wet bark used to cover the ground from his suit.
While that was one of the most obvious demonstrations of his problem, it wasnt the only one. His
reaction to being startled by anything from his kids being in the wrong place or not seeing a car behind him
was getting extreme. Hed scream and yell, giving the other driver the finger, or hed yell at the kids. He
also began to have more and more trouble concentrating on difficult or complex tasks. It wasnt that he
didnt try, but his attention would wander, and once it did, he was finished. Even his formidable memory
was failing him.
He had no energy. He had a rough time each morning getting up to go to work, and when he was at
work, he felt tired and run-down. The others seemed to be bursting with energy, but not him. The tiredness
began to filter to his phone calls, and he developed a flat, monotone voice that indicated to the listener that
he was just going through the motions. He increasingly felt that the future held nothing for him and that the
world or God or whoever was in charge had singled him out for all the problems he was having. Nothing
was ever good anymore.
Then there were the dreams and flashbacks. The dreams were draining, and he relived event after event
in full detail with flowing blood and dead bodies. He saw again the picture through the gun sight on the
eight inch howitzer that sent two two-hundred-pound artillery rounds into an innocent village and heard the
chilling words of the observer saying, Might want to call the MACV, guys. Theyre going to have to
explain all those dead bodies.
He saw the figure of Joe Torkelson, his burned body hanging off his burning helicopter, and the NVA
soldiers shooting Dave Todd, the observer, like he was a rabid dog. He relived the return from daily flying
to find out which of the unit was dead or missing. Finally, he saw that horrible day in December when his
life seemed to endor at least, his life seemed no longer worth living.
The dreams were bad enough, but the flashbacks during the day were, if possible, worse. Hed see a
picture of a soldier in a paper with his rifle raised, and hed flash back to the day in the jungle when he was
the soldier pointing his rifle at another person and empting his twenty-round magazine into that enemy
soldier. His eyes would be wide open, but hed be staring with an unfocused view and a terrified look on
his face. People who saw him thought he was having a stroke or was dangerous, so he was avoided. He
knew that people were whispering about him in the coffee room, and it angered him.
The dreams and the fear of the dreams made it impossible to get the restorative sleep he needed to deal
with the long, grueling hours his work demanded. This fed into a vicious cycle of lack of sleep, fatigue, and
loss of memory, irritation, anger, and his feelings of shame over what hed done in wartime. His mind
created the feeling that he was being punished for past actions. His shoulders slumped, and he carried his
head down and thrust forward, which put pressure on his neck and back, so he was sore all the time. The
stress was killing him, but he saw no obvious way out without painting himself as a weakling.
The last time he had been under this much stress was in Vietnam, and his solution to that stress had
almost killed him: he fell in love. His lover was dark, sweet, and from Kentucky. Fifteen minutes with his
lover, and all of Phils problems faded to nothing. He worshipped his lover and believed the love was
returned. Eventually, Phil and his lover, Jim Beam, were together all the time. As the stress of flying and
death increased, Phil got to drinking a fifth a day. He had started drinking in memoriam of the fallen and
because it was expected, but then it was to blow off steam and because he was ashamed that he couldnt
drink as much as the others. But he was going to die trying to prove himself as good as they were.
As the fatigue, lack of sleep, anger, shame, and distress continued to plague him, he began to feel the
urge to fall in love again, and his battle not to repeat the mistake of the past increased the stress even further.
Life wasnt done making things tough for him, however.
A year after the Wells Fargo enema, Bruce Van Alstyne returned to the Menlo Park office with no
explanation other than that a new man was coming from the East Coast. Johnson was too busy sorting out
his life and emotions to inquire further or even care.
The new manager was Perry Hall; actually, Perry E. Hall II. The rumor mill said that one of Halls
relatives had been a founder of Morgan Stanley. Again, Johnson couldnt have cared less. He had the
opportunity to meet Perry a couple of times, and Hall came off as a strange duck. One minute, hed be
trying lamely to join in the rowdy, risqu, and often obscene joking, but it never worked. It wasnt just that
he was the boss; theyd joked with Bruce Van Alstyne a lot. It was that he just didnt seem to fit. Johnson
had made the decision, based on advice from some of the others, to avoid Hall and just work away. The
advice was that gross commissions cover all sins. He did notice that more brokers were leaving, but now it
was some senior guys. Johnson didnt pay a lot of attention, as again he was doing what he thought Beard
had outlined in the Wells Fargo speech.
Toward the end of his time at Dean Witter, Johnson had opened an account for a fellow named Paul
Insel who worked at the Stanford Research Institute in Menlo Park. Insel was a PhD doing research in some
industrial-organization area. Johnson never really figured it out and didnt give a shit. Insel became a client
after only a couple of calls and turned out to be a good one. He had followed Johnson to Morgan Stanley.
His interest focused on time-dependent securities, and this allowed Johnson to learn about a new subject.
To raise money, companies issue new shares or sell bonds, but there are other securities that come from
the black arts of the investment banker. Some are securities with a specific time limit before something
must be doneusually a conversion to another security.
A purchase right was issued to existing stockholders that allowed the purchase of more common stock
at a certain price. The value of the right was determined by the difference between the purchase price stated
in the right and the current market price. Should the common stock rise, the rights took on value, and rights
could be traded. In fact, it was a major part of the investment firms job to purchase the rights from some
investors and sell them to others. To prevent such trading from going on forever and to limit the eventual
conversion cost, rights were only good for a few weeks or perhaps a month. Then they were worthless.
Warrants were similar to rights but had a longer time frame, often years; but in the end, if they werent
converted, they became worthless at a specific date.
This time factor made the dealing and trading in rights and warrants dangerous, and those investors
who purchased them were required to certify that they understood the risk (few retail brokerage customers
did, and even fewer retail brokers). The real reason for the certification was to remove the likely litigation
risk when the investor, under the none-too-general prodding of his broker, decided that that there was no
better place for the money hed inherited from grandma than the 1997 warrants of Consolidated Widget
Company of Secaucus, New Jersey.
It wouldve been one thing if the brokerage houses really tried to determine if the investor understood
the risks and rewards of the strategy, but they didnt. The reason for the lack of concern was that the
documents the clients signed required disputes to be referred to arbitration conducted under the rules
established by the investment industry. The real best thing about arbitration, from the firms standpoint,
was that if the client won compensation, the money came out of the brokers hide and not the firmsso it
was a no-lose deal. Get clients to sign some document that they didnt read and probably wouldnt
understand, and the firm was golden. All the risk had shifted to the client and the broker, both of whom
were expendable.
Insel fancied himself very savvy, and Johnson was more than willing to foster those misconceptions
provided the commissions flowed. It was embarrassing at first, but paychecks trumped ethics. There were
times, however, when his conscience would bother him and he would try to talk to Paul like a Dutch uncle.
The irony of a thirty-year-old with no securities training trying to exude superior knowledge and skill at a
forty-five-year-old with advanced degrees was lost on Johnson.
You know, Paul, these warrants are only going to get valuable if and when the price of the stock
exceeds the warrants exercise price. Were a long way from that happening, and the markets look like
crap.
I understand, Phil, but the company has a lot of new products coming out, and theyll adjust the pricing
of the warrants so that we dont have to worry about the normal pricing.
Paul, thats what you said about X company, and the company didnt, and you lost all the money in
the position. I dont like taking losses like that for you, and you really cant afford to continue to do that
either. If you want to do this type of thing, why not use put and call options? Youd risk less money, but
the effect would be even more leveraged.
And so it would go, and Johnson was finding that he had to do more and more such talks as Pauls
adventures grew more absurd. Insel was playing the same game as the losing gambler. Like gaming,
investment is ultimately not a game of luck. Its a game of probabilities, and Insels ability to judge
probability was declining as fast as his investment performance.
By 1980, Phil was getting tired of Paul. Yes, the commissions were nice, but Paul was placing
increasing demands for research and time on the phone, and this was draining time from other clients. The
wise use of time is the vehicle of success for a broker. Wasted time is wasted opportunity. Johnson stopped
being proactive with Paul, hoping that he would go elsewhere. Johnson wouldve fired him, but there was
a problem. The time for a broker to say no to the client is at the beginning. At the beginning, you needed
no reason not to engage, but later, to disengage, youd have to be able to justify it, or the client might sue.
In 1981, the Colonel suffered a major setback. He was near deaths door for weeks until the doctors got
the situation stabilized. Johnson lived in constant anticipation of having to fly to his fathers deathbed.
While he was dealing with his own psychological issues and his persistent belief in his inadequacy plus
Diannes betrayal, Morgan Stanley ratcheted up the ante. Early in 1981, the payout bands were widened so
that to get the maximum 40 percent payout, a broker had to do $27,000 per month. The stress was enormous,
and in his usual way, he internalized it. He had an enormous ability to accept stress, but it was starting to
affect him physically.
 He was unhappy in his life. If hed taken inventory, it would actually have looked pretty good,
especially compared to where hed been eight years earlier. But he never inventoried and was never happy
with himself. He hated his physical appearance and entered into an exercise program that, for its sheer
ferocity, was frightening. It didnt have the desired effect, but it did produce some undesired ones. His neck
and shoulders hurt almost constantly; the rest of his muscles were sore from the incorrect way he was
working out. He soldiered on with the lie that if it hurts, it works. He was just running in circles, chasing
the chimera of an unattainable ideal. The short answer was that Phil Johnson didnt like himself, and
because he wasnt the perfect example of the successful broker, he drove himself relentlessly but in self-
destructive ways.
While he was killing himself in pursuit of false hopes, Paul Insel began to really get weird. There was
a drug company called Alza. Over the years, Alza had issued several series of warrants. These were Insels
favorite playground. The current series Paul was playing in matured in January 1982, and their conversion
price was about 50 percent above the current stock price. There wasnt a snowballs chance in hell they
would be converted, but the low probability of success seemed to drive Paul on. In the last few months of
1981, Paul began to build a very large position in these warrants, heedless of Johnsons warnings. In
December, he began purchasing on margin.
Margin is using securities to purchase more stock. Normally, if a client has $5,000 of stock in his
account, he can purchase another $5,000 of stock. The problem is that if the stock price drops, the client is
asked to deposit either more securities or cash to pay down the debt. If the client fails to meet the call, the
firm sells out the positions.
Its axiomatic that bad things dont happen at optimal times; they occur when theres the greatest
pressure on the stock markets, when all stocks are falling and when the client is overcommitted everywhere.
In short when theyre least able to pay. So, margin accounts, while very profitable to the firms when things
work out, can cost them a lot if they have to sell the client out and try to recover the loss.
In December of 1981, Alza announced that it was seeking approval for a new use for its glaucoma
treatment and that it would shortly seek approval for a new drug to treat some disease that no one had ever
heard of. Out of such things, the stock market makes hay. All this attention drove Alza up $10 per share
over about five days. With the stock up, the warrants moved also.
Insel was in full cry. With the stock up, he was sure that he was right. It was that uniquely American
fantasy that all you needed was one big score and youd have wealth in excess of avarice. He deposited
some money and then proceeded to purchase more warrants. As the stock moved higher, it gave Insel the
ability to buy more.
Three days before Christmas 1981, Insel placed his largest order ever. Johnson protested that the
purchase was excessive (even a virtual financial idiot like Phil knew that this was a dangerous gamble), but
it was the clients direction, so Johnson placed the order. Dianne had convinced Phil to take a few days off
between Christmas and New Years, and when he returned, Herman told him Paul hadnt met his margin
call as required and the firm had given him an extension of payment, which made settlement after the New
Year.
Johnson was getting a sinking feeling of fear. After the run-up, Alza was trading sideways and down.
This was the first time Paul had been late in payment, so that in itself was unusual, but it was the holidays.
It was completely normal to grant extensions to give the client every chance to pay, but still, something
intangible was pounding on the door of Johnsons active mind, demanding to be let out. As the day of
Insels settlement approached, Johnson called him two or three times a day and got positive assurances, but
the money never arrived. As the days slipped by, New York started calling daily, and Herman was as
nervous as a cat in a dog pound.
Finally, on the day of settlement, a check arrived that subsequently bounced. It was resubmitted and
bounced again, and Insel stopped taking or returning calls. Johnson went to Pauls house, to no avail. He
called Insels bank, who confirmed that Insel had the money in the account. Three days after the last
bounced check, the firm started to sell out the position. When Morgan Stanley entered the market, the
volume was down to only a few thousand warrants a day. The traders had to do the trade quickly before it
got worse, and their selling pushed the price down. Traders can sense when another trader is in trouble, so
they exploited the situation, driving the price down further.
It took six days to sell the fourteen thousand warrants. Every minute was hell for Johnson. There had
to be the accountinghow had this happened, who was at fault, and who would payand he knew it wasnt
going to be pretty. When the tension of the selling was done, Johnson started to get angry. It was a natural
reaction to being made a fool. He was sure that he had been the victim of a fraud and was convinced that
Morgan Stanley would see it the same way. He left that day frustrated, angry, hurt, and disappointed in
himself but comfortable that he was in the right.
When he got home that night, he told Dianne what had happened, and she of course wanted to know if
was going to affect their winter vacation. He hadnt been feeling well; he had pain in his shoulder blades
and some pain in breathing and tingling in his left arm, but he figured it was a combination of stress and
his workout and ignored it. He went to bed early, and as he lay down, he experienced pain in his back.
At about 2:00 a.m., the phone next to Dianne went off with its urgent demand for attention that seemed
to be the angrier since it was in the early morning. Dianne picked it up and mumbled Just a second, and
handed the phone to Phil.
Hello?
Phil, its Mom. Did I wake you up? His mind wondered why people asked stupid questions like that.
She knew it was three hours earlier there.
Yeah, you did, but whats happening?
Your father has had a real setback tonight with his surgical drain and is in the hospital. You know that
the doctors told him that if this didnt work, they couldnt do it again. This may be it. Theres no need for
you to come, but I wanted you to know. Your brother is coming in from Boston. This last was a passive-
aggressive way of saying that if he didnt come, he didnt care as much as Jonathan.
Of course Ill come. Dont worry about anything; I can take care of myself. Just take care of you and
Grandma. Ill call you and tell you when Ill get there.
After he hung up, he told Dianne what was going on and got out of bed to call the airlines and book a
flight. He got lucky and got a flight from San Francisco at 9:00 a.m. that would get him to Philadelphia at
6:00 p.m., and then hed drive the two hours to Lancaster. At six, he called the office to tell them that his
father was dying and gave them his mothers number.
He was coughing more and it really hurt, and between the coughing bouts, he was unable to get his
breath back. It hurt to place his back against the airplane seat. Since Vietnam, he couldnt sleep in a plane.
It made no difference how tired he was or how long the flight, and there was no chance of breaking that
habit on this one.
He got to the house about 9:00 p.m. He was really tired but too wired to sleep. He sat up most of the
night reading books, but the real reason he couldnt sleep was the pain. He wasnt going to bring his troubles
into an already troubled house.
The next morning, they all trooped to the hospital to see the Colonel. He was awake, and theyd just
finished the first of his thrice-daily, four-hour dialysis treatments, so he was in pretty good spirits but nasty
in the way of patients who are in pain and dont want to be in the hospital. He was also very confused. He
kept calling Phil Jonathan and asking him how long his leave was, forgetting that Phil was no longer in
the army.
He called Jonathan by his correct name and had all the other details right, but he seemed unable to
remember anything about his younger son beyond about fifteen years earlier. His energy and spirits declined
fast, and the nurses and doctors hurried them all out of the room. The surgeons were going to try to rework
the surgical drain, and the old man needed to get rest.
The rest of the day was spent talking to Grandma and making her feel she was still part of the family.
Grandma was very self-centered and very jealous when circumstances shifted attention off her. She ran
Jonathan and Phil ragged with her demands all day. It was made more difficult in that both she and the
mother were profoundly hard of hearing, so the voices had to be elevated and words repeated and repeated
all in all dispiriting and tiring.
 They spent the next day at the hospital, waiting for news from the surgeons, which didnt come until
4:00 p.m. It was good news. The drain was reattached and working, so the crisis had passed. The surgeon
explained to Johnsons mother that this time, there was no room for error. This was the last chance to sustain
the Colonels life. If it failed, death by uremic poisoning would follow shortly.
The Colonel slept all night and the next day was awake, but very weak and totally disoriented. They sat
around the hospital or the house between visiting hours. Johnson was really starting to hurteven taking
the smallest breath was sheer pain, and the tingling in his arm was worse, but he was there for his father, so
he ignored it all. He still wasnt getting a full nights sleep, and it was starting to show. His mother noticed
and convinced him to take one of the sleeping pills that had been prescribed for her.
The pill did the tricktoo well. It sank him into a sleep so sound that the next morning, he was awash
in sheets and blankets soaked through with urine. Jonathan hooted with pleasure and rude jokes until Phil
had had enough. The left knifed out like a bullwhip and caught Jonathan on the right side of his nose,
leaving him on his back. For the rest of the day, Jonathan told everyone he wasnt feeling well, but in reality
he was icing the huge black-and-blue mark on his face and cheek. Phil was feeling worse all the time, his
breath short, the pain etching lines in his forehead and causing him to close his eyes to narrow slits as even
the light was painful. It was so bad, his hair seemed to hurt.
They went to the hospital for evening visiting hours, and as he and his mother sat in the waiting room
for the nurses to finish some treatment on the Colonel, his mother asked him if he was OK. He replied that
it was just jet lag. Finally, a nurse came by and stopped, looking at Phil with her head cocked to one side.
Are you OK? You look terrible like youre in pain.
I just asked him the same thing, interjected his mother.
Im fine, was Phils response. Just tired and jet-lagged.
I know jet lag when I see it. Youre not breathing right, too shallow, and youre favoring your right
side. Then, getting brisk, she said, Come with me, in a tone that allowed for no resistance.
They walked to the nurses station, where she stuffed a thermometer in his mouth and took his pulse.
Then she listened to his heart and shook her head. Go sit down, she ordered, again with the authoritarian
voice that nurses must learn in schoolthey all had the same tone and cadence.
The nurse, meantime, had made a phone call, and a few minutes later, an orderly showed up with a
gurney. Were going to take your son down for a chest x-ray. I think he has pneumonia. Certainly, his
lungs are full of fluid.
Not only did he have pneumonia, but pleurisy. Hed had pneumonia in the hospital in Texas, but he
didnt remember it being this painful. Pleurisy, an infection of the covering of the lungs, was new to him.
It meant that every breath was like having a belt sander with eighty-grit paper working on the lungs. While
breathing merely hurt, coughing was excruciating. They gave him a buttload of antibiotic, some pills to
take over the next two weeks, and some codeine cough medicine. He was so dopey he could barely walk,
but he did sleep, finally.
The Colonel rallied strongly and within three days was his usual terror. The hospital wanted to discharge
him. It was said that the staff was taking up a legal defense fund for the person who pulled his plug. Finally,
they took him home. He was his old self: he refused to use the wheelchair and almost passed out on the
way out; he refused any help into the car and in fact wanted to drive, and refused help getting into the house.
Phil was exhausted putting up with him. Grandma was in full cry when everyone got home, because shed
been left with a caregiver whose major crime, in Grandmas view, was that she was a nigger from down
South.
His mother told him and Jonathan that there was no reason for them to stay any longer and booked them
both flights that day.
The next day, being the good soldier he was, he got up and went to the office as usual. He got there
early, expecting and perhaps hoping for a lot of catch-up work to do. He always thought it was cool when
guys returned from trips and spent the next day catching up on all the phone calls and letters. He had few
of either, and it was a bit disappointing.
Herman came in that afternoon and wanted to talk about Insel. The firm had tried to contact him at
home and work, to no avail. The firm had decided that Insel wasnt going to pay and that Johnson was to
bear the loss. The only question, according to Herman, was it would be charged against his gross or net
commissions. Gross was better, since the firm normally took 60 percent of every commission dollar. Net
was really bad, because out of the 40 percent the broker retained, the charge came after taxes had been
deducted, so it was a real monetary loss.
So, whats the loss? Johnson asked Herman.
Theyre still working on it, but it looks like a range of eighteen to twenty-two thousand. Bruce has
been on the phone with San Francisco and New York going to bat for you to take it gross, but that will be
up to Perry Hall.
Id hope the firm would sue Insel. This was obviously a fraud, and I have detailed documentation on
what we did to get the money.
That should help, was Hermans parting shot.
Deep inside his belly, down below the belt and to the left of the penis, a slow, full feeling began to
develop. First it felt like he had to pee, but he tried and nothing came. The feeling continued to spread
across the abdomen to the right and up toward the navel. He began to burp and felt as if he would vomit.
The pain began to move aroundfirst down in the pubic region, then up and left, then to the right and back
to the left, and so on. His stomach began to gurgle. Then the cramps began.
He was talking to one of his clients when the first wave hit and nearly doubled him over in pain. He
thought his intestines where ripping open, and he struggled not to let the pain show in his voice. He finished
the conversation just as the second set started. These were far more intense. He grabbed his stomach and
ran for the mens room. He barely made it before he emptied his bowels in a gas-driven rush that splashed
water up onto his rear end. The cramps passed with the first gush of shit, but they were followed by two
lesser series that had the same result. In the end, pale, exhausted, sweaty, and sick, he staggered from the
stall, barely able to walk. He splashed cold water on his face and washed his hands to attempt to recover
before he went back to work.
He walked back to his office, and one of the sales assistants told him that Bruce was looking for him.
So, feeling almost human again, he went to Bruces office.
Hows your dad?
Not too good. Hes going to die from this thing; the question is when. Hes a miserable patient, but
hes one tough bastard and keeps coming back.
Thats great. I know that Herman mentioned to you that theres a large loss in Insels account. Ive
been on the phone most of the day with Perry Hall and Anson Beard about what were going to do. Anson
has passed this to Perry, and Perry wants to see you in his office tomorrow afternoon at five oclock.
Do you or Joe Eldridge want my documentation on what we did to cover this thing? I think the firm
should sue him. It was obviously fraud. Eldridge was the legal and compliance officer in San Francisco.
Again, all of that is Perrys decision after he talks to you. Anson wanted you to take it net and all in
one month, but Perry says he needs to talk to you first and then hell decide. Id take whatever you have
with you.
OK, was all he could say as he left Bruces office and made a beeline for the john again.
The next day, he couldnt concentrate. First, his bowels were liquid, and finally he went to the drug
store nearby and got an antidiarrheal. He hated them, but he needed not to have to run off to the john every
second, and this was the only answer. It seemed to him that everyone knew more about this than he did.
Every time someone walked past his office, he imagined the guy was giving him a funny look.
It wasnt a look of compassion or of understanding. In his mind, it was a look saying, Go ahead and
work, you poor dumb bastard. Its your last day here. By 3:00 p.m., he was sure that he wasnt imagining
the looks. All these guys knew what was going on, and he was the only one left out. He was the goat. They
all are waiting for me to get fired so they can feast on my accounts. Sons of bitches. Even the pill wasnt
working.
Shortly after three, he left the office for San Francisco. It was only about forty miles, but he didnt want
to be late. As he left, a few of the guys wished him luck, and Davis told him to kick some ass. He felt better
with those wishes ringing in his ears.
 Morgan Stanley had taken office space in a building on the south side of Market Street, at the corner of
Market and Second. It wasnt the most prestigious space in town, and the building was oddly shaped like a
diamond. It was mostly occupied by Rand McNally, who had a store on the first floor. He had some time
to kill, and since he knew almost no one in the San Francisco office, he browsed around the store and then
took a short walk to calm himself down. It was dark outside, and the city was in full homeward rush. The
darkness didnt lighten his mood, and the crowded streets filled with rushing people made him feel more
isolated and alone.
His pneumonia was largely cured. He had a few more days of antibiotics, but the pleurisy was still in
full force and his chest hurt both from anxiety and inflammation. Finally at 4:30 p.m., he took the elevator
to the nineteenth floor. He was following the advice to get there early. He told the receptionist who he was
and what he was there for, and then, too nervous to sit down, paced nervously after visiting the mens room.
The appointed hour came and passed, and still he hadnt been summoned. People were leaving and the
place was largely empty, all of them, in Johnsons mind, looking at him with the same funny look as the
guys in Menlo Park. The receptionist left and the janitors arrived. His watch said 5:30 p.m.but no
summons. He finally walked partway into the office and saw that Hall was alone at his desk behind closed
doors. Taking things into his own hands, he walked up to Perrys door and knocked. Hall said, Come in.
Perry, Im Phil Johnson from Menlo Park, and we had an appointment at five to talk about the Insel
matter.
I know who you are and what youre here for. Ive heard little except your name for two weeks. Ill
get to it when Im ready. Sit down someplace.
OK, thought Phil, this is not going well. Hes really pissed, and I apparently upset him by walking up
to him. Oh, boy, this is not good. His colon gave a heave and cramped briefly. He burped, as he often did
when IBS was active. He sat for another half hour and was just about to leave and just say fuck it when
Hall looked up and waved airily for him to come in.
There was no handshake, no welcome, no hello, no courtesy of any type. Hall sat behind his desk with
his arms folded across his chest and a look of hostility on his face. Hall had thick and somewhat greasy
black hair parted on the right, and it moved in waves across his head. It was perfectly cut, and not a hair
was misplaced.
His eyes focused on Phil, and they were the most frightening things hed seen in a long time. Perrys
eyes were black. The iris was black and the pupil was black. There were black eyelashes and brows. The
effect was two obsidian pools where light went in but none showed out. If the eyes were the windows to
the soul, then Perrys soul was black and dark. Youve made a fucking mess of things, you know that?
Well, I know theres a large error, but we were defrauded, was Johnsons reply.
That makes no difference. Youre supposed to make sure were not defrauded. I dont give a shit what
happened. Your job is to bring in quality customers, the kind of customers Morgan Stanley wants, not a
bunch of crooks. This happened because youre a lousy broker.
I dont think thats called for, Perry. Everyone in this business has errors.
Not at Morgan Stanley! Perry shouted, slamming his fist on the desk. Morgan Stanley people dont
make errors, and if they do, they arent here very long. This is the largest error in the firms history, and its
really a black eye for the firm.
Johnson knew that Hall was lying about the errors. Hed talked to the margin folks who told him that
errors occurred every day in both the retail and institutional areas. It was simply impossible to prevent an
error. One slip in attention or a distraction at the right time, and there it was. Most were a few hundred or a
thousand, but they were there. The only way a brokerage firm could operate without errors was when it was
closed. He thought about telling Hall that, but in an uncharacteristic burst of rectitude, he refrained. But
now he knew something newHall would lie.
Since weve been here, Hall continued, weve been overrun with brokers who want to work for us.
Im only allowed so many brokers in the two offices, and Ive been looking over the records of the existing
brokers and comparing them to the people Im interviewing. I look at your record, and I have to tell you
that of the twelve people Im interviewing, Id rank you at sixteenth. You frankly arent a good broker, and
this error is further evidence.
 Hall let that sink in, staring at and through Johnson with those dead-pool eyes. Johnson squirmed in his
seat a bit, not from fear but because he was in pain from stomach cramps and the pleurisy. He said nothing
but reached into his briefcase for the file on the Insel matter. He pulled it out and put it on Perrys desk.
In a voice betraying his anger, he said, Those are the records I kept on this error. If you read them,
youll see that I did everything I could to collect and there was no history to suggest he wouldnt pay. I say
again this was fraud.
Hall picked up the folder as if it was infected and dropped it into the trash. I dont care what records
you have. This is your fault. Johnson nodded, not so much in agreement but in acceptance that his argument
of fraud wasnt going to work. When I looked at your records and talked to people about you, Dead Eyes
continued, I realized that youre not right for this business. When I first heard about this, I was going to
fire you, but Bruce Van Alstyne convinced me to talk to you first. Im good at sizing up people. Ive fired
twelve in the past, and everyone is better off because I fired them. Your problem is that you dont handle
stress well. You crack under stress and make mistakes.
The cramps and pain made the fuse shorter this time. Not handle stress? What the hell do you know
about stress! I was shot down six times in three months, once behind enemy lines, and had to walk for five
days to safety. I was wounded and spent eighteen months in a hospital, drugged into sleep, not knowing if
Id have a dick when I woke up. I had malaria, hepatitis. Im the only one of my unit still alive! I just came
back from whats likely to be my last visit to my father, and I have pneumonia and pleurisy. Every time I
breathe, it feels like someone is rubbing my lungs with sandpaper. You dont know shit about stress!
Johnson was really wound up and he could see that Hall was suddenly uncertain of himself. He withdrew
his body, folded his arms, and turned sideways in his chair. But the eyes never showed even a flicker of
emotion. Hall leaned forward to speak, and Johnson interrupted him before he could talk. Who did you
talk to that said I couldnt handle stress?
I dont think it would be productive for names to be mentioned. Numerous sources told me that.
Johnson had just seen one of the most maddening aspects of Morgan Stanley. There was never
accountability of who said what, especially if it was negative information. Such accountability wasnt
productive. Johnson would learn later that the phrase meant there was no such information; it was just an
Ivy League way of lying.
If youre going to stay at the firm, heres the way it will happen. Youll take the Insel error net over
three months. Youll move here to San Francisco so I can supervise you, and if you ever make another
error, youll be firednot allowed to resign; you will be fired. And if that happens, youll never work in
this industry again. This is not negotiable. You will be in this office on Monday.
Fine, Johnson said with the defiance of one who had to prove himself worthy but with no idea of the
horrors he would face in the attempt.
He had to stop in the mens room on the way out, and when he reached his car, he found the window
in the back door had been broken out and his radio stolen. Feeling fucked over in a lot of ways, with his
anger cooling and the fear of what hed committed himself to rising, he drove off into the dark.
 Chapter 22
A New Hope and Once More Up the Ass
Rationalization is a powerful human characteristic. It can help a person from being driven insane, and it
can lift him up when all else tells him to stay down. It was partly responsible for his survival in Vietnam:
he had rationalized that he wasnt supposed to die.
All the lonely and dark way down the Peninsula to Los Altos, he engaged in the most useless of all
mental exercises: rehashing the conversation. What should he have said, he should have said this or that.
The moment was gone, and what he should have done was of no importance. Only the present and what
one does in the future counts.
The next day, he filed a police and insurance report on the car and began to pack up his belongings for
the move. Everyone avoided him like he had suddenly had developed leprosy, and in a way, he had. Only
one of the guys whom Johnson considered a real doofus seemed interested in talking. Johnson kept the door
closed while making calls to his clients.
He wasnt going to tell them that hed almost been fired; he resorted to the old Wall Street tradition,
the white lie. He told people that hed been asked to move to the San Francisco office so he could supervise
the restricted-stock operations on the West Coast. He found some solace in that statement, since the head
of the department had told him that it would be easier to coordinate between the two of them if Johnson
was in San Francisco. He of course called it Frisco, which marked him as an outsider. Johnson, of course,
marked himself as a fool since hed believed the line.
On Friday before he left Menlo Park, he got a call from Steve Rudolph, one of the brokers in the old
Dean Witter office. After the usual bullshit, Rudolph told him that he had inherited Paul Insels account but
had never called him out of respect for Johnson. Well, about six months ago, he started calling, saying he
wanted to do business. I asked him for a deposit, and I got the money. He started out doing some syndicate
business. Then in November, he started to buy Alza warrants, Rudolph narrated.
Oh, good God, no! said Johnson.
Well, then right around Christmas, he buys a bunch of them on margin and then doesnt pay. Gives
me a long story about changing bank accounts and that the money will be there. Well, it ended badly. Money
never came in, and we sold him out. Huge loss. Everyone was selling the warrants at the same time, we had
a fifteen thousand dollar loss.
Oh, Jesus, Im sorry, Rudy. He did the same to me, only I have a twenty-two-thousand-dollar loss,
and I have to take in net over the next three months!
Fuck! Doesnt your manager know this asshole did this to about nine firms? Your manager must be a
real prick. Dean Witter, Merrill, Paine Webber, Bache, Hornblower, and a few others are starting a lawsuit
for fraud. I dont have to take any of the loss until the suit is finished. You should talk to your boss about
joining. This shitbag has a lot of assets.
He took down the name of the law firm representing the brokerage firms and ended the call. So that
asshole Insel had done it across all the firms in the area! Ill bet that Perry doesnt even know about this,
and when I tell him, he might let me stay in Menlo Park. The rays of hope warmed him.
He took the information to Herman, and Herman told him to call Perry.
When he finally got Perry on the line, he gushed out his story. Given his previous meeting with Perry,
though, he should not have been surprised at the response. So? was all Perry said.
Well, I told you wed been defrauded. Heres proof and a chance to get the money back.
I dont care what other firms do. Morgan Stanley is not joining a lawsuit. It will take years to get any
money, and youre responsible for the loss, and youre going to pay for it. If you dont like the terms, you
can quit. Then he hung up.
All that weekend, he rationalized that moving to the San Francisco office was a step upward, ignoring
the fact that it was really a punishment and an incentive to get him to quit. After all, if he quit, they could
only take his last paycheck against the error, and hed essentially walk on most of the loss.
 After the problem with Malte at Dean Witter, hed kept a copy of his account books at home (which
was technically illegal) and made copies of prospect sheets and new accounts he opened. He was doing in
the mid-200K region in gross and would be attractive to most of the other firms in the area.
For a rational person, it was the easy choice. Walk away from an unjust debt, stay in an office close to
home, fuck over Perry Hall (for whom he was developing a blind hate) and relieve himself of having to
prove himself to the jerk. All he had to do was call one of the managers at a Dean Witter office or Kidder
Peabody or Merrill, and they would take care of the paperwork and he could be working at the new firm in
a week. It was the rational decision. But because he was a powerful rationalizer, more powerful than most,
it wasnt the decision he made.
He convinced himself that his duty was to the firm and that his moral honor demanded he do his duty,
and if that inconvenienced him and his family, that was his problem. It was duty and honor that were
important, and duty trumped all, so his duty had to be done. That was what the honorable men hed known
and respected, both living and in history, wouldve done, and hed do it also. Hed join that list of legends
and suffer injustice in the name of duty.
But he was wrong; duty didnt trump all, all the time. There is a fine line between duty in an honorable
cause and duty that accepts and validates injustice. To do duty in the service of injustice is to affirm the
injustice and allow the person who committed it to walk away free of sin. Morals mean responsibility for
our own actions, and if were unjust to another, it should, in an ideal world, be a blot on our souls. When
the person to whom the injustice was done accepts it, he or she allows the moral crime to transfer to him or
herself. In some cases, its an actual legal crime as well.
The trip to San Francisco Monday morning was a nightmare. It was about forty miles up the Bayshore
Freeway through Menlo Park, Redwood City, San Carlos, and the other towns. At each, others heading for
the city emptied into the freeway like blood from capillaries into an artery. By the time he passed San
Francisco Airport the road was four lanes of solid traffic moving at sixty miles an hour, occasionally
speeding up and slowing down in the rhythm of a heart beating.
He was determined to be in the office at his usual time, 6:00 a.m., so he left Los Altos at 5:15 a.m., and
he needed every minute. He was still without the rear window or his radio, so there was no entertainment,
and the flapping of the plastic covering the window was distracting. The car was cold despite the heater
working hard. He parked his car, but before leaving, he took out a legal pad and with a black marker wrote,
No radiostolen last week! and stuck the sheet on the front windshield.
South of Market was the home of all the flotsam and jetsam of San Francisco. The walk up Second saw
drunks passed out in doorways, beggars looking for a handout, black guys looking like they were out to do
no good, and a number of folks who had to be mentally ill. The streets were strewn with blowing newspaper
and trash; the stone stairs of the Pacific Tel building on the corner were stained with something he could
only imagine. As he crossed Mission, a weaving, dirty black man was rummaging through the trash
containers and asked in a voice slurred by something, Help a guy out? Johnson ducked his head and
moved on.
He came through the door to a security desk that barred entry to the elevators. The bleary-eyed guard
asked him where was going. When he said Morgan Stanley, the guard checked his list and pronounced that
Johnson didnt exist. Actually, he told Johnson that he wasnt on the list of employees, so unless he knew
someone who could vouch for him, he couldnt go up until 8:00 a.m.
Johnson only knew the people in San Francisco by name, and the only person hed ever spent time with
was Perry. In his best yes-Im-confused-and-a-total-fool-but-Im-gutting-this-out voice, he almost
commanded the guard to call Perry Hall. It happened grudgingly, and Hall didnt answer. Sorry, pal, hes
not in. Youre going to have to wait. Go get some breakfast.
OK. Is there someplace I can leave this box and my briefcase until I get back? Johnsons arm was
killing him from having his shoulder extended at a right angle over the box for all this time, and he shifted
the box with a heave and lift of his arm.
No, you cant leave it here. I dont want the liability.
So, shouldering the box, he stepped out into the world of the denizens of the dark. A couple of blocks
up Market Street was the Palace Hotel where President Harding had died. He decided it was as good a place
as any to find breakfast. The main eating place in the hotel was the Garden Court. The two-story room was
spanned by lacework iron, arched beams, with sides and roof made of white frosted glass. It was decorated
in the mode of a garden, with palms and other plants along the sides. He approached the host and asked to
be seated. The room was virtually empty, but the fussy host went through all the usual questions. Do you
have a reservation?
No. I didnt think Id be having breakfast here.
I see. Are you a guest of the hotel?
No. I work at Morgan Stanley down the street, and I have to wait to get up to the office. Why he was
volunteering information to this ass was beyond him.
Well, I see, said the man with a sniff of disapproval. It might be possible for me to find you a table.
How many in your party?
One.
Another sign of disapproval, this time a sigh. Just a moment, please, as he took a call, leaving Johnson
standing with his box arm starting to cramp and getting more and more pissed.
After a minute or two, the host signaled for a waiter, who escorted Johnson to a table hidden behind a
potted palm and close to the service doors. The food, when it arrived, was good, and he enjoyed the fact
that the waiter had brought him a Wall Street Journal. The bill was another matter. Two scrambled eggs,
bacon, toast, orange juice and coffee$35!
When he got back to the office building, the guard who had blocked the elevators was gone, so Johnson
walked to the elevator bank and waited for an up car. The other people waiting for the elevators stood
silently, not making eye contact and seemingly unaware of any presence but their own. Finally, the door
opened and he worked his way out with his aching arm. There was no one at the reception desk, so he
turned right through a set of double metal doors.
Immediately to his left were two long desks with a center divider, and on each side sat people facing
each other. The two were separated by an aisle. Hed later learn that the first was the institutional bond desk
and the other the equity desk. On one side were the salesmen and the other the traders. Theyd been there
for some time. Their jackets were off, ties loosened, and shirts rumpled, some even stained with sweat. The
place looked like a mess, with boxes of takeout food, newspapers, and other junk. Johnson dropped his stuff
on one of the unoccupied desks and sat down to wait.
He amused himself by looking up quotes on the quote machine and reading the Wall Street Journal. He
listened with one ear to the shouts of the institutional people and the blaring of the hoot-and-holler speakers.
A few other people wandered in, looking at him but making no move to introduce themselves. He began to
chafe in the inaction. He was used to walking into the office and going to work, and here he was, sitting
idle with the market open. Finally, Perry arrived.
Perry walked in past the institutional guys, who barely acknowledged his presence. He had the kind of
smile a crocodile has just before it eats you: totally insincere and phony. He said hello to one of the brokers
who was there and then saw Johnson. His walking rhythm was disturbed and his smile faded, but just for a
second. Like all smiles for effect, it was quickly replaced like it was a badge. Johnson stood up.
Hello, Perry.
Phil. What are you doing here?
You told me last week that due to the error, I was to start working here on Monday. So, here I am.
Where do you want me to sit?
Perry was clearly confused by Johnson being there, but he recovered and the hard look returned. OK,
well have to wait until Kathy Tealdi gets here to get you settled. But put your stuff over there. He waved
his hand and arm in the general direction of the desks on the far side of the office, which seemed to be
mostly unoccupied. Once more he hefted the box and walked to an empty desk. He sat down to wait.
Perry went into his office and immediately got on the phone. Johnson overhead just enough to know
he was talking to Herman. Perry closed the door, and Johnson returned to idle amusement. Hed been doing
nothing for another forty minutes except call a few clients to exchange idle chat when an odd-looking man
walked over. He was mostly bald, and his skull had a ridge down the middle. His ears stuck out and up. He
had a hangdog look of extensive tiredness and the stooped walk of someone who spends long hours bent
over a desk. He was Joe Eldridge, the office compliance officer.
Joe had been with Shuman Agnew for a long time. Compliance officers are a necessary evil in the
brokerage business. While many rail at the seemingly unfettered financial markets, they are in reality some
of the most heavily regulated in the nation. The excesses and disasters of the 1920s led to the formation of
a federal regulator, the Securities and Exchange Commission, whose first head was one of the most ruthless
of the Wall Street speculators of the roaring 20sJoseph Kennedy, father of JFK. The various states also
enacted regulations for the protection of their citizens. Since states cant impose their laws on the federal
government, their regulations were often more stringent than those laid down by the SEC.
In addition to the federal and state rules, the firms had procedures. All of this required someone to keep
track of them, and since it was too expensive to always refer questions to lawyers, the firms employed
nonlawyer compliance officers. If an accountant is a person who failed the personality test to be a lawyer,
a compliance officer is the second runner-up in that contest. These guys were colorless, humorless, usually
unsmiling, fussy, detail oriented, and anal to the extreme. In Johnsons mind, those who became compliance
officers had had really bad childhoods and had probably been beaten up by everyone they knew.
Joe was one of those, and no one liked him or was ever comfortable when he was around. He was like
the guy who farts at a fancy dinner partynoticeable, but no one would go out of their way to talk to him.
When the first of the James Bond movies came out, Joe had a new nickname: Dr. No. When Joe wanted to
see you, there was trouble of some sort. He was never one of the guys. Hi, Im Joe Eldridge. Im the
compliance officer, and we have some paperwork to do to get the transfer done. Is this where youll be
sitting?
I dont know, Joe. Perry said I had to wait for the operations manager to find out.
Ill have my assistant, Kate, bring you the papers. Its not too bad since youre just moving between
offices. Theres no problem that I should know about, is there?
Johnson didnt know what Joe knew, and given Perrys confusion by his being there, he wondered if
Perry had told Joe about the error. He decided to go totally honest. I had a big error right at the end of the
year, and Perry said I had to move to this office.
Joe took his glasses off and stuck one of the temples in his mouth. He stared at Johnson for a few
seconds and then said, Ill talk to Perry about this and see what we need to do. Then he walked off.
Kathy Tealdi arrived, and Perry interrupted his stream of phone calls. They talked, looking at Johnson
occasionally, and Perry waving his arm in Johnsons general direction. Kathy took him to a desk with his
back to the windows. The desk had fewer drawers than his previous one, and he had more stuff than room.
He positioned the Quotron and phone to his needs and then waited.
Finally, a plump, kinky-haired woman came over and identified herself as Kate, Joes assistant. She
gave him some forms and explained to him what they were, and Johnson signed them in his terrible
handwriting. Am I cleared to do business? He asked.
You always have been. All we needed was to give you a different rep number so your commissions
will credit. Eventually, well change all your accounts to one of our office numbers, but thats done by Ed
Steinforth.
He didnt know any of the guys in the office. Well, he knew names and had seen them at the high-
enema meeting. In the last years of Shuman Agnews independence, the firm had tried to grow by hiring
some younger brokers, but it had for most of its life been an elephants graveyard of older brokers who had
plateaued in production and wanted to get a higher payout of their commissions.
As people arrived, several came over to introduce themselves, as did a number of the sales assistants.
Several people came by and dropped copies of wires and other communications on his desk, which he
discovered was research and other comments from New York. The office got busier and nosier through the
day. The institutional guys were really noisy, and the open plan of the office increased the noise level which
was validating the Morgan concept of a noisy office was a productive office.
The days were the same, and the travel back and forth was a pain. He started to think that if he was
going to keep this up, he might have to move closer to the city. The drive home was agonizing, taking
ninety minutes or more of nerve-wracking traffic moving bumper to bumper at sixty to seventy miles per
hour in pitch darkness. Hed arrive home wired up and pissed off at the traffic and already anticipating the
terrible drive in the morning.
One day, he was sitting in at his desk, updating client positions in his books, when he overheard one of
the other brokers talking to one of the sales assistants. The broker was standing in the door of the coffee
room, cleaning his cup, and responded to the girls statement that the coffee was awful strong with the
comment, It reminds me of the stuff that the first sergeant in my unit in Vietnam made. I always suspected
it was used oil from the motor pool.
The speaker was Joe De Santi, and he sat on the other side of Perrys office at the back of one of the
pods. He was about Johnsons five foot ten and had broad shoulders, thick, black hair, and a full beard. His
white shirt was tight over a deep chest and showed strain from his upper arms. His lower arms, exposed by
the rolled sleeves, were covered in black hair. As he moved off, he had the cocky walk of a guy who knew
he could kick the ass of anyone he encountered.
Johnson had heard stories about this guy. He was supposed to be a mad prospector and account opener,
and frequently, when Johnson was on the track of a seller of restricted stock, hed find that De Santi had
already called. When he had been in Menlo Park, he had started to hate the guy; now he was intrigued. A
few days later, he was in the coffee room himself, and De Santi walked in. Joe, Im Phil Johnson. I just
got here from the Menlo Park office. I heard you say the other day you served in Vietnam. So did I. They
shook hands.
Good to meet you, Phil. I did two toursone with the Eighty-Second and the other with the Cav. Who
were you with?
The belching buzzard up in I Corps. What years were you there?
First tour 1968, and the second a year later. Got wounded the second tour.
I got it halfway through mine in 1972.
You West Point? asked De Santi.
No, OCS, Fort Sill. How about you?
Oh, a cannon cocker. I was at VMI, was De Santis reply, using the abbreviation for Virginia Military
Institute. My dad was a career officer, so it was in the blood.
Mine too. So I guess were both kind of a minority around here. Youre the only one I can find who
served in Vietnam.
Were the black sheep around here, De Santi replied. Theres one more guy on the bond desk, but
the other guys who were in the service were all navy or stateside.
At this point, Johnsons assistant signaled him that he had a phone call. Men tend to form close
relationships with few other men, and many of the relations they do form are more acquaintances than
friendships, as men view all other men as competitors. There are two associations between men that are
always close. One is if theyre gay, and the other is when theyre brothers in arms. Once you knew that
another man had been in combat, there was a vetting dance that went on with subtle signals passed that
indicated to another combat veteran that you had actually been there. It was nothing you could see, and if
someone didnt pass the test, little was said openly, but the level of trust would never have been there.
De Santi had passed the first phase of Johnsons smell test with his appropriate use of the military idiom
and his general attitude. If he let the truth out, he was so lonely and isolated that hed have passed De Santi
even if the test hadnt turned up a positive. Over the next few weeks, he and De Santi exchanged a few
more stories and comments that cemented for both the fact that they were each what they said they were.
He suspected that De Santi had made some calls, as Johnson also had to confirm details with the informal
network of old army buddies.
The sniffing being done, they began to talk more and more and occasionally go out to lunch. He found
De Santi querulous; argumentative; very, very authoritarian; and full of facts that he wouldnt allow to be
questioned. He also found him to be refreshingly, almost shockingly frank and plainspoken. Hed
determined early on that De Santi despised Hall almost as much as Johnson did.
You know that hump Hall? De Santi said one day over lunch at the House of Shields, a legendary
hangout near the Palace. While we were over getting our asses shot off, he was the OIC of the army hockey
team at Fort Bliss. A hump was a person so worthless that one wouldnt bother to shoot as one would any
other vermin. Perry had earned that description by being the officer-in-command of an army sports team.
Johnson wasnt aware there was a hockey team, and it seemed unlikely that it wouldve been at Fort Bliss,
which is in the desert in El Paso, Texas.
He wasnt going to argue. It gave him another reason to hate Hallas if he needed one. He discovered
that De Santi was one of the most talented people hed ever met. He spoke fluent German, Italian, and
French, could draw as well as most cartoonists, had a sailboat, and had read seemingly everything in the
world. He was single and a devastating ladies man and was always going out with a different woman. Of
course, being a ladies man in San Francisco where more than a third of the male population was gay was
easier than in other places. He learned that De Santi had two masters degrees, one from Georgetown and
an MBA from Stanford.
Over the months, he and De Santi formed one of those bonds that rise out of necessity and feelings of
being the underdog. While De Santi was a prospecting machine, he didnt convert many of them to actual
accounts, so his production wasnt rising like Hall wanted. That, and De Santis outspoken nature and
unwillingness to accept the lack of moral precision of the business made him even more of a target.
Hall had kept a good number of the Shuman brokers, but it was obvious that Morgan had other plans,
and people started to arrive. Most were brokers from other firms who had shown good numbers. Johnson
wondered what Hall was offering them, since the payout at Morgan was lower than at the other firms for
the same commission levels, and Hall was nothing to write home about as a boss. Some of the new brokers
were young, but they all had one thing in common: they were arrogant bastards.
As more and more of them arrived, Johnson, De Santi, and others found themselves being marginalized.
It seemed that these guys hit the floor running and that accounts were flowing to them but not to the older
guys. It came home to him one day.
For some time, Johnson had been prospecting a venture-capital firm in the Silicon Valley. This firm
had had a number of their portfolio companies go public, and the limited partners and the fund itself had
sold lots of restricted stock. It was a potentially huge account, not only because of the limited partners and
the fund but also the management of the companies. Johnson had been developing a relationship with one
of the senior partners and was starting to have some anticipatory joy that he might get the account.
One day, he went down to Menlo Park to see his contact. Usually, they met in the partners office with
a few other senior staff. Today, he was directed to the conference room. In the room were a bunch of the
senior and junior partners, and he was alone, facing the group. After introductions were over, they chatted
for a bit, and Johnsons contact said, Phil, Im glad that you could come down so we can talk about the
relationship between Inland Venture and Morgan Stanley.
Thanks, Dave, Johnson replied, Im hoping that we can do business together. I think it will be to the
benefit of both firms.
We agree with you, but there are some things we need to clear up before we start working together.
OK, what can I clear up? Johnson asked, feeling the excitement rising to the point that he felt like he
was going to pee his pants. If this worked, hed be doing about $100,000 per month, with the prospect of
doing a lot more. He had every right to be excited.
Well, the first thing is, who will be covering our account? Dave asked, continuing, While youve
been working with us for a considerable time and giving us a lot of information on Morgans restricted
stock capacity and market making, we were recently approached by Greg Vashon and David Hellman of
your office, who stated that theyd been assigned to cover our accountand were frankly confused.
Johnsons excitement and joy were crushed in a second. He started to sweat under his arms, and his
throat was tight and dry. His mouth started to suck inward, and his eyes went out of focus. His breath started
to come quicker and shallower. He had to say something, and his mind whirled to figure out what to say. It
seemed like minutes passed, but he knew that it was only seconds. Well, Greg and David work in the same
office and are part of our restricted-stock team. Im sure they just called on you not knowing that I was
working with you. Even as it came out, he knew he hadnt drawn the ace he needed to fill his hand.
We know they work in San Francisco and that the manager there is a Mr. Hall. Morgan Stanley
underwrote one of our portfolio companies, and the partner was Joe Hills. Messrs. Hill and Hall called and
informed us that if were going to do business with Morgan, we should do business with Vashon and
Hellman.
Johnson was pissed, and his anger was rising faster and faster. He didnt know how long he could sit
there without exploding. Im sorry for the confusion. I guess they didnt tell me of that conversation.
Theyre all good people, and I know theyll do a great job for you. If theres anything I can ever do, please
dont hesitate to call. He stood up with as much dignity he could muster and walked out of the room and
the building. He slammed the door of the building open and then slammed his fist on his car until it bled.
Finally, he got in his car and sat for a few minutes, deciding what to do. Should he go to the office and
confront Hall? Should he just forget it and go home? Should he quit? He was so mad that he wanted to kill
someone, and the anger was still getting worse. He needed to release, and he finally reached the wrong
decision. He started the car and headed for the office.
He arrived there about thirty minutes later, and his anger was still in full force. He stormed onto the
elevator and then into the office. The look on his face was positively terrifying, and everyone who saw it
was obviously scared. As he passed the bond desk, one of the guys was dialing his phone, and in his short
walk toward Halls office, De Santi and John Hulka, the bond trader who had served in Vietnam, appeared
from nowhere and grabbed him. Hulka looked like his last name. De Santi put a hand on Johnsons chest.
Phil, stop. This is not going to do you any good.
Johnsons right hand swung up from his hip and to the left of De Santis arm. In a rotating motion, he
threw off the restraining hand. At this point, two enormous arms encircled him and lifted him off his feet
with ease. Johnson struggled to get away and tried to slam his head back into Hulkas, but John avoided it
and carried Johnson to the mens room. He was screaming and cursing the whole time. Let me go, you
gorilla! Ill kick the shit out of you, you son of a bitch!
Hulka put him down and Johnson whirled his fist up to hit Hulka, but Hulka acted first with a palm
strike to the sternum. The pressure of 265 pounds amplified by a twenty-two-inch biceps hit Johnson like a
hammer and drove the breath out of his lungs. He fell to the floor, gasping like a fish out of water. The door
opened, and one of the other brokers tried to come in. Use the other restroom! bellowed Hulka, and the
other broker, ashen faced, left in a hurry.
Phil was still gasping, but he was starting to get up. As he did, Hulka pushed him back down, saying,
Sit down, asshole! You try to get up again, and Ill break your legs.
Johnson was killing mad, his face was red, and the surefire indicator of his total anger showed up: his
ears were cherry red. He was so unfocused in anger that he didnt know if he was madder at Hall for
humiliating him or these two jerks for stopping him from improving the world by killing Hall. De Santi had
his back to the door to stop Johnson from escaping or someone else getting in.
To anyone outside, it must have sounded like a bunch of cats were locked in a tin can. Noises came
from there of screaming, punching, and glass breaking as one of Johnsons punches missed and hit the
mirror. There were over five hundred pounds of male flesh banging off walls and kicking things. There was
cursing in various languages, and once, there was that sound of ripe melon being hit by a bat. Johnson was
clearly outclassed by the other two, who had been Special Forces in the army and trained in hand-to-hand
combat. Johnsons hand-to-hand skills had developed at the officers club, drinking beer.
It was over in about fifteen minutes. Its really hard to stay mad when youre expending huge energy
fighting. When it was over, Johnson sat on the floor exhausted, his knuckles bleeding and his sternum
aching from Hulkas blow, his shirt and tie spotted with blood. De Santi was sporting a mouse bruise on
his cheek from a well-placed left hand; Hulka stood there untouched but with his giant chest heaving at the
effort. Then they all started to laugh.
Anyone hearing the whole encounter wouldve assumed that the inmates were running the asylum, but
it was just the release of tension. There was nothing else to do. Here were two married men and one
bachelor, all over thirty, all making lots of money every year, in the mens room of a white-shoe brokerage
amid broken glass, blood, water, and dented metal partitions. Here were three combat veterans with four
Silver Stars, six Bronze Stars, five Purple Hearts, and a Distinguished Flying Cross between them, fighting
in a restroom to stop one idiot from killing their mutual boss. Each of them had faced death many times and
won. Any of them could have killed Hall in a split second, yet here they were, fighting about something
that didnt matter a whit in the big scheme. It was so stupid, it was funny, once the emotions were expended.
As they stopped laughing at the sheer ridiculousness of their situation, De Santi told Hulka and Johnson
what had happened. When Johnson had left the venture firms building, Dave Martindale, the partner hed
been developing, had seen him hitting the wall and his car. When Johnson left the parking lot and turned
north, Martindale had gotten on the phone to call De Santi, whom hed known when they were both at
Goldman Sachs. De Santi realized this was going to be bad. He was pissed himself at Halls ambush, and
he knew enough about Johnson to foresee that he would need help. He knew that Phil was going commit at
least one felony if he got close to Hall. Hulka was also ready to help a fellow vet.
They got up and cleaned up as well as they could, and Johnson, now meek with spent anger, walked
around the corner to the back office manager, Tom Pigozzi, who was in charge of facilities. He told him
about the broken mirror and the dented partitions and offered to pay for the repairs. Toms only question
was, Why did you do it? Johnson was incautious, but he trusted Tom for some reason, and he told him
the story. Get out of here. It will be taken care of, said Tom.
How is it
That dickhead Hall caused this, and I know about the crap he pulled with the error. You wont pay a
penny on this. I wish youd been smashing that asshole around.
Johnson was stunned. It appeared that everyone hated Hall, and that somehow made him feel better.
He went back, and De Santi, Hulka, and two of the institutional equity guys were waiting. I think we all
need a drink, said De Santi.
Im buying, said Johnson, and off they went to the bar at the Palace Hotel.
 Chapter 24
Nothing Is Enough
After the humiliation of Inland Ventures, Johnson asked Hall about his assignment of the account. Perrys
response wasnt surprising. Those sorts of accounts are firm accounts, and since the broker involved will
be working with corporate finance, we cant have someone who makes errors working the account. Inland
Ventures is an account the firm has identified, and I was asked to assign it, and I did. My decision, and
thats it.
In the past, Johnson wouldve argued, but now he knew that it was useless. So he decided on a bold
and illegal strategy. There was a company in San Jose that made specialized electronic equipment, including
voice-activated recorders.
One night, he had returned from LA, and he had some things he needed to check at the office. It was
after 6:00 p.m., the office empty, the janitors yet to arrive. He went into Perrys hole and looked for a place
to hide the recorder. The top left drawer of Perrys desk didnt go all the way to the back panel, leaving a
space about six inches deep. Johnson pulled out the drawer, sweating both from the fear of the illegality
and of possible detection. He taped the recorder against the back wall of the desk. There was a small hole
between the pedestal and the top through which he could feed the microphone cord. That completed, he put
the drawer back in and taped the mic in place next to the slides on the middle drawer. If all went well, he
should be able to record all of Perrys conversations and maybe some of his phone traffic, as the phone was
just above the mic.
The move to San Francisco had actually been good for Johnsons business, and he was starting to think
that maybe there was truth to Morgans madness of the open-plan office.
There was another difference. East Coast money, by and large, was oldor, at the very least, middle
aged. Time, as most things in America, was compressed, and old money could be as young as maybe
seventy-five or a hundred years; on the West Coast, the money was perhaps ten years old. The money was
new enough that the convoluted infrastructure of financial advisors hadnt developed to the degree it had
on the East Coast. This meant it was easier to develop business in the West.
When the glaciers ravaged California, they left a pattern like a right hand. The index finger had clawed
out the San Joaquin Valley, the middle finger the Salinas, the ring finger San Francisco Bay, and the little
finger a place that would be called Silicon Valley. This finger had left behind mountains on both sides to
shelter the valley from weather extremes, it had also left fertile soil and creeks and rivers to water it all.
Initially, it was a lush area of fruit farms and orchards that gave way to houses. By the late 1950s, the valley
was fertilized by intellect.
From the halls of Stanford University and from the carnage of World War II came new technologies.
Bill Hewlett and Dave Packard started a company in a garage, manufacturing oscilloscopes. Another young
man named Bob Noyce came to the idea of integrating electronics and called his company Intel. There were
many more, and over time, driven by the space program, military, and consumer spending, they grew to be
large companies seeding the next generation. Buildings of concrete pads and tilt-up, precast cement walls
appeared overnight. The farms and orchards disappeared. New roads were carved, making the maps out of
date. Wealth was created, footloose and fancy-freenot bound by rules, conventions, or heritage. It was a
dream situation for a broker with a gift of gab and a willingness to work hard.
Johnson was certainly willing to work hard, and he was developing a gift for gab, even though he was
still prone to tell people more information than they needed. Firms like L. F. Rothschild, Hambrecht &
Quist, and Robertson Stephens had spent lots of time working with the new companies and even investing
firm capital as venture partners. After seventy years of selling stocks and bonds for companies like Du Pont,
General Motors, and General Electric, Morgan Stanley decided to capture a portion of the new wealth.
The firm brought one of its partners out from New York to head up the new venture and hired a Stanford
MBA named Fred Sciprione to be the point man in the Valley. De Santi met him first. They bumped
Stanford rings like dogs sniffing each others butts. De Santi introduced Johnson, and Johnson immediately
liked the guy because he asked if Hall was really as big an asshole as he appeared to be. De Santi and
Johnson confirmed Freds opinion. There were some others who Hall had fucked over, and in typical
California fashion, they formed a support group. They went to lunch together, drank together, and talked to
each other about ways to return the fuckings Hall was dishing out. It was dangerous enough to have a group
of employees actively working against you, but the addition of Sciprione made it potentially lethal. Johnson
never revealed the existence of the tape recorder, but he input the information to the group in what were
seen as very perceptive guesses about Halls actions.
Sciprione could influence the assignment of investment-banking accounts. Sciprione would tell the
others when a new investment-banking client was being courted. Johnson, De Santi, Armstrong, or one of
the others would focus and start calling the company and its shareholders. When the time came for Hall to
assign the accounts, Sciprione would protest that so-and-so already had contacts at the company, and for
continuity, he should get the assignment.
Johnsons business gross climbed from the mid-two hundreds to 400K per year. He took Dianne on a
Caribbean vacation and bought himself a new car and eventually bought her a classic 1966 Mercedes 250
SL. For Dianne, it never seemed to be enough. She was always talking about how others had better cars
and houses and took longer, better vacations. He let her plan the trip to the Caribbean, retaining only fiscal
oversight. Of course, that led her to say to everyone, It was a nice trip, but if Phil wouldve spent more
money, it wouldve been better.
The attitude was spreading to other things. Right after they got the car, she started to militate for the
seats to be reupholstered and for the car be repainted, and of course there was always something wrong
with the car requiring a trip to the Mercedes dealer at ruinous costs. He at first attempted to reason with her
about the value of the trips and other things, but she rejected it all, and she was so difficult that he just let
her complain and he gave her more things. He continued to go to work early and stay late and to travel as
he needed. He didnt clear his trips or schedule with Dianne. He just did what was necessary. In a less-than-
conscious way, hed made the same decision that the brokers on the East Coast had made.
He managed to get through the summer and early fall without any further confrontation with Hall.
Morgan Stanley was recruiting younger brokers by promising them leads to the huge flood of business
coming from the firms push into investment banking for the Silicon Valley. With the information provided
by Sciprione, he was able to avoid crossing trails with any of Perrys favorites and develop accounts. He
even found himself profiting from the situation.
While hed been in Menlo Park, hed developed a relationship with an executive of Apple Computer.
One day, the Apple guy called with a story about a fellow Apple employee who was in deep financial
trouble, and the only thing he had to sell was Apple stock. Since Apple was still a private company, the
only market move was to sell it to an outsider who would have to sit on it until the company went public.
The fellow had five thousand shares to sell, and his client asked Johnson if he wanted to buy it. Johnson
hesitated about a nanosecond before agreeing.
He had no idea where he was going to get almost $200,000 to pay for it, but he knew if he found a way,
he could make a lot of money. He decided to emulate the firm and create a syndicate of buyers. He told a
couple of guys in the Menlo Park office about the stock, and they told others. Pretty soon, he was getting
calls from all over the system asking if he could sell the person calling some Apple. It was easy to turn
down most of the callers, but one day, he got a call that required some diplomacy.
Phil, this is Iver Lyche. Iver had been president of Shuman and had sold it to Morgan; he was now a
partner of the firm. Johnson didnt know him and in fact had never even talked to him before.
Hi, Iver, how are you? Johnson replied cautiously.
I understand, Lyche said in his Norwegian-accented voice, youve gotten your hands on some
private stock in Apple. Without waiting for a response, he went on, I told Bob Baldwin, and we both
would really like to get a bite of the Apple. Bob Baldwin was the president of Morgan Stanley.
Well, Iver, Ive been contacted by a fellow that mayhe emphasized maywant to sell some
stock. He was lying; hed already reached an agreement with the seller. But hes unsure of how much he
needs to sell or for what price, so I really cant give you anything at this point. Johnson was sweating; he
was lying to a partner of the firm and by extension the president of Morgan Stanley, but not as much as he
would have a year ago. He was getting used to the white lies.
 Well, if you get the stockand I know youll do a good job of working with the sellerkeep in mind
that Bob and Id be very appreciative if we got some.
I will, Iver. Thanks for the call.
In the end, only brokers who could keep their mouths shut got stock, and they didnt include Lyche or
Bob Baldwin. What Johnson didnt know at that point was that Hambrecht & Quist had been talking to
Apple about taking them public in partnership with Morgan Stanley. Before the company did its offering,
it split its stock four for one twice and two for one, meaning the five hundred shares Johnson had bought
became sixteen thousand shares. He had to wait some time to sell the stock, but he made about $200,000.
He repeated the process a couple of more times with companies like Hyperion Computer and Teredata, and
he always made sure his friends were offered stock and avoided allowing Hall to find out what he was
doing. It was probably illegal and possibly unethical, but he figured the firm would surely not return the
favor if the shoe were on the other foot.
He was still getting information from the tapes, even if it was difficult to piece together. There were
long gaps because he couldnt get into Halls office very often to change tapes and batteries, but what he
got was devastating. Hall had a conversation virtually every morning with Anson Beard and Mac Caputo.
It was obvious that Beard and Caputo wanted Hall to get rid of all the old Shuman people and were unhappy
because the firings werent going fast enough.
Perry took the hiring of young brokers one step further. He proposed to pair up the younger new recruits
with the older Shuman folks. They would operate as a partnership until the younger broker learned the older
brokers business; then Hall would fire the former Shuman broker. He assured his cohorts that hed come
down really hard on errors and mistakes that could be used to fire people. He told Beard on one call that
this was like a hunt and that he really enjoyed hunting and eventually killing the game. If Johnson needed
any more confirmation that Hall was out to get him, this was it. However, Johnson convinced himself that
he wasnt one of the targets. In his mind, hed never been a Shuman employee; hed been hired by Morgan,
so he was a Morgan personas if an ass like Hall was capable of understanding so fine a nuance in hiring
date.
He wanted to keep working at Morgan Stanley. It was the bluest of the blue-chip firms, and he wanted
to be the bluest of blue-chip brokers. He lived and ate Morgan Stanley. He even found that he was
emphasizing the words the firm to indicate Morgan Stanley, and he started to capitalize the word Firm in
his letters. He was adopting an arrogance about his employment. Hed deliberately stay quiet when others
started to talk about investments; then when everyone had had their say, hed speak. Well, Im with
Morgan Stanley, and we believe
Hed been selling for seven years, and from a standing start, he was now making over $100,000 a year
and had accumulated some capital from his venture-capital deals. He owned a house, had two kids who
appeared to be normal, a couple of cars, and a wife who could turn heads. In short, hed accomplished more
than he ever thought he could. If he continued the way he was going, in another seven years, he could look
at making over a quarter of a million per year. But he wasnt happy.
While he was doing 400K-plus in gross commissions, there were brokers with the IQ of a rock who did
more gross. They never seemed to lose accounts, and all their clients gave them more and more business.
He couldnt stand it; it made him feel inferior. He desperately wanted to show Hall that his impression of
Johnson was wrong and that he could measure up. His default response was to work harder and beat up on
himself.
He was living in a relativistic universe. There was really no hard-and-fast measure of success; it was
relative, and there was always someone doing better. For all the hard work, the long hours, the abuse, stupid
management, and the almost nonexistent ethics, the broker expected only one thingmoney. The firms
didnt care much how you did it, because the firms did better as the brokers did better, and the broker was
always on the hook for the majority of any mistake.
The desire to make as much money as possible often led to people cutting corners. Wave the prospect
of easy money around, and a certain number of dirtbags and downright crooks would respond to the bait.
Usually, the lack of morals was discovered in some crisis, but until then, if they did enough gross, they
could sleep with the managers wife and get a pass. If the gross was really high, the manager might even
pimp his wife out to keep the broker happy.
One thing Beard hadnt said at the enema meeting was that the firms were really in two businesses. The
first was to create demand for a product, and the second was to satisfy a demand. The two often crossed
over. If some institutional investor wanted to get rid of a huge stock position, the firm would create a story
that its brokers could use to create demand from customers. The seller was happy; they were out of the
position. The broker was happy; he had generated more commission. The unhappy one was the customer
buying the stock, who found out the hard way hed been sold crap.
This led Johnson to develop another of his maxims: Nothing created by Wall Street is done for the
benefit of the investor. You might not see the way youd get screwed, but it would happen. You just had
to wait.
Many of the really shrewd prospects knew this and resisted all efforts of brokers to sell them stuff. They
used brokers to execute trades they wanted done; that was all. The constant pressure to do more
commissions was the existential struggle of a brokers life. In the final analysis, the client was sacrificed to
the brokers need to survive and the firms need to constantly grow. The problem was that brokers had two
assets to selltime and knowledgeand only one, knowledge, could be leveraged. This immutable, logical
conundrum could drive the marginal brokers (and that was Johnson) to higher-income trades and clients
who fancied themselves traders, increasing the risk of error and loss.
The point was that from the day a broker started to make calls until he died, he was nothing more than
a hamster on a wheel. The hamsters spun the wheel faster, but they got nowhere. Just as business picked
up, the firm would cut the payout so that it took a larger share of the dollars generated.
It was an endless and no-win game for the brokers. They generated a good income, but they never got
rich unless they took advantage of the opportunities presented by the business to use the money to develop
real net worth. The cyclical nature of the business was like the seven years of fat and seven of lean from
the Bible. It was a rigged game for everyone except the firms. The firms didnt care about the brokers; they
were expendable, and the brokers didnt care about the clientsthey were also expendable. It was a race to
see who could use the other to their greatest advantage.
The brokers lot wouldve been one thing if the world had existed in a steady state, but it didnt, and
while Phil Johnson didnt realize it, he was living in a time of monumental change. History is not recognized
by those living it, so most people live in a reactionary way, and that was true of Phil.
The United States was still reeling from the trauma of the Vietnam War and the economic fallacy of
trying to finance that war, providing all the products to satisfy the insatiable hunger of the seventy-six
million baby boomers, the pressures of the Cold War, and the massive social changes occurring at the
junction of generational transfers of power.
The oldest of the baby-boom generation started to come of awareness by 1960, and they strained at the
conservative nature of their parents and grandparents and could see what they thought was a better world
if only the old folks would leave them alone to build it. All their hopes and dreams were encapsulated in
the election of John Kennedy in 1960. Like all such hopes, it was largely a chimera.
Kennedy took the nation to the brink of war over missiles in Cuba. He turned the advisory role in
Vietnam to a combat role. The dream of a better, if ill-defined, world was shattered by a bullet costing less
than a Coca-Cola, leaving the boomers angry, rebellious, and feeling entitled. The race to create the better
world immediately and the fecklessness of politicians dropped the country into the classic guns-and-butter
crisis. It couldnt finance it all, and mistakes were made in trying to do the impossible. Eventually, Kiplings
The Gods of the Copybook Headings returned, and things started to come apart at the seams.
When the world changes, the financial markets react. If the change manifests higher inflation, more
unemployment, and high interest rates, it will be a bear market that can last for a generation. With the death
of the dream in the harsh light of economic reality, the stock market went into a tailspin that would cut
prices in half in eight years. The end of such cycles can only occur when theres a complete loss of faith in
the stock market and all financial institutions. Although few knew it, the market would bottom in late
1974but it just went sideways from there. Finally, from the most unlikely of all places, the Carter White
House, steps started to be taken to change the direction of the economy.
 Paul Volcker became head of the Federal Reserve Board and immediately increased interest rates to
suck up the excess money created by the guns-and-butter mistake; inflation gradually started to come under
control, not that it was overly obvious. The mistakes of his predecessors cost Carter his job. His successor
was Ronald Reagan, who rode out of the California sunshine with a message of hope and uplifting belief
in the nation. All of this dynamic change was a prelude to the next adventure in the life of Phil Johnson,
boy financial wizard.
At Morgan Stanley, nothing was more sacrosanct than the morning meeting, starting at 5:30 a.m. in
San Francisco, and unless you were out of town or on the edge of death, you were expected to be there.
Absence was noted. It was a highly structured event and progressed with the inevitability of planetary
movementand was just as boring.
In April of 1982, Johnson was in the meeting and seated next to a man hed never met before. When
the meeting was over, he introduced himself and discovered the man was John Mendelson, the firms
technical analyst. All the firms employed people whose job was to analyze the actions of companies in
various industries and make judgments on whether the stock would go up and by how much. These
considerations were called fundamental analysts because they used the economy and the companys
financial reports as the basis for their calls. Firms often also employed people who attempted to divine the
movements of stocks by watching their price and volume patterns. This was called technical analysis.
Mendelson and Johnson walked from the meeting to the coffee room, talking about various things, and
Mendelson explained that he was in town to call on clients with his latest report. Johnson, still in awe of
the New York crowd and concerned about possible feedback to Perry, was calling Mendelson sir.
Phil, you can stop calling me sir. Im no one important. Call me John.
OK, John. So, what does your latest work show?
How familiar are you with technical analysis?
Not terribly. I read Edwards and McGee a couple of years ago, but thats about it, replied Johnson,
referring to the bible of technical analysis.
Well, thats more than most of these assholes have done, so you might understand some of the more
detailed stuff I wrote. But heres the short take. I believe the bear market hit its price bottom in 1974 and
has been in a trading range ever since. However, in the last year, it has been making a long-term bottom
with each succeeding bottom being higher than the previous one and volume increasing on each run-up to
the top of the range. This is called a rising triangle. Weve broken out of the top of the triangle, and I think
weve started a new bull market.
Wow, thats some forecast. So prices will start to rise? Johnson asked, fascinated.
Well, its not that easy or direct, but generally, we should start to see better action, Mendelson replied.
So how long will the bull market go for?
Until it stops, was Mendelsons reply. Im not trying to be a smartass, but calling the beginning of
a bull market is an once-in-a-lifetime deal. I have no idea of when it will end. Just enjoy it.
After that encounter, Johnson heard Mendelson occasionally in the meetings, but two years later, he
the left the firm to found an independent-research outfit. In those two years, Mendelson delivered his
forecast again and again, but as usual, few believed him. Yet, there seemed to be a different, happier tone
to the world. His call proved to be uncannily accurate. Ex post facto, most market watchers identified April
1982 as the beginning of a bull market that would last for almost two decades.
Johnson gradually regained his psychological balance after the near-death experience with Perry Hall,
and with the support of the rebels, he was feeling like he might survive. He moved his desk to the other side
of the floor and was now seated next to De Santi. Their pod of six was De Santi and Johnson; then in front
of them, two sales assistants, Kate and Julie; then in front of the women were Al Armstrong and Van
Trefethen. All were firmly in the anti-Hall camp.
As hed been told by Dianne and Perry any number of times, Johnson could be terribly dense about
things, particularly if they involved the shadier side of human behavior. As he grew more comfortable and
as others came to trust him, he was let in on the office dirt. Katherine was a sales assistant for one of the
older brokers. She was short but had a luxurious mane of wavy, brown hair that hung down to the middle
of her back. She moved with feline grace, exuding raw sexuality heightened by her habit of wearing very
tight sweaters in bold, primary colors. Red was her favorite. She filled the sweaters well, and when she
moved, most men watched her. Most desired her, and like most women, she was fully aware of her impact,
however much she might protest innocence.
She was married to the kind of San Francisco soul that gave the city its reputation. Her husband was
heir to some East Coast money, but he ran a candle store. Katherine gave substance to her sexuality. She
was not only married but sleeping with a married broker who had left Shuman when Morgan took over.
They had an apartment in the city where they would go to have nooners or spend nights away from their
spouses.
Her appetite didnt stop there. Shed taken an interest in De Santi and often found it necessary to be in
the coffee room with him. Johnson had to admit that even though he was relentlessly loyal to Dianne, hed
have found her hard to resist if shed come on to him like she had to De Santi.
One day, Katherine arrived with a plaster cast up to h midthigh. Everyone clucked with consolation and
a number autographed her cast, but De Santi had a better idea. He told Katherine he wanted to paint on it a
replica of the division patch for his old Vietnam unit, the First Air Cavalry. Most unit patches are small,
but whoever decided on the Cav patch must have had an inferiority complex. It was a huge, black-bordered
medieval shield. The interior was cavalry yellow, with a diagonal black bar and in the top right quadrant
was a black horses head.
Like most broken-limb patients, Katherine had been told to elevate her leg, which she did on the return
arm of her desk. In her usual way, she was wearing a wraparound skirt, so when she elevated her leg, she
exposed all of it as well as the uninjured limb. Most of the men in the office found at least one reason to
walk by her desk that day.
De Santi arrived with colored pens and pencils and began to draw the patch. He took an hour and a half,
all the while looking directly at what Johnson wanted to believe was Katherines gauzily covered pubic
triangle.
 Chapter 25
The Ghost of Christmas Past
As the fall of 1982 gave way to the howling winds and rain of a San Francisco winter, he continued to work
hard but found himself sinking again into a pit of self-doubt and feelings of uselessness.
During junior high school, his English teacher had made them read Dickenss A Christmas Carol. The
story of Scrooges redemption after visitations quickly became a favorite of Johnsons, and each Christmas,
he read the story again and tried to watch the movie version of the book starring Alastair Sim. One day,
hed been out of the office to see a client, and when he got off the elevators back at Morgan, the receptionist
told him that a woman had stopped by looking for him and had left an envelope. The envelope was plain
no return address, not even his name on the frontand not sealed.
He checked some messages on his desk and found nothing that couldnt wait. The mail was similarly
uninteresting, so he pulled the envelope from his pocket. Inside was plain, three-ring-notebook paper with
a few handwritten words. He read them and made a grab for his wastebasket, vomiting his fast-food lunch.
He stayed in the tucked vomit position and heaved again. Even at a brokerage office, vomiting is unusual,
and he attracted interest. Johnson jumped up with the letter in his hand and ran for the bathroom. He
slammed into one of the stalls, dropping his pants and panting with the pain of abdominal cramps. The guy
in the next stall was grossed out, and Johnson had enough sense to flush to remove the horrible smell. The
cramps came again and again in waves of pain. His asshole burned with acid, and his hemorrhoid hurt with
the pressure of sitting. The guy next to him left, saying, God, Johnson, I hope you arent dying in there,
but you smell like it.
He sat there with the cramps still hitting him in lesser and lesser waves, but he didnt feel well enough
to get up. So he sat there and pulled out the letter and read, You killed my husband and your friend. It
should have been you! It was signed Chandra Evans, the widow of his best friend in Vietnam.
In the months following his arrival in Vietnam in late August 1971, hed been flying with the Third
Fire Support Element. The unit had become operational with eighteen flight crew one of whom was his
long-time friend Dick Evans, and nine OH-6A helicopters. By October, three of the original eighteen were
dead. In November, seven more died. At the beginning of December, eight of the original eighteen were
still alive; their losses in personnel and helicopters had been made up so they were at full strength, but there
was a separation between the originals and the others. In the first two weeks of December, six more originals
died, leaving only Johnson and Dick Evans.
Bad weather from the fifteenth to the seventeenth gave them downtime for the maintenance crews to
repair some of the damage and the crews to rest. Evans ate and slept, and Johnson drank. He was a hopeless
drunk by now, and the Jim Beam flowed like water. Everyone knew he was a drunk, but no one was eager
to take him off flight status, since they figured the best way to deal with the problem was to let him make
a mistake while drunk and get killed.
On the eighteenth, Johnson had been shot down but was rescued; Evans had his observer killed by
ground fire from an unseen gun position. Evans came home with nine 7.62 mm holes in his bird. The
nineteenth was worse, if possibletwo of the replacements had been shot down in what they called the
triple: the pilots and observers killed, the helicopter destroyed. Johnson might have joined them if at the
last minute he hadnt seen a ZSU-23 hidden in the trees and pulled away before that viciously effective
weapon could blow him to tiny pieces. One of the other pilots had lost his windscreen and had limped back
with holes in two of his rotor blades, leaking fuel, and smoking.
At 4:00 a.m. on Sunday the twentieth, when civilians were still sleeping or getting a quick, early-
morning piece of ass, the corporal in flight operations woke them up. Most of them got up and, scratching,
wandered off to the latrine. Johnson reached under his bunk and grabbed two cans colored army green and
labeled simply BEER. It had become his antihangover method. He didnt need to pee, as the booze had
dehydrated him. He had slept in his flight suit, and he saw no reason to change since hed only been wearing
it for three days, so he got his helmet bag and checked his gear. He put on his sunglasses, although it was
pitch dark.
 He walked, unsteadily, to the mess hall. All the others were eating, but he wasnt hungry, so he went
to the coffee urn labeled A. The mess sergeant knew that there were those who wanted and needed the old-
style, thick, strong army coffee and others who, in his words, wanted pussy coffee. Johnson was an A-
coffee guy, not because he liked it but because he needed it. He loaded it up with all the sugar the mug
would hold and sipped it as he walked to the toast bin. He took a couple of pieces to sop up the acid in his
stomach but had no appetite for anything else.
He walked over to the operations hut where they would get their first briefing. The puddles left by the
torrential rains of the last few days glimmered weirdly in the red night-lights used by those working.
Although Camp Eagle was still a combat zone, the most enemy action it had seen in the last three years was
a Vietcong water buffalo that had blown itself up in a minefield.
The briefing was short. More complete information would come later at Camp Evans. The brief transfer
of information was alarming enough. Most of the intelligence they received overnight came from sensors
and listening devices dropped from aircraft. They were wildly inaccurate and considered a joke. He checked
the assignment board and found that he was to be call sign Termite Timer 91 and flying with Todd Smith.
Smith was a good head, and theyd flown together several times. Smith could always be counted on to
know where they were and where the nearest fuel dump was. He was cool under fire, and he was a great
person to have around if they went down.
At 0440, they all did their preflight checks. He was flying tail number 0987, an old and tired airframe
with a lot of hours on it. It had also been shot down and rescued once and was pretty banged up. The log
book was a catalogue of issues not significant individually or in total to deadline it.
They strapped in and did the prestart checklist. Johnson wasnt a great pilot, but he was meticulous
about preflight walk-around and his checklists. He had long ago memorized their items, but like a Catholic
priest who had said thousands of Masses, he never assumed his memory was perfect. They got the command
to start engines, and the sound of igniters and the whine of turbines winding up filled the humid air.
They received permission to taxi for takeoff, which meant to pull up to a six-foot hover and await
sequencing on the outbound vector. They all took off and assembled in a single line. It was supposed to be
in call sign order, but somehow, Timer 94 got between him and 90. It took about twenty-five minutes to fly
to Camp Evans.
After landing, they walked to the briefing hut, grabbing coffee as they entered. The intel officers began
by giving them the locations of allied units in the area and then moved on to a grim report of enemy actions
overnightand there were a lot of them. Many of the firebases near the Laos border had been hit overnight
with some casualties. They were particularly to look for signs that the enemy was moving troops and
equipment east toward US bases. Near the end of the briefing, one of the pilots, Walkinshaw (actually
Clinton A. Walkinshaw II, as he let everyone know), asked a question. Sir, any word on the clearing of
the AA in ville? He was referring to the small cluster of huts directly under the route they took leaving
Evans. In the last few weeks, several of his unit and other aircraft reported taking ground fire from the area
of the village.
We asked the elders of the village and they said theres no VC there, so were satisfied, was the
response.
With all due respect, sir, drawled Walkinshaw, what else would they say? There was laughter, and
the captain just stared.
At 0545, they reported back to the flight line and preflights. While theyd been gone, the maintenance
had topped up the fuel tanks and checked all the fluids. By 0600, they were running and ready for takeoff.
They lifted up and flew off to their assigned patrol zones. Johnson had number five, which, because of the
geography, was almost due west of Dick Evanss zone 2. The timing was designed to get them into the
patrol zones at what the army called BMNT (or begin morning nautical twilight), a holdover from the
French and Indian War. It was the point of the lowest energy level for humans. It was the earliest time a
target could be discerned without the use of illumination and the best time to find the enemy.
They carried five hundred pounds of JP4 fuel, which they burned at a hundred pounds per hour, giving
them about 3.5 hours of linger time with a reserveso they had to refuel at least once a day. Most of the
time, they refueled more often, as evasive maneuvers used a lot of fuel. Just as the light got strong enough
to see clearly, Smith told Johnson he thought he saw drag marks on the ground. This was usually a dead
giveaway of enemy presence, since it marked the moving of supplies, usually from sampans in the numerous
creeks and rivers. He tightened his seat belts, did a quick sweep of the instruments, and then looked for
landmarks so he could place himself on the ground.
After ninety minutes of fruitless search, they got a radio call to proceed to a nearby firebase for possible
transport of a US liaison officer to Camp Evans. They landed and waited forty-five minutes before they
were told that they could return to their mission. They flew back to their zone and buzzed around, looking
for trouble. Johnson was monitoring the radios and knew that everyone else had already been back to refuel.
They were getting to what he called fat bingo. Bingo was a hundred pounds of fuel, and he called 125
pounds fat bingo, meaning hed return early.
A radio call came over their network. Apple Highway three, this is Termite Timer niner-seven, in
contact. RTB, bingo. Over. This was Evans reporting he was in active contact with the enemy and was
returning to base to refuel. Johnson decided to return also to refuel and see Evans. Apple Highway three,
Termite Timer niner-one. RTB, bingo.
Dick had already started back, so Johnson cranked the throttle to get there at the same time. As they
entered the base traffic pattern, he saw Dick behind him. Since Evans was in contact, he got priority, so
Johnson eased off the throttle and Evans buzzed by. Dick landed at the fourth refueling station and was
going to do a hot refuel with the engine running and blades turning. It was a dangerous process, since
helicopters generate huge amounts of static, and an ungrounded spark could be a disaster.
Johnson landed and realized that he needed to pee and barf. He ripped off his seat belts and sprinted for
the edge of the pad. He barely got his boom microphone away from his mouth before he barfed his
nonexistent food. After that was gone, he unzipped and peed on the barf hed just deposited. It didnt take
long to pump four hundred pounds of fuel, and before Johnson was finished, Evans was preparing to take
off.
Johnsons helicopter was ready about the same time. Smith had somehow managed to convince the
refueling guys to do a hot refuel, so they didnt have to start engines. Johnson strapped in quickly, and
without even checking to see if Smith was strapped in, made the call to get permission to take off. He lifted
off and followed Evans, who by this point was about a minute ahead.
There are shapes, signs, and noises a person never forgets. The sound of an AK-47 with its bang-thump
gas operation, the engine sound of a P-51 Mustang or English Spitfire. The muzzle end of a Russian heavy
machine gun was another. The snout of the one hidden in the center of the village emerged as the roof
moved back. Johnson saw two tracers come from the barrel, meaning that ten rounds were on their way
toward Dick Evanss helicopter, and in an instant, the space where Evans had been was replaced by a huge
ball of orange fire tinged at the edges with whites and grays from the burning of two thousand pounds of
aluminum, steel, plastic, and magnesium. The rotor blades spun into the air, the tail boom fell away, and
then there was nothing. Johnson was so stunned, he flew through the debris cloud, which did no good to
his helicopter.
He flew on for the rest of the day, but his heart wasnt in it. He flew too high and fast to see anything
and toward the edges of the zone. It was, perhaps, an act of cowardice. After all, the death of two unit
members didnt change the basic mission. They were still supposed to find the enemy and break up their
formations. He wasnt engaging, and that was a violation of orders.
The normal human emotions of compassion and sympathy had to be pushed down deep into the dark
recess of their minds lest they make the men crazy. There just was no time to mourn. Each day, they had to
repeat the process of flight, seeking the enemy and perhaps their deaths. To mourn wouldve lessened their
effectiveness and allowed fear to triumph. The only way they could get up and fly was to suppress fear.
They had to suppress all those emotions deep within their minds by rationalizing away death and the reality
that they might be next. Courage is acting in the face of fear, and courage was all that was left.
Johnson hurt terribly; he couldnt let his fear show. But his courage failed him. It wouldve been
Hollywood if he and Smith had flown back into battle with guns blazing, seeking death, glory, or both. That
was reserved for the fantasy of the silver screen. It had no connection with the reality of life in combat.
There was an empty feeling of loss and fear that he could have been the one who died. Throughout the rest
of the day, he became convinced that he should have been the one. If he hadnt been sick, hed have taken
off first since he needed less fuel. Why Dick? Why, why, why? He was the drunk, he was single; Dick was
married, Dick had a daughter. Dick had a life to go to after the war; Johnson didnt. Why, why, why had it
not been him?
His fear didnt descend to the point of suicide by the enemy (which sometimes happened), but the self-
destructive behavior of his drinking continued. At the end of the day, he savaged the intelligence office by
cursing and yelling about the fucking stupidity of trusting the fucking gooks to tell the truth about whether
there was a gook gun in that fucking gook village. If the fucking G2 had done its fucking job, then the
fucking gooks wouldnt have killed the best fucking guy in the fucking unit. The intel officer, who
outranked Johnson, was really pissed at being dressed down by a lieutenant and started shouting back at
Johnson. It progressed to the point that they were both on their feet and getting ready to rumble when two
NCOs pulled them apart.
During the Christmas stand-down, Johnson went on a five-day drunk, which made him a legend with
the NCOs and enlisted, whose opinion didnt count, and with General Tyler (on whose boots he had
vomited), whose did. At the end, he was removed from flight status, made to attend drug counseling.
Hed written Dicks wife, Chandra, a letter explaining what had happened and in his normal way told
her everythingthe intel failure, his drinking, his need to vomit and pee, and the fact that he should have
taken off first. He did a catharsis with her, hoping to assuage his own guilt with a person he could trust. She
had written back a short letter telling him he was a jerk and wished him dead, and then there was silence.
Now the ghost of that past Christmas was back. Hed made attempts over the years to contact her by
phone; hed sent her Christmas cards and gifts for their daughter, Deena. All were returned unopened. Now
something had happened, and shed reached out to contact him to show that the pain of loss had changed
to something more serious. If the evidence of the letter was to be believed, shed left Chicago and come to
California to press her case.
He was faced with one of those times when a person knew that he wasnt going to get any more work
done that day, so he stood up to leave. Out of ritual, he began to stuff items into his briefcase knowing that
he wouldnt work on any of it, but carrying his briefcase made him feel important somehow. Everyone else
carried one, although he knew that inside them was nothing more important than lunch.
One of the guys said, You look like you just lost your best friend!
Yeah, was Johnsons only reply.
Suddenly, a wave of anger leapt up from down deep in his soul, and the part of his mind that held
destructive impulses in check released under the stress of the letter. His right hand shot out, fist balled, and
slammed into the plasterboard pillar next to his desk. His 170 pounds was fully behind the punch, and the
momentum sent his fist through, followed by most of his hand until he felt the I beam encased by the
wallboard. He withdrew his hand, now dripping with blood, and left the office.
The catharsis of the punch had made up his mind. Hed tell no one, not that he had much of a choice.
He couldnt trust his wife; he didnt have a pastor or a counselor. He wasnt comfortable telling any of the
guys in the office. Hed learned the hard way that revealing a weakness like this would be used against him
somehow and someplace not of his choosing.
He was never sure how he got home that day. He had no memory of the drive, even though it involved
paying a parking attendant, negotiating San Franciscos weird streets, and driving down a freeway. He got
home, but how was a mystery.
Christmas that year was miserable. The kids made out like bandits. Dianne scored big also. He went to
the Saks store in San Francisco and did a walk around the various floors until he found something that
struck his fancy. It was a flaming-red Ultrasuede two-piece suit with a black fox collar. He knew instantly
that with her color of hair and complexion, it would be devastatingly attractive on her. They even had it in
her size.
He got the usual stuff fathers get: some ugly ties, books, and some silly stuff. But what he really got
was a sad heart and an emptiness and grief that never died. On the twentieth of December, he sank into a
huge funk and didnt go to work because he knew hed be ineffective. The urge to drown his sorrow in
drink was strong, but the one thing he had to be grateful for was that he resisted the drinkingbut couldnt
avoid the depression.
 Chapter 26
Changes and Foolishness
A brokerage office is like any community. There is the face that is seen and the face that is unseen by the
public. The public perception of brokers during the 1980s was pretty poor, and if it had seen some of the
stuff that went on in the office, its goodwill would have been nonexistent. There were items of humor, of
pathos, of agony and defeat. The humor was shared, but rarely were the other emotions displayed or even
discussed except as rumors.
Showing the brokerage firm had few standards, and despite Perry having zero interpersonal skills, he
had somehow recruited two brokers known as the Randy twins: Baum and Longfield. Longfield had been
a male model and was happily married. He was a decent guy, but Johnson never really trusted him. Baum
was a real asshole. If there had been a contest for a person who looked the most Jewish, Randy Baum would
have won it hands down. He had a large, hooked nose, tightly curly hair, and even spoke with a Yiddish
accent. Johnson noticed something early after meeting Baum. He seemed to be constantly energetic,
fourteen hours a day, five days a week. He just went and went, like the Energizer bunny.
Johnson didnt have a lot of close contact with Baum, but from what he heard and saw, he didnt like
the guy. The two Randys sat in the next pod over from Johnson. One morning, Johnson was in the office
early, getting ready for a trip. There were few others around, and it was quiet. Suddenly, there was a loud
whirring noise from the alcove behind Randy Longfields desk. It was so loud and so surprising that even
the institutional guys looked around. Johnson nearly jumped out of his skin.
It turned out that Longfields wife had given him an all-in-one coffee grinder and brewer. It had a timer
so the coffee would be ready at an appointed time. Randy had programmed it wrong, and it had come on
too early. After he arrived and saw that the coffee had brewed and the thing had gone through the cycle and
then turned off to avoid burning the coffee, he reset the timer. A few days later, Johnson and most of the
brokers were out of the sales meeting when the thing went off. Everyone looked over, and a few made
comments. A few days more of this happened, to the dismay of all.
Finally, one morning Randy had the thing all set up, and it kicked on and ground the coffee. All
conversations stopped; phones went on hold until it was finished. The brewing started and completed.
Randy picked up his cup of coffee. When he was seated again, one of the institutional equity guys walked
up to the coffee machine and in one fast motion swung a five iron in a sweeping arc and down on the
machine, smashing it to bits and spraying coffee on the walls, sending bits of glass and plastic everywhere.
Randy and the golfer looked at each other for a minute, each sizing the other up. The institutional salesman
left to take a call, saying over his shoulder, Use the fucking coffee machine in the fucking coffee room,
leaving Randy to clean up the mess.
A few weeks later, Johnson came back from a meeting in the East Bay and grabbed a McDonalds
burger to go before coming to the office. As he walked by, Randy said to him, You know, Johnson, that
crap will kill you one day.
Johnson looked at him and said, Randy, I was shot down six times in Vietnam, I spent eighteen months
in a hospital, I was infected with virus and fungus internally and externally. I drank water from rice paddies
fertilized with human and animal shit, I had hepatitis and malaria. When I put this in my stomach, it says,
Thank you Jesus! Fast mouths were a fact of life in the brokerage offices.
He didnt seem to be having the success of others in the office. The Randys, for example, were getting
fifty-thousand-share orders, and lots of themtheir gross commission levels were among the top in the
office, and they didnt have the T&I report. Why he wasnt getting the orders? He often stopped using the
phone and pretended to be doing the endless paperwork of the business just so he could listen to one of the
Randys make a sales pitch. He eavesdropped, and to Johnson, they werent saying anything that he wasnt
saying, yet they got bigger ordersand, most importantly, they were getting to reinvest the money after
the sale, whereas Johnson was getting put off with the line that the client had other things to do with the
money.
 He didnt understand what was happening. So he did what he normally did. He assumed they were
smarter than he was, and therefore his only way to compensate was to work harder. One of the aspects of
the morning meeting was the listing of which stocks and industries the institutional desks had axes in. An
axe was a position the firm owned or wanted to own, or it had a client who wanted to own the stock. The
head of the institutional equity desk in New York would read off the buys and sells, and everyone who
knew anyone with a large position would then call the holder to see if he wanted to buy more or sell his
stock. Johnson used this in combination with the T&I list. If hed seen someone who had indicated a desire
to sell Intel and the firm was looking to purchase Intel, hed call that person and indicate the firms desire.
Often, this resulted in an order.
Of course, like most things in the brokerage industry, it was a great semifiction. While the firm might
be purchasing or selling Intel, that preopening interest was usually satisfied on the opening or shortly
thereafter by an institutional source of stock. Second, Johnson was dealing with sellers of restricted stock,
and there was a legal process that had to be satisfied before the stock was good for delivery. The institutional
interest was for good-delivery stock, only many times, the stock position indicated for in the morning was
sold and resold before the end of the daybut Johnsons stock wasnt available for sometimes weeks due
to legal hang-ups. He was too stupid in the ways of the markets to understand the fiction, and he was never
a good reader of nuance, so he plowed on.
One of the good aspects of the T&I list was that it allowed a person to identify what was called the
stock-rich investor. People assume that corporate officers who hold a lot of stock in their company are rich,
and thats truebut what they may not be is liquid. They are, in well-worn Wall Street axiom, cash poor
but stock rich. The Holy Grail was to find the investor who was cash and stock rich, and those were usually
the members of the board of directors. In his use of the T&I list, Johnson had located a number of those
people, and that led to some interesting situations.
One day, at the morning meeting, he heard that Morgan was going to be a big purchaser of Intel. So
when humans, as opposed to stockbrokers, actually got out of bed in the civilized world, he placed a call to
a legendary investor in Southern California who had been the founder of several computer companies and
now sat on the board of Intel. He informed the mans assistant that Morgan was a big buyer of Intel and
that this might give Mr. Polonsky a good liquidity event if he was thinking of selling some stock. Johnson
had carefully checked to be sure that Intel wasnt about to report earnings, because until that news was
disseminated, the insiders couldnt sell stock.
A few minutes later, he got a call back from the assistant, who said that Mr. Polonsky did wish to sell
ten thousand shares of Intel. Johnson put the woman on hold and called his restricted-stock desk to get
assurance that he could sell the stock, because since it was restricted, the firm would have to cover the sale
with other stock it held in its vaults. He got the assurance and sold the ten thousand shares. He returned to
the assistant and told her the order was done.
Now, he had a problem: he needed to open an account by days end, and he had to get signatures on the
restricted-stock paperwork. In 1982, e-mail was but a gleam in some visionarys eyes, and faxes were
unreliable and expensive. While Morgan had a fax machine, Polonskys office didnt, and Morgan had no
office in Los Angeles. Johnson was on a high-wire act if he didnt complete the paperwork for the account.
The trade would be broken and it would be an error, and Perry would fire him. If he didnt file the restricted-
stock paperwork by the end of the day, hed be in violation of the law, and such was his respect for the law
that he just knew the Securities and Exchange Commission would be on his doorstep the next morning. If
that happened, Perry would have the joy of firing him just before the US marshals dragged him off to federal
prison to meet his new husband, Bubba. There was only one answer.
In those days, Pacific Southwest Airlines, or PSA, flew hourly between San Francisco and LA, so he
looked up in a book he carried that listed flights and found that one was leaving in an hour. He called Hertz
to reserve a car, grabbed new-account forms and 144 paperwork, and was out the door. If everything
worked, he could get the paperwork signed, mail the SEC its original and two copies of the Form 144 from
LA to satisfy that requirement, and catch a flight back to San Francisco before the end of business so he
could establish the new account and meet Morgans requirement.
 He got to the airport, got the flight, got his car, and got to Polonskys office less than three hours after
hed made the call. Max and his assistant were impressed that hed flown down just to get the forms signed,
but Johnson failed to take advantage of the opening he had. There is no better time to make progress with
a new client than when youve just done something extraordinary. Johnson had just traveled eight hundred
miles and spent money and time to facilitate the trade and the client was impressed, but Johnson missed the
chance. He didnt take the opportunity to ask Polonsky to lunch or to ask for time to talk about what else
he and Morgan could be doing for him. That was the difference between him and the Randys. They were
working toward the next transaction, toward the future. Johnson was running as hard as he could to just get
the sale. While that sounds elementary, it didnt occur to Johnson to do anything more. He wanted to get
home and show Perry that hed made the sale.
The anti-Perry gang was getting rather bold. Perry was floundering in his attempts to build the office,
as the tapes Johnson was recording showed. Hed demonstrated to the office that he was a chauvinist pig,
which turned the women in the office against him. He did this in his usual ham-handed way. Morgan Stanley
had had a sexual discrimination suit filed against it by a couple of women bond traders and was being
investigated by the government. The suit had been covered by the papers, and the fact that its precious
reputation might be dinged due to human frailty scared the crap out of the mighty Morgan. The firm, of
course, decided to show the world it was not a discriminatory operation, so Perry was ordered to find and
hire a woman broker.
Perry did them proud; he hired twoone in the retail section and the other an institutional salesperson.
This was more amazing than it appeared. Less than 2 percent of the brokers in the country were women,
and for a guy with the personality of a rock to find not one but two was truly earthshaking. The hires, of
course, didnt signify any change in attitude. Perry treated them like they were light bulbs or typewriters.
One day, Perry was giving someone a tour of the office, and as he walked past the retail female broker,
Laurie Poston, he said, And this is our woman broker.
In his usual way, his inflections and attitude indicated everything that the lawsuit allegedthat women
were tokens and were exhibits to be shown off like hippos in the zoo. Laurie hadnt been selected because
of her brains but for her genitals. She didnt react in any way to Perrys antifemale comments, but she noted
every one, and none of the other women missed them. Perrys sex discrimination didnt stop at brokers.
Sales assistants were the backbone of the operation. While the brokers were compensated by
commissions and were constantly at risk, the sales assistants had often taken the same registration exams
and almost all the time knew more about the workings of the firms than the brokers did. As good assistant
was one who could take the operational responsibilities of the business away from the broker, freeing him
to do more business. The problem was that Morgan, and the industry in general, didnt pay the assistants
well enough to retain them for long, so there was constant churn.
Perrys office manager was the delightful Kathy Tealdi, of course, and nominally, she was in charge of
the assistants. Perry, however, exercised the ultimate control, and he exercised it often. One of his selections
was a girl of twenty-five named Diane Fingado. Fingados only qualification for the job was that she passed
the elbow test. In that test, a woman interlaced her fingers behind her head, with her elbows in front of her.
Then she walked at the wall. If her elbows touched first, shed failed the test. Fingado had the biggest set
of tits hed ever seen on anyone other than a stripper. She also had mane of dirty-blond hair that she was
always raking back over her head.
She was quite a picture, and the stories were that she was free with her favors and that a number of
people in the office had sampled the goods on offer. Among the rumored persons was Perry, which most
people refused to believe, since most of the guys felt Perry couldnt get it up and the women couldnt
believe that any woman would have such bad taste. Johnson knew better, since on one of his tapes, hed
caught Perry arranging a date with Fingado.
Johnsons sales assistant was one of the great ones. She actually relaxed by typing! She was super-
efficient and anticipatory, and most of the time, when he said that he wanted something done, shed already
done it. She was very smart and had a wicked sense of humor. Shed been married to a guy who worked
for Chevron, but that had ended quickly. Johnson had met the guy once and quickly formed the opinion
that he was too quiet and different from Julie. It was like a mouse being married to a tiger.
 De Santi was a real practical joker, and one day when Julie got up to get a cup of coffee, De Santi
jumped up and got into the kneehole of her desk. Julie walked back with her full cup of coffee, and as she
reached her chair, De Santi reached out and grabbed her ankle. While numerous unearthly sounds were
heard daily in the office, the shriek of a totally surprised woman wasnt one of them. After De Santi crawled
out, Julie collapsed in her chair. Everyone in the office was looking over, and the six of Johnsons crew
were laughing like maniacs. Hall stuck his head out of the office and quickly realized that no one was being
raped, so he went back to quietly being an asshole.
Johnson had gotten very close to De Santi and in fact was very jealous of him. De Santi seemed to have
it all. He was smart as all get-out and seemed to know everything about everything. He made sure you knew
that.
De Santi was actually too smart for his own good, and he coupled that with an honor code that was
rigid in the way of steel. He was ready with a judgment of right or wrong in every case and was harsh when
he found a person lacking. It was an impossible standard, but he lived by it, which explained why he had
few lasting relationships with women. Womens indirect approaches and nuances were judged to be
dishonest and rejected. In De Santis view, women lacked the rationality and accountability to be anything
other than lovers.
Johnson knew that he fell short in De Santis eyes in a lot of ways, but Johnsons code of life made
room for others. Besides, though Johnson had few friends, he had been seeking for years a way to
community. If De Santi wanted to be his friend, then Johnson was going to be a good friend in return despite
the put-downs and judgments. Johnson just figured he had to work harder to measure up.
Johnson and Dianne went sailing on De Santis boat and were often invited for dinner parties at De
Santis apartment with its million-dollar views of both the Golden Gate and the Bay Bridge. The parties
were lively, and it was always interesting to see whom De Santi was sleeping with this week.
It was a crushing blow to Johnson when in March of 1983, De Santi took him aside to tell Johnson that
he was leaving to join a venture-capital firm down the Peninsula. He wanted Johnson to have his accounts
and was telling him early so Johnson could start talking to the clients and get them to transfer. I dont want
that hump Hall to get the accounts. Hell give them to his ass-kissing shitheads. Youre the only guy in the
office Id trust with the accounts.
De Santi was right about Hall, but Johnson wasnt sure that he was right about the trust factor.
De Santi had struggled with the business for years. He was one of those people who seemed
constitutionally ill suited to be a broker. Being a broker involved creating a reality different than the one
the client saw; that required a careful sharing of selected information and withholding other information. It
included communicating concepts and not necessarily facts, and De Santi was a walking compendium of
fact.
Brokerage required verbal sleights of hand and phrases to get to the customer and then more to convince
the customer that you were his or her financial salvation. It required an absence of dogma and a flexibility
with facts that De Santis honor code wouldnt permit him to develop.
There was restlessness in De Santi that Johnson recognized in himself. It was a feeling of never being
satisfied and wishing for more structure and the certainty of the military (which was a fallacy). It was a
willingness to find others with different experiences to be inferior and unworthy of attention. It was frequent
fits of temper and vicious tongues that did harm. It was, at bottom, a feeling that somehow youd been
screwed, and there was nothing you could do about it.
In any case, De Santi was leaving. His reasons were that in venture capital, he wouldnt have to deal
with the assholes in the brokerage business, and hed be working on deals that would use his Stanford MBA.
He was committed to going, and Johnson knew it was useless to reason with him when hed made up his
mind.
De Santi didnt have a lot of accounts, even though hed been hired by Morgan Stanley because of his
education. He had proven so difficult and nonmalleable to the Morgan way that he hadnt enjoyed the favor
of Hall. He did have one interesting account. Somehow, someway, De Santi had developed a relationship
with the Northern Cheyenne Indian Tribe, which was located in Montana. It was about a five-million-dollar
account, so it was substantial.
 When De Santi told Hall he was leaving, Halls first question was what he was going to do with his
accounts. When De Santi told him that hed given them to Johnson, Hall exploded. You dont assign
accounts here, De Santi, I do that! There are procedures that are followed to provide an equitable
distribution, and you violated them. Johnson wont get the accounts!
De Santi didnt hold his temper. Listen you prick, those accounts I developed by myself with no help
from you. Theyre mine, and Ill say who gets them. You hired a bunch of ass-kissing shitheads, and you
just want to feed them. Johnson is the only guy here with any honor or morals. Ive already talked to the
accounts, and they have all signed the forms to transfer to Johnson. Theyll leave the firm if they have
anyone else call them. If that happens, you can explain to your bosses how you chased clients away!
With that, De Santi executed a perfect about face and walked out of the office. The rest of the pod heard
the exchange and had to restrain itself from breaking into applause.
With De Santis departure, Johnson was isolated. Later in the year, Al Armstrong, one of the other pod
mates, left to join the Otis Spunkmeyer cookie company. Van Trefethan retired under pressure from Perry.
Hall wasted no time in filling De Santis seat with a guy named Jim Maletis, who Johnson expected was a
spy.
He began to notice something else that was potentially dangerous. Johnson didnt think much of his
looks. He was shorter than average at five foot nine and a half; his hair was thin and light and
undistinguished, and it was constantly messed up. He had a full, round face and a large nose that combined
in pictures to look alternatively fat, Jewish, old, or just ugly. His body was never going to turn any heads.
He had a very broad set of shoulders, but his legs were skinny and his body short. His calves were long and
thin and didnt look like Johnsons idea of a manly leg. Hed have looked lousy in eighteenth-century
breeches. He doubted if a woman would ever come on to him unless they were whores or really drunk.
The truth was that he had married Dianne not out of love but because she was the first woman other
than T.J, who had had free and open sex with him, and he was convinced that she would be the only one.
He didnt even know how a person would start a conversation with a woman he wanted to have sex with.
He was so convinced that he was a hideously cobbled-together set of parts that he had always been shy
about even talking to women unless they were married or old.
So it wasnt obvious to him that Julie had somehow taken an interest in him. There was nothing overt
like an open proposition or invitation to have a drink; she had more class than Katherine or Fingado. Every
so often, shed walk behind his desk and seemed to stare at him when he walked into the office.
So oblivious was Johnson that he noticed but didnt connect it when shed lean way back in her chair
so far that the only thing to be seen from his position behind her were the twin mounds of her boobs. He
admired the display but didnt connect that it might be a come-on.
To make his year worse in the personnel department, she announced in August 1983 that she was
leaving to join a regional brokerage down the Peninsula, near where her sister lived. He was really sorry to
see her go. They had had a great working relationship, but she was going to be making more money, and
that was the ultimate leveler.
In September, he lost the T&I report. Perry had decided that since Morgan had handled the IPO of
Apple that Morgan should be doing more restricted stock. The firm had made the commitment to more
technology underwriting and was actively seeking the venture-capital firms to use Morgan for their limited-
partner sales. In his usual fashionlike a sadistic child toying with a fly hes going to tortureHall
delivered the news.
Phil, I understand that youve been using a report the firm subscribes to called the T&I report to
develop sellers of restricted stock?
Yeah, Skip Karetsky forwards it to me interoffice from New York. Skip Karetsky was the head of
the restricted-stock department.
Well, its a firm subscription, and its not fair that you have exclusive use of it, so Im going to have
Ed Kirwin take charge and divide up the leads. Kirwin was a guy who had just transferred to the office
from New York.
 Ive never had an exclusive on it, Perry. Skip crosses out the people who are involved institutionally
or with deals that Morgan is doing, and I know who other guys are doing business with. I tell them the
client is selling.
Well, thats fine, but Im taking charge of it now. A thin smile crossed his face as he noted Johnsons
displeasure. At the same time, the black pools of his eyes lost all their personality and became even more
lifeless. I determine who gets what prospect around here.
Perry, Skip appointed me to be the restricted-stock coordinator on the West Coast. Dont you think
you should talk to him? This was Johnsons ace. It wasnt exactly true, but he was sure that Skip would
support him, and Skip was rumored to be on the fast track to partnership.
Karetsky doesnt run this office; I do. And youll get what Ed gives you. There it was. The impulse
to argue further would risk Hall firing him, so he decided to work on Ed, whom he didnt know wellbut
at least he seemed more reasonable than this prick.
Ed was fair with the prospects, but it was a blow to Johnson not to have all of them to himself. His
close rate was miserableor at least hed been told that repeatedly by Hall, so that he needed a lot of
prospects to grow his gross the way Perry wanted it. He had to find another way.
He was in the habit of listening to his illicitly garnered tapes as he drove home. One day, he had a lot
to listen to, and he came across a conversation that Hall had had a month before. Hed been talking to Anson
Beard and Mac Caputo. Johnsons microphone only picked Halls end of the conversation, making it
difficult to figure out what was going on. In this conversation, Hall was definitely on the defensive and kept
referring to the reason he was hired and that it was taking longer than expected to find what he called the
replacements.
Replacements? Replacements for what? What was he talking about? Whatever it was, he wasnt doing
it according to the plans that had been laid down. According to Halls own words, he was running a year
behind. He made a reference that he had one to go for, since it was just a matter of time before he made an
error and could be fired. Johnson, who had been getting complacent, was suddenly snapped back to the
reality that Hall was still gunning for him.
In one of his flashes of brilliance, Johnson decided to find out what Perrys background was. Know
your enemy. In those days, there was no Internet, so research was hard. He first went to the library and
looked up Hall in the Whos Who books and found extensive references to his uncle, one of the Morgan
partners, and some to the uncles brother John, who was Perrys father. He kept digging for information
and found an article about a fellow named Carl Hathaway, who had been the boss at Morgan Guaranty
Trust.
The Trust company had run into hard times, and Hathaway was brought in to turn it aroundwhich he
did with a ruthlessness that was the subject of the article. He had started by firing 30 percent of the staff,
and there was a reference to a member of his team who had been in charge of making sure the required
number were fired and that their leaving didnt disrupt the operation too much. The article described the
man as having the blue blood of Wall Street royalty in his veins, as his uncle was the founder of Morgan
Stanley; his name, of course, was Perry Hall.
Johnson had one of those feelings like when an airplane hits a thermala sudden feeling of no bottom
and your stomach falling. Hall was a corporate hit man! He was there to fire people and to make sure it
didnt disrupt the operations and growth of the office. The reference to replacements took on a context. He
was hiring brokers to replace the ones he fired, and one of those he was going to fire was Johnson, or least
thats what it had sounded like.
Theres an old joke that says that denial is not just a river in Egypt, and Johnson went into full denial
mode. Hed made great progress. Hed brought in a lot of business; hed even tipped off the investment
bankers that a deal they thought was locked in was in trouble and needed attention. He had gone on the
endless thirty-day trip around the country soliciting Shell Oil shares from retired employees for a tender
offer Morgan was handling. He had covered twenty-eight different cities in thirty days and was gone the
entire month. He had brought in over a million shares of stock and been paid fifteen cents for each share
tendered. Hed worked hard for the greater glory of Morgan. Surely that counted for something?
 Hed helped a lot of guys in the office do restricted-stock deals, exploiting his relationships with legal
counsels and transfer agents to get things done faster. In his travels, hed discovered an insurance company
in Seattle with a very aggressive bond trader, and with Johnsons introduction, the trader was doing trades
every day on the institutional desk. It was such a good account that Johnson had received a written
commendation from the head of Morgan Stanley fixed income. Hed followed all the rules and not made
an error of any kind for eighteen months; hed worked diligently and didnt complain; hed been friendly
with everyone in the office and spent his own time teaching people about restricted stock. Whenever there
was a conflict between him developing a prospect and another broker who had called on the same person,
he always deferred to the other broker. Surely, in this company built on prudence and rectitude, good
manners and helpfulness counted for something. It had to, or it was all an illusion.
In the quiet out-of-office dinners and lunches, he told others what hed found out about Hall, and it
didnt surprise any of the more senior people. They seemed to know more than he did. One day, he was at
lunch with one of the really senior brokers who had been on the board of directors of Shuman Agnew and
was currently serving as president of the Bohemian Club, San Franciscos grande dame of private clubs.
Clark Leffing was his name, and hed always been friendly and open; nothing seemed to bother him. He
was at the other end of his career from Johnson, so he could afford to be a bit more open about his feeling
about Hall and the Morgan crowd. Phil, I see you over there working your ass off every day, and I
wonderwhy are you killing yourself?
Johnson was bit surprised at the question; the answer seemed so obvious. Well, Clark, Im trying to
get my gross up and show that asshole Hall that Im not the scumbag he thinks I am. Clark knew all about
the circumstances of Johnsons move to San Francisco.
Developing those accounts might do you some good at the next place you work, since it will be a nice
book of business. But its not going to do anything to change dickheads opinion of you. Heres the situation
youre in at Morgan Stanley: its like youre a batter in a baseball game. Except in your case, instead of a
bat, you have a piece of wet spaghetti. The outfield fence has been moved to a thousand feet, and youre
facing a machine shooting golf balls at you at a hundred and fifty miles an hour. And if you dont hit a
home run, youll be out of the game.
He paused to let the image sink in and continued, Now, the little assholes hes hiringwhen they go
to bat, they have a canoe paddle for a bat, the ball is sixteen inches in diameter and being thrown by an
arthritic grandmother five feet away. The outfield fence is right behind the grandma, and all those asses
have to do is make contact, and theyre fine.
He paused again as the waiter cleared the plates. Youre not a broker here. You and all the rest of us
who used to be at Shuman Agnew are targets. Thats why Bruce Van Alstyne lasted less than a year as
manager. He quit when he was told his job was to get rid of all of us but find a way to keep our business
for Morgan.
The enormity of what Clark was saying was immense, intensely ugly, and breathtaking, if true. Johnson
didnt want to believe it, but the evidence of his research on Hall and his listening to the tapes told him that
something like that was going on. Clark, do you really believe that Hall, Beard, and Caputo are all in on
this? I mean, if someone found out, there would be lawsuits all over the place! Johnson riposted.
Get your head out of your ass, Phil. Whos going to believe a broker or a group of brokers against the
mighty Morgan? Theres no evidence that proves anything, just a bunch of shithouse rumors, and that wont
work. Johnson almost told Clark about the tapes but held back. Get used to it. As broker, youre subject
to the whims of the firm, and they know they can do almost anything to you and youll stay.
Johnson knew in his heart that Clark was right, but he didnt want to believe that of Morgan Stanley,
which was the paragon of white-shoe firms, renowned for its honor and integrity. Its whole business was
dependent on that honor. If they were going to fire all these people, it was dishonorable, and that didnt fit
with the perceived reputation of Morgan. Well, that fits, Clark. I found an article that said that Hall was
the hit man for a guy named Carl Hathaway at Morgan Guaranty, and he left there to come to Morgan
Stanley. Johnson waited for the response to this news.
 Well, yes, that would fit. He has no experience in investment banking, institutional sales, or retail, so
hes here either to do a job or because his uncle founded the place. Morgan always did like to retain the
bloodlines, Clark responded while he stirred his coffee.
This deal of firing all the Shuman guys seems like such a cold-blooded thing to do. Its just so huge.
Why did they spend all that money to buy Shuman if they were just going to fire everyone?
You want to hear cold-blooded, Phil? Have you checked the lawsuit against that asswipe who refused
to pay you and got you in trouble?
Whats happening with that?
Apparently, all the other firms the jerk defrauded got together and filed a case against him, and I heard
Perry talking to Iver about how the firm had just recovered a loss theyd taken in Menlo Park.
They talked in desultory fashion before leaving to walk back to the office. Clark was talking, but
Johnson wasnt hearing. All he could think of was that hed been redeemed. The firm had recovered its
money. Maybe hed get back what he had paid and Hall would get off his back. He was starting to get
elated.
When Johnson got back to the office, he called Steve Rudolph at Dean Witter and found out that what
Clark had said was true. Morgan had joined the lawsuit after the judge ruled that Insel had engaged in fraud
and ordered his assets liquidated. Insel had had plenty of assets, and everyone got a 100 percent recovery,
plus legal fees. He decided he needed to talk to Perry.
He knocked on Perrys door and was admitted to the inner sanctum. Perry looked like he always did:
hair slicked back, black glasses, and the rest of the uniform. He turned away from his desk and crossed his
arms over his chest in the fashion of a closed mind. He stared at Johnson in his usual, cold-fish way. No
emotion to read.
Perry, I just talked to the broker at Dean Witter who had been screwed by Paul Insel the same time we
were, and he told me there was a lawsuit and the all the firms including Morgan recovered a hundred percent
of the money lost, plus legal fees.
So what? was the cold response.
Well, if the firm recovered all the money, shouldnt I get some of the money I paid? And it proves that
I was right and that Insel was just ripping people off and I didnt do anything wrong.
Well, youre right that we joined the lawsuit after the judge decided for the firms and that we did
recover money, but the rest of your whine is wrong. You made the error, you paid the loss. What happens
later is not important. As far you being proven right, it would be the first time in your life. I still dont think
you belong here, and I think youre just trouble.
Perry, this is just like making an overpayment on a credit card. I should either get a credit or a refund.
I paid a loss that the firm ultimately didnt take, so the firm is actually making money on this deal, and
thats wrong. Johnson was getting pissed at this injustice.
Phil, if you think youre being wronged, file a lawsuit. But you wont work here if you do, youre not
getting any money back, and this changes nothing. Perrys eyes took on the cold, merciless look, and he
was smiling in his sadistic way, knowing that he had posed Johnson an almost impossible choice. If Johnson
left the firm and filed a lawsuit, hed have to bear the legal cost. The loss had been between eighteen and
twenty thousand dollars, but he could easily pay more than that in legal fees. Perry knew that Johnson
wanted to stay at Morgan, and that gave Perry power to toy with him.
Youre a real prick, Perry, you know that? A real prick!
Watch the mouth. You can be fired for insubordination, asshole! Perry stood, trying to be menacing.
But, while Johnson wasnt much larger than Perry, he knew he could beat the shit out of him. They started
at each other for a few seconds as they decided what to do. Eventually, Johnson realized that if he punched
this cocksucker, hed spend the night in jail and Hall would have him prosecuted to the end of the world.
You know, Perry, its lucky that you were an REMF in the army. If youd gone to Vietnam, Im sure
you wouldve been fragged, and you wouldve deserved it! He turned on his heel and left steaming from
every place he could. He face was red, his eyes blazed, and his muscles were tense all over his body.
Johnson was surprised that there was no follow-on or action by Perry, but days passed, and they glared
at each other in the hallways and meetings, but nothing happened. At the end of the summer, he and Dianne
decided to go to the Caribbean for a couple of weeks. Prior to their departure, the Colonel had a relapse and
was near death. Johnson left immediately for Pennsylvania, leaving Dianne behind; then hed fly down to
Miami, where he planned to join her.
The Colonel was, in fact, on his last legs. He was back in the hospital. The dialysis wasnt working like
it should, and the amyloids were building up. He was almost blind, and his hearing was virtually gone. He
had a colostomy bag and had the look of death. Johnson stayed a week and then left for Miami. He met
Dianne, and then they went off to Saint Thomas and Tortola to meet the ship. At the end of the first week,
he received a radio message that his father had died, and he began to figure out how to get home for the
funeral.
The nearest airport to the ship was on Virgin Gorda, but he was on Norman Island, about twenty miles
away. The ship wasnt going to get to Virgin Gorda for three more days, so he paid a local fisherman to run
him over there. He called his brother from the Little Dix Bay Hotel and found out that the memorial service
was on Tuesday. It was now Sunday evening.
He got a flight from Virgin Gorda to Tortola and found there were no flights from there to Miami until
Monday morning, but there was a flight to San Juan, Puerto Rico. But the airline couldnt guarantee him a
seat on any flight to Philadelphia; hed have to take his chances. Johnson hated uncertainty, and here was a
situation full of it. He took the flight to San Juan. In San Juan, he found that all the flights north to Miami
or Atlanta were full, and after standing by for three of them, he realized he needed a new plan. He finally
found a flight to Miami via Houston, figuring hed connect from there. The airline, for some inexplicable
reason, wouldnt sell him just the ticket to Houston, so he had buy the whole deal. That made him hate
airlines more than ever.
The flight arrived in Houston two hours late and in the middle of a storm that closed the airport with
high winds. It was now the early hours of Monday, and he was tired and frustrated and very worried. He
was having IBS again, and he learned that its impossible to have diarrhea quietly as he drove people out
of the mens rooms. When the airport opened again, the flight took off for Miami. It had been delayed
another five hours. He arrived in Miami midmorning Monday, and of course the flight he had been hoping
for was long gone.
No one could give him a confirmed seat, so he purchased a ticket on the last flight in Monday evening
on Eastern Airlines to Philadelphia, and he was going to stand by on every flight until he got one. When it
was decent, he called his brother again to get more details on the memorial service. He found out that it was
at 11:00 a.m. Tuesday and that the body had already been cremated. Jonathan told him that their mother
was really upset that he wasnt there. Finally, at 3:00 p.m., he got on a Continental flight to Philly, which
was good, but the bad news was that it was via Houston, Atlanta, and Richmond. Hed get to Philadelphia
at 11:50 p.m. if all went well.
It was a star-crossed flighta maintenance hold in Miami for an hour, air traffic congestion in Houston
for forty minutes, and then Atlanta. It seemed as if the plane was swallowed by Hartsfield; then it needed
to be refueled, and then there were more maintenance issues that resulted in the plane being taken out of
service. They waited and waited, and flights left for Philadelphia, but for some reason, other airlines werent
honoring Continentals tickets. So, while he ran up and down the ramps looking for flights, nothing worked.
They found a plane, but the crew was over their hours of allowed flying and they were looking for a
replacement. More time passed; more IBS. It was so bad that he wasnt sure he could sit through the flight
without fouling himself. Finally, the plane was loaded. It was about 11:00 p.m. Monday night, and he hadnt
slept for almost forty-eight hours. The plane taxied in the long and endless routes at Atlanta, and then they
sat, engines running, for about forty minutes. Then the pilot came on to say that they had to return to the
gate. They taxied back and sat and sat, while some discussion went on. Finally, they were told that due to
FAA regulations and noise issues, they couldnt land in Richmond after midnight, so they would have to
stay in Atlanta.
Whenever he was in an airport, he wondered if the Marquis de Sade was still alive and working as a
furniture designer. There was nothing in an airport that was comfortable when you were wide awake, let
alone dead tired. He tried to sleep, but the airport janitorial crew had apparently decided to work only on
the floor near his gate all night. Early in the morning, as the murmur of the airport increased, he got up from
his torture rack and, stupid with sleep, staggered to the gate agent. He was told he needed to have to have
his ticket rewritten and to go to the ticketing desk, which in Atlanta is like saying, Walk from New York
to Boston, and, of course, everyone else was there, so the queue looked like a Depression-era breadline.
Continental got him on a flight leaving at seven thirty, which would get him to Philly at nine, so he
could just make it if all went well. He called his brother again, which woke him, and asked if there was any
way the memorial could be delayed till noon or one to give him more time. After he got to Philly, he was
going to have to get to Lancaster, seventy-five miles west, and that would take at least an hourprobably
longer. His brother was very nasty and said no, the service was on and it wasnt going to be delayed for
him and that he should have thought about this when he left to go on vacation. He did this all the time,
Jonathan said, putting his own pleasure in front of the familys. That was all Phil needed: a slap in the head
for failure of duty. He was so tired, he almost cried.
He went back to the gate and was in the process of killing his back in the airport chairsdid they have
some deal with chiropractors and orthopedic surgeons that made them select chairs that didnt fit the average
butt? In any case, hed checked in and was dozing when there was an announcement asking passenger
Johnson, Phillip Johnson to see the gate agent. It turned out that he had a phone call. Suspicious, he took
the phone offered by the agent. It was his mother.
Phil, where are you? she asked in a challenging tone that was usual with her and didnt indicate any
anger, frustration, or other emotion.
Im in Atlanta. Im on a Continental flight that will get to Philadelphia at nine. Then Ive rented a car
to drive to Lancaster, so I should get there in time. I might be a bit late depending on traffic. Im trying my
best to get there.
His mothers voice came through the phone as the calming shower that mothers are endowed with. I
dont want you to kill yourself getting here. No one will care. You were here before he died, and he
appreciated that, and I understand that youve been trying to get here since Sunday. Go back to the
vacationand I mean that. You have no duty to be here. If I didnt have to have this stupid service for
everyone elses sake, I wouldnt have it. Im glad its over.
The words were cold, but he understood they were rational. Shed cared for her husband and for her
mother for a long time, and shed exhausted her compassion. In the end, for the caregiver, death is a
blessingand it was, for his mother. I understand. But Ill still try, was his response.
No, she said with some force, you need to take care of yourself. Go back to the ship.
As usual, he did what his mother told him to. He was lucky he got out of Atlanta to Saint Thomas, and
he got the guys at Caribbean Helicopters to fly him to Virgin Gorda to rejoin the ship. Regardless of his
mothers blessing, though, he was still uneasy that he hadnt made the funeral. It was a sons duty to be
with his father at the beginning of the last journey; that was what was expected, and hed failed to do his
duty. He was exhausted and pissed off and deeply, deeply sad at his failure, and that guilt would bounce in
his head forever. Hed failed the Colonel in his last mission. He, Phil Johnson, was a failure, and a failure
in the eyes of his brother, who would never let him forget.
The last few days of the trip were a misery of self-recrimination and hatred. In was made worse by
Dianne. During the first week of the trip, theyd met a couple from Florida, James and Carol Dampier.
James was kind of a redneck. He drank a lot and didnt have a lot of good things to say about women. Carol
was a pretty woman with a nice figure and very bold. They were at a clothing-optional beach one time, and
most people kept their clothes on, or, at worst, the women took off their tops. Carol stripped down totally
and walked around like it meant nothing.
Dianne bonded with James quickly, since they were both scuba divers. Carol wanted to bond with
Johnson, but he managed to avoid that complication. Dianne didnt. The professional divers who took the
passengers to diving sites were tanned, young, tall, and very fit. According to several men on the ship who
were also divers, Dianne had formed a real close bond with one whose nickname was Muffy. One of the
guys had gone into the cabin of the dive boat and found the two of them locked in what anyone would call
a passion kiss.
Johnson asked Carol if she knew anything about it. He figured if she was really interested in having an
affair with him, shed be glad to dump on Dianne. He was right; Carol couldnt shut up. Apparently, Dianne
and she had discussed the whole deal one night at dinner, and Dianne had told Carol that Muffy was meeting
her at a resort at the end of the island and that they were going to spend the night together. The affair had
already been going on for most of the time they were on the ship, and theyd gotten bolder when hed left
for the attempt at Pennsylvania.
Dianne, of course, was perfectly attentive to him when he got back and had given no hintnot that
hed know what a woman having an affair would normally do. He wasnt going to have it out with her on
a ship carrying only eighty passengers; he might as well have announced it in public. Naturally, in these
situations, the husband is the last to know. Most of the ship already knew what was happening. The day
after Carol told him, which was the last day of the cruise, shed appeared with fairly big bruise on the side
of her face that she claimed was caused by a fall. Johnson knew that James had hit her for telling him about
Dianne.
The flight home was cold, very little conversation, and he snapped at her a number of times. He told
Dianne that he was tired and upset at not getting to the funeral. She accepted it, but he wondered if she
really was glad that he didnt confront her.
When they got home, the disaster continued. The water heater had blown up, and Diannes mother was
apparently incapable of using the credit card he had left for emergencies. So he immediately had to contact
the plumber and get the thing replaced. His first day back at the office, he found out that they were moving
across Market Street to the rich side of town, so he had to start packing his stuff. The only good thing was
that hed hit the jackpot.
Sciprione had arranged for him to be assigned to the investment-banking team that was working on a
company in Portland, Oregon that Morgan was taking public. He traveled with the investment bankers and
was introduced to the executives and employees as the person who would handle all their individual sales.
Every day, he got calls from friends, family, and vendors to the company who had been told they could get
stock on the offering. In the end, he was allocated forty-five thousand shares, which came with the full
underwriting commission of $1.10 per share. With the gross commissions he had from his other accounts,
he did $80,000 in gross that month and took home a check of almost $30,000.
He was feeling that maybe his luck at Morgan was turning and that he could outlast Perry. One night,
a bunch of the brokers were having drinks at the bar in the Palace called Maxfields, which had a huge
Maxfield Parrish painting behind the bar. During the joking around, a Shuman broker named Lynn Larson
dared him to come to the morning meeting in a gorilla suit. He accepted the challenge and found a costume.
Two days later, he arrived at the office in the suit except for the head. As he walked down Stevenson Street
from his parking lot, he noticed a bunch of folks outside the building. They could only be there at 5:00 a.m.
for one reason. As he walked up, he noticed money changing hands.
They all went up the elevator, and at the office, someone took his briefcase to his desk. They all walked
in with Johnson, who was now in full costume. He chose a seat at the head table right next to Hall, who
was sitting there with his mouth semiopen, a look of disbelief on his face. Here was someone being jocular
in the sacred Morgan Stanley meeting. Johnson sat down and said nothing.
Just before the meeting started, one of the institutional equity salesmen walked in and did a double take
at the sight of a gorilla at the head table. Without missing a beat, he said, Perry, are you going to introduce
your sister?
The place exploded in laughter, and Johnson looked over at Hall to see what the reaction was. Perrys
jawline was tight, and the muscle along the jawline leading to the ear was tense and bulging. He was red,
and Johnson wondered if he was more upset at being laughed at or having his sister insulted. The laughter
continued, and the moderator of the meeting in New York asked in a very stern voice if something was
funny out there. Instantly, the laughter stopped.
While the gorilla suit didnt get him in troublehe was never sure if Hall even knew it was himwhat
happened next did. Johnson realized that Hall was really a miserable human being who didnt have a lot
going for him other than a famous ancestor. He was trying to be a big man, but he was in over his head, and
his bosses in New York were beating the crap out of him daily. The office was almost out of control, and
he was providing no leadership or direction. What management there was came from within each person
and his or her individual morals and ethics. Johnson started to take Hall for granted and to dismiss him,
especially after one incident in particular. All prospective new members of the Bohemian Club had to
interview with Clark Leffing since he was its president. No one was exempt. Harry Gray was the chairman
of the board of United Technologies, one of the biggest companies in the country and a member of the Dow
Jones 30 Industrials. The previous month, Gray had been featured in Fortune magazine for his hobby of
raising tomatoes. Gray had been in the office to interview with Clark about his membership. He was leaving
right around noon, and Johnson found himself in the elevator with Hall, Gray, Leffing, and few others.
Perry introduced himself to Gray and then said, I saw the article about the tomatoes you raise.
Gray responded by saying, I wish I had more time to work on them. Its fun.
You know, theres nothing like an East Coast tomato, said Hall. The heat during the day and the
cool nights make them really luscious. California cant grow good tomatoes because its hot all the time.
He accompanied his discussion with a hand motion that resembled the grabbing of a womans butt.
Gray looked at Hall like he was a fool and then said, I think California tomatoes are better than
anything we have back east. Ive been trying to duplicate the conditions in Connecticut.
Hall look crestfallen. Hed just tried a phony compliment and had it shoved in his face in a public
humiliation he must have felt down to his shoes. For a nanosecond, Johnson felt sorry for him. Luckily, the
feeling passed quickly.
Johnson got full of himself and started to discount his enemy. Surely, with the gross he was doing and
with the investment bankers working with him, Hall had to change his opinion. Surely, Johnson had
demonstrated his fidelity and loyalty; surely, he was accepted. He was working hard and doing the right
things. He hadnt had an error or any issues. Surely, that counted for something. It didnt. But he wanted to
believe so badly that he was proving himself that he began to discount his enemys power and sense of
malevolence. Nothing had changed in Halls mind, but Johnson couldnt believe that there was no
forgiveness at Morgan Stanley. Surely, you could prove yourself worthy?
 Chapter 27
Old One-Shot
As the end of 1983 approached, Johnson looked back on a bad time. His wife was a serial adulteress, his
father had died and he couldnt get to the funeral; hed almost been fired, lost $20,000 in income, and had
failed in his physical-conditioning regimen. The ghost had appeared, and he was still there with Hall and
his band of sycophants.
Most of the time, a broker is busy with sales calls, meetings, and paperwork, so theres no time to think
ahead or be proactive, as the experts would later call it. They were mostly reactive. But at the end of the
year, things started to slow down just when Johnson needed to be the busiest, and he became reflective and
depressed. He needed the stimulation of action to avoid his tendency to give up, and now the markets started
to slow as people finished their risk taking. Halloween, Thanksgiving, Christmas, New Years; all the
parties in between came like a set of low ocean rollers. The holidays were pure agony for Phil.
The one thing that enlivened an otherwise miserable time was that Phils old friend from high school,
Bill Satsop, lived in Sacramento. Phil and Dianne had developed a pattern of exchanging Thanksgiving
dinners with Bill and his wife, Sher. This year, it was Phil and Diannes turn to go to Sacto, as it was called.
There are times when a person tells the story of his life and gradually leaves out the bad things,
concentrating on the pleasures and good things. Not Phil. He seemed to remember only his missteps,
disasters, and mistakes. Hearing his tales, one would think Johnson had accomplished nothing in his life
and had lived a life of woe like in the song A Man of Constant Sorrow. This trip would do nothing to
shake anyone of that feeling.
When they arrived at Bill and Shers, the ladies left to do some last-minute shopping, and Bill and Phil
went to visit Bills air-force buddy Vince Castell. When Johnson walked through the door, he was surprised
to see the face of Todd Galloway. Todd and Phil had served at Fort Ord together in adjoining companies.
Todd had ended up in Vietnam in the Fourth Infantry. As soon as Todd saw Johnson, he burst out, Hey,
its Old One-Shot! How are you, killer?
Johnson cringed in reaction, and he blushed. Hed never told Bill or anyone about what had inspired
the name, but now the cat was out of the bag, and there was no way he was going back in. How the fuck
do you know each other, Bill? asked Phil.
You remember Homer Jacks, the guy I roomed with at McClellan? asked Bill, referring to one of the
three air-force bases in the Sacramento area. Homer and Todd met each other in Vietnam when they
worked on some operation together.
Yeah, I moved to Sacramento when I got out of the army, and I looked up Homer, and Homer
introduced me to Bill, finished Todd. How do you and Bill know each other?
Bill jumped in. We met in a church choir in eighth grade and went to high school together, and we
made contact when I was at McClellan and Phil was at Ord, and weve been trading Thanksgivings ever
since.
Did this clown ever tell you about his lasting fame on the Monterey Peninsula?
No. Did something wild happen? responded Bill.
Todd, its still pretty raw. Id appreciate if youd just drop it, pleaded Johnson. He followed the
request with a look indicating more serious persuasion might be coming if he didnt get compliance. Todd
didnt pursue the point further. There were football games on, and they sat around, told lies, drank beer,
and talked about their careers. Bill was running some retail stores in the Old Sacramento district. Vince was
an insurance agent; Todd was a corrections officer with the state.
Later, they all went to Bills house for drinks and appetizers. They were all there, eight of themBill
and Sher; Phil and Dianne; Todd and his blond-bimbo wife, Glenna; Vince and his knockout wife, Sonia
when it happened.
Todd was in his cups, which from the look of him was his usual state; a reformed drunk can spot an
active drunk a mile away. Todd began prompting the group with comments about how Phil was the greatest
pistol shot in the army and never wasted a shot until the others were staring at Johnson, who was trying to
figure a way to crawl out of the place. It was Dianne, naturallywho didnt care for anyone elses
feelingswho broke the ice by asking him to explain what Todd was talking about. He demurred, but soon,
they were all pounding on him.
You can tell it, Phil, or I will, slurred Todd. Probably like it better if you tell it.
For some reasonit might have been the drinks, it might have been the fatigue that makes cowards of
everyone, it might have been (and most likely was) that he could take control of the group and be the center
of attention for the rest of the eveningin any case, he let his reserve down and told them.
He related to them that hed been brigade-duty officer for Second Brigade the night of 7 July, 1971,
assisted by a duty noncommissioned officer and a driver. Among the many duties each night was the
inspection of a company arms room and a mess hall. Which mess hall or arms room was kept secret and
locked in the brigade commanders safe. At some point after 2300 hours (11:00 p.m.), the duty officer
would open the safe and get the envelope containing the locations. He had between then and reveille to
inspect.
The mess hall wasnt a big deal; it was mostly making sure it was secured, clean inside, no fires left
burning, and that some hungry troops hadnt broken in for a midnight snack. The arms room was different
matter.
The fort had recently been issued the new M16 rifle. Shortly thereafter, there had been several arms
rooms broken into and rifles stolen. The weapons from the first theft had turned up in a firefight between
the Oakland Police and a group of thugs. Four dead. The weapons and ammo in the other two cases had yet
to show up, but everyone was on high alert. There had been threats by various revolutionary groups opposed
to the war and the military in general to steal the baby-killers guns and use them to kill pigs.
The army, on advice of the FBI, had increased safety protocols and went so far as to raise the weapons-
storage buildings eighteen inches off the ground. The floors were reinforced with steel plates, and high
security locks were everywhere. And, of course, there were the surprise inspections. One of the other
security measures was that all the arms rooms had been moved to buildings on access alleys across from
the company HQs. Since there was someone in every company HQ all night, every night, it was thought
that this arrangement would make it harder to hit the arms rooms.
At the appointed hour, he had opened the safe and saw that both the inspection targets were close by.
His duty driver was headed out on a field exercise in the morning, so Johnson had decided to let him sleep
and told the duty NCO he was walking up to Delta Company Third Battalion, or D-3-2, as it was called. It
was about a third of a mile.
As Johnson walked toward Third Battalion, he had to traverse Second Battalions companies. As he
passed between the arms room and company HQ of Charlie Company (C-2-2), he heard a scraping noise
from his left side. He stopped and listened. The night had been still, as the fog-shrouded Monterey nights
can be, and in the silence, he heard the noise again. It was a metal tool scraping wood.
Johnson was sure the noise was coming from the arms room, and he took a few steps past it. He saw
four feet protruding from under the building with the toes pointed up. That eliminates someone knocking
off a piece of ass! he thought. The noise repeated, this time until the sound of wood giving way under
pressure; then all was silent.
There was no way of knowing who these people were, but Johnson wasnt taking any chances. As per
regulation, his .45-caliber pistol was loaded. He drew it and pulled the slide back to rack home a round.
The metal was cold to the touch, and the precision of the metal slide seemed even colder. He was now
standing alone in a dark night with a weapon loaded and ready to take life.
At the sound of the slide, the four feet, which had been moving, stopped cold. Johnson raised the pistol,
holding it with both hands. He was scared, and with a pistol as heavy as the .45, a one-handed grip would
have been foolish. You, under the building! Come out toward your feet, and make sure I can see your
hands, he said, his voice not quite a shout but done in his best tough-guy tone. One pair of feet suddenly
pulled inward under the building; the other started moving toward him.
Johnson was in trouble. Here were two people, perhaps armed, one under the building maybe taking
sight on him, and the other was coming toward him, also with maybe a gun. He was up shit creek. His mind
was whirling as he wildly cast about for a solution. Out of the peripheral vision of his left eye, he saw a
movement and turned his head slightly.
No doubt; the other pair of feet had turned into the figure of a person silhouetted against the lights at
the ends of a barracks building and the front of Charlie Companys office. Whoever it was running away
down a slight grade to his left as fast as he could go. Johnson turned ninety degrees and yelled, Halt, or
Ill fire! he realized that he had a potentially armed suspect behind him and getting no response. Without
a moments hesitation, the night was split by the explosion of two heavy-caliber, slow-muzzle-velocity
pistol shots. The shots were barely away when, with a literal smoking gun, he turned back to the other man
standing next to the arms room, hands raised.
Dont fucking move, was the command as the .45 was leveled at the guys head. Then all hell broke
loose.
The sergeant who had charge of quarters at C-2-2 came out of the office and saw Johnson standing
there. He called out, Whats going on?
Johnson shouted over his shoulder, never taking his eyes off the person in front of him. Call the MPs,
the brigade-duty officer, your battalion commander, and your company commander, in that order. Tell them
there has been an attempted arms-room break-in, with shots fired.
Who are you? the bewildered noncom asked.
Lieutenant Phil Johnson, B-one-two, and Im the brigade-duty officer.
Without another word, the sergeant went inside to do as he was ordered.
Pistols were once called hand cannons, and that term applied to the M1911A1 .45-caliber pistol. It was
loud and unmistakable when it was fired. There were few who could sleep through its discharge. There was
a two-story barracks directly in front of where Johnson had fired, and now troops started to come out to see
what was going on. Their white T-shirts and boxers glowed iridescently in the quarter-light of the company
street. It was cold, and they were shivering in the damp darkness. Several of the sergeants who lived in the
barracks came out and were yelling at the troops to get back inside.
One of the NCOs came toward Johnson, and Phil said, Sergeant, take charge of the prisoner and take
him inside company HQ. Search him for weapons, and dont leave him until the MPs take charge. It was
obvious now that Johnson was an officer, and no one was going to argue with a loaded .45.
He heard a voice behind him say, Sergeant Ross, better call an ambulance. Theres a guy hurt here!
As the sergeant led the prisoner away, Johnson tracked his movements with the pistol. As he turned
around, he could see a figure lying in the company street and a few people standing around him. One was
kneeling down. The kneeler looked up. God damn, sir, looks like you killed him!
The first of what would turn out to be many MP cars rolled into the downhill end of the company street.
It was only about a quarter of a mile to the MP post at the main gate, so the response was fast. Now the
lights of the barracks windows, streetlights, and exit lights were joined by the blue-and-red bubblegum-
machine rack of the MPs, and the scene became surreal.
One MP got out; the driver. His pistol drawn, he crouched behind the car door. The passenger got out
with a shotgun pointed up the hill toward Johnson. The driver was now talking into the radio, calling for an
ambulance.
Another MP car arrived from the uphill side of the street and angled across the road, blocking traffic.
Then more cars arrived, and the ambulance roared up, lights going and siren at full cry. Anyone having any
hope of sleeping had it dashed. So far, the MPs had made no move toward him, and two more cars arrived,
blocking the other two sides of the scene.
Johnson was standing there, looking downhill toward the first MP car and the body, gripping the .45 in
a death grip, not realizing that the reason the MPs werent moving was that he still had the gun and they
were unsure if he was going to fire on them. A civilian car pulled up behind the uphill car, and a man got
out and walked toward the MPs. Johnson heard them calling the man sir and explaining the situation as
they saw it.
Johnson was going into shock. He couldnt process what had happened, but it was sinking in that he
had killed someone, at least one. He stood there stock-still with his eyes wide and his breath coming in
short heaves. His eyes were moist, and his throat and lips were dry as bones. He was still pointing the pistol
down toward the body ten meters downhill, beyond which were the MP car, the ambulance, and a growing
crowd.
He heard footsteps behind him, and then a deep but not unfriendly voice said to him, Lieutenant
Johnson, its Colonel Perlman. Are you OK?
Yes, sir, was all he could muster to his brigade commander.
Phil, Perlman said in the voice a father uses to calm a frightened child, Phil, we need to have you
put the weapon down. Its all over, and the MPs and the medics cant do their job with you pointing the
pistol at them.
Johnson started to realize what was going on. The .45-caliber pistol had three safeties. The first was a
lever on the left side of the slide that engaged a notch in the slide, preventing it from moving forward and
back. Since the .45 was a semi-automatic weapon, it reloaded itself after each shot by the force of the recoil.
If the slide lock was engaged, the weapon couldnt be fired. The second safety was the ability of the hammer
to be half-cocked. This way, the slide lever could be off and the weapon still safe, because it wouldnt fire
from the half-cock position. The final one was a pressure plate just under the metal tang, which curved back
from the handgrip. When the pistol was in a persons hand, the web between the thumb and index finger
depressed the plate, releasing the firing mechanism.
He had fired two shots, so there were four in the magazine, and one was in the firing chamber. Because
the slide had recoiled twice, the slide lever was disengaged and the hammer was in full cock. He was holding
the pistol with both hands, his right one gripping the top of the butt so the pressure plate was engaged. It
was a live weapon in the hands of an almost-comatose man whose finger was still on the trigger. A few
pounds of pressure, and it would fire.
As he was considering and trying to process what had happened, there was a loud, metallic noise, and
then an electronic voice came over a loudspeaker. Lieutenant Johnson, this is the provost marshal, Colonel
Desmukes. Put the weapon down now, or you will be disarmed! Johnson stiffened. He had been slowly
relaxing, and his brain was returning to his normal rationality, but now he was afraid, and he began to turn
toward the loudspeaker. Lieutenant. Do not turn. Put the weapon down, now! came the loudspeaker again.
Phil, listen to me, came Col. Perlmans gentle voice, These guys are going to shoot you if you dont
put it down. Please, for me, put it down.
Johnson was confused. He liked and trusted Col. Perlman, but he was so shocked by the situationthe
lights, the noise, and all the excitementthat he wasnt processing information or commands at anywhere
near his normal speed. In almost any other situation, hed have immediately surrendered the weapon, but
the enormity of what had happened was beyond his knowledge base and he froze.
He stopped his turn toward the provost marshal, and the prefrontal cortex overcame the lizard brains
survival impulse. He let the pistol go, and it swung around his index finger so that the barrel was now
pointing back at him. He bent down at the knees and the waist and placed the pistol on the ground. He stood
back up.
The loudspeaker crackled again. Put your hands on top of your head! Johnson complied.
The first person to reach him was Perlman, who put his arms around him and hugged him as Johnson
began to shake uncontrollably. His knees buckled for a split second before he caught himself and stood
upright. The two MPs from the uphill car approached from Johnsons right rear with .45s drawn and pointed
at him. Perlman saw there was a set of handcuffs out. Sergeant? Perlman said, do we need this? He will
be OK and will come quietly. Theres no need to handcuff him.
Sorry, sir, was the MPs response, but its standard procedure, and the provost marshal ordered me
to treat the LT like a suspect.
OK, Ill talk to the provost marshal. Phil, go with the MPs. Everything will be OK, you did the right
thing.
Johnson was beyond speech, so he nodded and felt the MPs hands pull his left arm down and then his
right, and the cold steel of the cuff clicked on his wrists with the finality of forever. Only after hed been
handcuffed did the second MP lower his pistol. The first MP did a pat down to see if there were any other
weapons and found the knife he always carried.
 He could hear Perlman and Desmukes arguing in the background, and he could see the activity around
the body downhill. With MPs at each side, he walked downhill toward the ambulance and the first MP car.
As he passed the body now semisurrounded by medics and MPs, he could see a pool of blood from under
the body, and he heard a medic say, Fuck! Those forty-fives make a mess of a body. This bastard was dead
before he hit the ground! Fuck, now I know why we use them. Johnson asked if he could have some water,
and they stopped at the ambulance. One of the medics gave him a cup of water. Then he was led to another
MP car and put in the backseat, where he sat alone.
Johnson needed to be alone. He wasnt aware of the difference between an introvert and an extrovert,
but he was, at his soul, a deep introvert. Being in society and forced to interact with large groups of people,
hed grow tired and gradually unresponsive. If he could find time to be away and alone for some period,
the length of time depending on how deep his fatigue was, he could recharge and find the strength to
reengage. He knew that others didnt understand his needs, but he was so insensitive to others feelings that
he wasnt aware of the hurt he caused by his withdrawal.
At times of great stress, he needed to be around people and to engage until hed exhausted himself, and
then he needed time alone. Now he was under probably the greatest stress of his young life, and he was
alone. His brain was spinning with emotion and a need to release it in some way. He went through denial:
it was no big deal. Then it was depression. Oh God, Ive killed someone, and Ill go to jail foreverthen
anger: Fuck them! Why am I here? I did what I had to do, and I should not be here under arrest in the back
of his fucking car. He started to quake with anger and rock back and forth in frustration.
It felt as if he was there for hours before the door opened and he saw the face of Ltc. Anderson, his
battalion commander.
Lieutenant Johnson, are you all right?
Yes, sir. Just uncomfortable with these handcuffs on and having to sit with my hands behind my back.
My shoulders are hurting.
Let me see what I can do about that, Anderson said.
Sir, whats going on? Phil asked.
Well, CID is here, said Anderson, meaning the Army Criminal Investigation Division, and theyre
looking at the evidence, but it appears that two guys were under the arms room and were trying to cut
through the bottom. They found tools under there.
Anderson straightened to attention, and Johnson could hear him say, Yes, sir. No, sir. Will do, sir,
and Johnson realized that either Perlman or, more likely, Desmukes, the provost marshal, was there.
Andersons face was replaced by that of another man hed never seen before. He was a captain in
fatigues with an MP armband. Lieutenant Johnson, Im Captain Gomez, the MP watch commander. Im
going to inform you of your legal rights. Do you understand? Johnson nodded, but Gomez said, I need to
hear you say yes or no, LT.
Yes, sir.
Gomez then removed a laminated index card from his field jacket pocket and read the statements: You
have the right to remain silent, you have the right to an attorney, and so on, in what would become familiar
to future generations from a legion of cop shows.
At the end of the recitation, Johnson said that he understood each of his rights and was left alone. He
wondered why he was being read his rights. I was the guy who did the right thing. Why are they treating
me like a criminal?
Then the solitude descended. His anger had faded, and now it was replaced by a hollow feeling of
nothingness. He began to fall into the vicious cycle of the depressant. He was a loser. He thought, I could
have just let the asshole go. I didnt have to shoot, and theyre going to nail me for firing close to the
barracks. Well, thats it, Im out of the army. Everyone will know what I did, and Ill never be free of the
fact that I shot this guy. It went on and on until he was convinced that in a few minutes, they were going to
haul him out of the car and drag him up and down Highway One.
The last thing he remembered seeing before he was driven away was the body being wheeled by on the
roller stretcher. He noticed the dead man was black and seemed really young. Then two MPs got in the
front seats, and Cpt. Gomez got in back with Johnson. In silence, they drove to the MP headquarters at the
north end of the fort.
They kept him for thirty-six hours and hammered on him to tell his story again and again. First it was
Gomez; then it was some light colonel, and then it was Desmukes, the provost marshal himself, with a
lawyer from the judge advocate generals corps (JAG), the armys lawyers. At every step, they asked him
if he wanted a lawyer, and every time, he refused.
He told the story endlessly, and he was tired, hungry, and exhausted. And when he got exhausted, he
got nasty and mean, and at the end, he was snapping at everyone and was on the edge of insubordination.
The final story was told to the deputy post commander, a one-star general named Thompson. When the
general and his aide had left and a new MP Captain whose name tag identified him as Peters came in and
started to ask the same questions as everyone else, Johnson snapped.
No more, goddamn it! Ive been here for a day and half, and Ive told everyone the same story about
a hundred times! Ive had one meal, and Im in the same uniform I had on when this whole mess started!
When am I going to get out of here? Not another question until I get something to eat and I get to go home!
Lieutenant, I can compel you to stay here and answer my questions. You may not know it, but you are
a suspect in a murder case, so if you want to do anything other than look at the inside of cell at Leavenworth,
get off your high horse and tell me what I need to know! Peters thundered. Now, sit down, and thats an
order! So Johnson repeated the whole story again, and when he was finished, Peters left, and Johnson put
his head down on the table in the interrogation room and went to sleep.
When they woke him up, he had shifted to the floor. He was stiff, sore, and cold from lying on an
unheated floor with no blanket. He was awakened by an MP Sergeant, who at least came with a cup of
coffee. After hed been up and drunk half the coffee, the sergeant told him that Ltc. Anderson and the
deputy provost marshal, Ltc. Donat, wanted to see him.
Can I go to the latrine first, and maybe shave and take a shower? I guess Im in enough trouble, and I
dont want to see the colonels until Im STRACer.
They said as soon as I woke you up, sir, so I guess they dont care if you look like youve been in the
field for a year. They want to tell you that were finished for now and you can go.
They walked to Ltc. Donats office, and Johnson walked in and came to rest eighteen inches in front of
the desk. Lieutenant Johnson, reporting as ordered, sir, he said, trying to execute a perfect salute.
At ease, LT! said Ltc. Donat. Then he got up and reached across the desk and extended his hand. In
the last two days, Ive heard your name endlessly. Its good to meet you in person.
Thank you, sir. He shook Ltc. Donats hand and then Col. Andersons. They offered him a seat, and
he declined to tell them that he was afraid that if he sat down, hed fall asleep.
Davis pushed a copy at him of the Monterey Peninsula Herald, the local paper, whose headline read,
Killing at Fort Ord. No shooting, no death; it was killing. In retrospect, that would be the high
point of the coverage. Soon, it would degenerate to murder and then to racial killing.
Because of this coverage and some other letters and communications weve gotten, your life might be
in jeopardy if we let you go to your quarters off post, said Donat. Plus, we need to have you available
quickly, so were going to confine you to the post. Both the colonels nodded in agreement.
Sir, I havent shaved or had a clean uniform for three days. I need to go home, get some sleep, clean
up, and change. One day is all I need. Then Ill be back for duty, and youll be able to reach me anytime.
Johnson, Ltc. Anderson said, youre going to be relieved of duty until this is over. I told your CO,
Captain Rockamora, this morning. You have a roommate at your apartment?
Yes, sir. Hes in the band, sir.
Ill have Sergeant Major Concertano call him and have him pack up some stuff for you. In the
meantime, youll be in the BOQ, under guard.
The rest of the time was a mess of meetings, interviews, accusations, and increasingly nasty news
coverage. Finally, he requested a lawyer because he was concerned at the direction this was taking.
The topper came when a group of Hollywood actors who were antiwar (and actually antiarmy and anti-
American) came to Monterey and set up something called the FTA Cabaret. FTA stood for Fuck the army.
For a couple of days, they trashed the army, the country in general, and him in particular. He was painted
as a murderer, a racist pig, and generally a troglodyte. There were rumors that the Monterey County DA
was going to file murder charges against Johnson because the man he killed had been a civilian. Johnson
thought it was because he was white and the guy he killed was black, and such were the times that blacks
could drink the blood of the innocents from a skull and they were given a pass on the grounds of past
discrimination.
The army finally decided that they were going to make him stand a court-martial. So, following
procedure, he was arrested at the BOQ, handcuffed, read his rights, and taken to the judge advocate
generals office, where he met his defense lawyer and the formal charges of murder were read to him. He
pleaded not guilty and was released under guard.
The trial was held in the east garrison, as far away from the demonstrators at the main gate as possible.
It lasted barely a day. In the end, he was found not guilty and released. He still couldnt go home, because
when the news of his acquittal was published, there were threats of violence. So he stayed on the fort for
another two days. Finally, the excitement was over, and the Hollywood jerks left to go somewhere else to
champion some other loser.
He finally got back to his apartment and started to pack. Hed put in a request to be transferred to
another post, and he figured with what had happened, hed be gone in a flash. He was convinced that hed
be a pariah and that hed be friendless. Once again, his looking for the worst was the wrong thing to do.
His apartment complex was filled with officers from the fort and navy officers attending either the
Defense Language Institute at the Presidio of Monterey or the Naval Postgraduate School. At the end of the
day, there was a knock on the door, and Johnson approached it carefully, holding his wicked Buck knife in
one hand.
It was the navy commander who lived next door and his wife, and as he opened the door, he saw that
out by the pool were tiki lights and a lot of other people. The complex was having a party for him. All the
military people had put it together to tell him it was OK. It was the way of military. There was bond
unspoken, perhaps, and undemonstrated, mostly, but there, strong and real. He almost cried as he saw them.
A month passed, and he was back at duty, trying to ignore the comments he heard in the restroom of
the officers club and the stares of others when he came into or left a room. Most of his brother officers
were strangely quiet and didnt engage in the ribbing that usually went on. One day, he took a phone call
from the G-1, the personnel officer for the post. He was ordered to report to the commanding general the
next day at 1400 hours, duty uniform.
He put the phone down and started to sweat. The general, a two-star named Morrison, was a real hard-
ass. Hed commanded some brigade in Vietnam in the midsixties and fought off some incredible number
of bad guys for days until he was relieved by another unit. Of the five thousand men involved, four had
received the Congressional Medal of Honor, and as one wag put it, Silver Stars rained down. This general
was known to take off his stars to stand in line and eat at some mess hall to get the lowdown, and woe
betide the company commander whose chow wasnt up to standards.
Johnson was never known as a recruiting-poster soldier. His gig line (the line formed by the side of the
shirt, the belt buckle, and zipper) was never straight. His brass was never perfectly shined; the spit shine on
his boots was always marred by a scuff or two. He figured if he was to see the general, hed better start
getting ready.
He drove to his apartment and took a set of fatigues to the cleaners, putting in a rush order with heavy
starch. He normally used medium, so given the proclivity of the cleaner, these would be as stiff as boards.
He took his best pair of Cochran jump boots and drove back to the post. The company supply sergeant was
a wizard at spit shining, and Phil figured to get him to help him shine the boots and at the same time give
him a new field jacket and hat.
Unless they were going to the field, most officers put on a freshly starched set of fatigues every day. It
was called breaking starch. Hed broken starch at dawn, and at 1300 he broke it again, getting into the heavy
starch. He could barely move, and the stiff fabric chafed his groin. He could hear the starch crackle as he
bent over to put on his boots. Then the field jacket, pistol belt, branch scarf, and hat. He walked like a
Michelin man to the car and drove to post HQ.
 At 1355, he presented himself to the sergeant major in the generals outer office. He was early, but few
people ever criticized him for that. One of the enlisted clerks got up at a signal from the sergeant major and
knocked on the generals door. That was answered with a deep bass, Come!
Sir, Lieutenant Johnson is here.
Have him come in, said the voice.
Johnson had slumped a bit since hed arrived, and now he hauled himself to his full height. He made
his back as close to ramrod as possible. Johnson, after a second of confusion, knocked and was rewarded
with, Come.
The generals office was big, with his desk on the far side from the door, a conference table on the
right, and a couch, coffee table, and chairs on the left. Johnson marched to the requisite eighteen inches in
front of the generals desk, came to a position of attention, and snapped up a parade-ground salute.
Lieutenant Johnson reporting as ordered, sir! he said in his most confident voice. But he was anything
but confident.
At ease, Lieutenant, said Morrison, who just stared at him. He stood up, extended his hand to Johnson.
Its good to finally meet you, the guy who has had this place in an uproar for the last two months. The
grip was strong and implied that it expected to be met just as strongly, so Johnson squeezed, and they stared
at each other.
Good to meet you too, General. I think Ive met every other senior officer on post during the
investigation.
The general waved him to the couch and chairs. Johnson sat on the couch, and the general sat in a well-
worn chair that was obviously his. The general had brought a file folder from his desk, which he opened
after theyd taken their seats. Johnson had his hat off and was fingering it nervously as he held it between
his legs.
Phil, the general said, surprising Johnson, as you may know, the commanding general has to review
the sentences of all general courts-martial. Your case has been so extraordinary, I decided that I wanted to
meet you and do the review in person so you understand what happened.
Yes, sir, was all he could say.
Morrison had some questions of a particular nature, and then he had Johnson tell the story again and
asked a few more questions.
Phil, I want you to know that I agree with the findings of the court. You acted appropriately and
correctly, and the army did you a favor by court-martialing you so the civilians couldnt charge you with
murder. So, well done.
Thank you, sir.
You know, Johnson, Ive been in the army for thirty-five years, and youre the first son of a bitch that
I ever knew that killed anyone with a .45! That was some good shooting in the dark, and I bet your ol heart
was just pumping like crazy!
Thank you, sir, and my heart was pumping.
Well, it was great shooting. But the army is sending you to Vietnam to get you out of the country. I
wanted to put you on the pistol range. You be a goddamned inspiration to the men! Youll get your orders
from Major Adams, the G-one, on the way out. And good job, Johnson.
After shaking hands and saluting again, Johnson left and went to see Major Adams, whose assistant, a
snotty, hatchet-faced captain named Torge, handed him his packet of orders and dismissed him.
Johnson sat his car and read the orders. He was to depart Fort Ord in seven days and was authorized
thirty days leave in route. He then was to report to Travis Air Force Base and then to Republic of Vietnam
for duty in military occupational specialty (MOS) 15B (which was military code for a general pilot).
It seemed that everyone else knew about the orders before he did, which is the way of the army, and
they all pitched in to help him get processed out, which involved signing over to someone else the property
book for the company, releasing the arms-room keys, and filling out endless forms. He got a series of shots
and a physical, and finally he signed the final form. He was out.
The final night, Galloway, Tom Dunburton, Joe Dean, and a few others said they were going to buy
him dinner at the officers club, and it would be in civilian clothes. He didnt want to go but forced himself.
 They had dinner and lot of drinks and everyone was feeling good, when the door opened and two men
entered, one young and one older. Everyone in the room came to a position of semiattention. Galloway
walked over to the older man and then went into the bar and came back with a drink. The older man started
to circulate the room, being introduced to everyone. It was strange. Johnson had no idea who this guy was,
but everyone else did. Finally, he was introduced to Johnson by Tom Dunburton.
General LarsonJohnson gave a start. Lt. Gen. Gunnar Swede Larson was the commander of the
Sixth Army, headquartered at the Presidio of San Francisco. This is, of course, Phil Johnson, and this is
his last night here before he goes to the Nam.
At this point, the younger man who had been trailing Larson turned to the group and barked, Attention
to orders! There was instant silence, and the officers came to the best imitation of attention possible for
people half drunk. The wives did something similar.
Al Rockamora, Johnsons company commander, took a slim, green box from behind him and opened
it. The younger man, who had to be Larsons aide, continued, For exceptional service and dedication, the
Army Commendation Medal is presented to Lieutenant Phillip Johnson for actions on the evening of 7 July,
1971, during which, ignoring concern for his own life, he acted to preserve valuable army property. His
actions reflect great credit on the nation The United States Army, and himself. Entered the service from
New York.
At this point, Larson pinned the green-and-white medal to the lapel of Johnsons sport coat, and Johnson
involuntarily saluted. The general returned it quickly and said, We wanted to do this on the parade ground
at graduation, but with all the press and crap, we decided to do it informally, away from prying eyes.
Congratulations, and thank you for what you did. I called your father, who served with my father in Korea,
and told him, and hes overjoyed. Good work! Now lets drink!

5
He told the story straight out. No one interrupted him, and most were spellbound. At the end, they were
sorrowful for his pain.
The drive back to Los Altos was deadly quiet until they hit the Carquinez Straits Bridge.
What I cant figure out, Phil, is why you wont tell me these things. You tell others, but not me. After
all, Im just your wife. This is the stuff were supposed to tell each other.
Ive never told anyone, Dianne. It wasnt just you, he replied, as if that was going to offer some
justification. Look, Dianne, youll never understand this, but there are parts of my life that its best you
dont know. It wont do you any good to know this stuff. He glanced over at her as they hurtled down
Interstate 680.
He realized hed missed again.
Im supposed to know everything about you. Im that of being a forgiving person, and these are things
that make you do what you do, and I need to know them. They affect the kids and me, and I need to know
so that we can predict what will happen to you. Youre putting us in danger, and I lived long enough with
my father doing this stuff. Any more secrets you want to tell me?
Johnson was exhausted from reliving the story, the drive, and the drinking, and he wasnt in the mood
to endlessly argue with someone who was only going to look at the situation from her narrow perspective.
He wanted to whack her with her fucking the scuba guy as a secret, but the kids were asleep in the backseat
and he didnt want to start what would be a violent fight. OK, was all he said.
OK? Thats all you have to say? Youre so maddening. Why cant you just tell me?
Hed had it. I dont tell you because every time I tell you something, we get in some kind of a fight,
like this, and youre always telling me that I should have told you before. Dont you understand that I
couldnt tell you earlier because I couldnt deal with the pain of remembering? Do you think that was easy
tonight? It was just ripping my guts out, and I wouldnt have done it, but the only way not to tell was to
leave.
It shouldnt hurt to tell your wife.
No, maybe it shouldnt, but have you told me everything that was embarrassing and you were ashamed
of? No, I bet you havent!
 I dont keep secrets from you, Phil, I never have. Im like a clean sheet of paper. You know
everything.
I doubt that, said Phil. People are only honest when theyre alone, so I doubt youve told me
everything. There are demons in each of us that we dont want to let out.
He could see Dianne puff up her chest before she said, I never keep anything in, and Im total honest
all the time. Im not of a lying person. I tell everything.
He almost laughed at the dishonesty of her telling him that she let it all out, when she had aborted a
child from one affair and had dragged her ass all over the British Virgin Islands with some English scuba
diver.
He been driving the car at five miles an hour over the speed limit, but as the conversation grew more
heated and uncomfortable, he had increased his speed, and now they were going about eighty, screaming
down the freeway. He couldnt get home soon enough.
 Chapter 28
Thanks for Last Night on Castro StreetLove, Sven
The year 1982 had been pretty much a disaster for Phil, and he mistakenly thought (or believed) that hed
paid his price and that things would get better. His accumulation of actual hurts wasnt enough for him; he
had to have standards higher than everyone elses. He wanted to control every aspect of everything he did,
and he beat up on himself endlessly if something slipped. Hed always expand that failure into the worst
possible scenario. It made no difference if the flaw was serious or minor; it was always Johnsons fault, and
it was always serious.
The Ghost of Christmas Past had reminded him of his failure to save Dick. There was nothing anyone
could have done to change the situation. Dick had taken off first, and the bad guys got him. Case closed?
Not for Phil. He endlessly relived that day and reflected on what he could have done or what he should
have done or might have done, and eventually, the self-talk convinced him that he was at fault and that hed
failed his friend. In actuality, it was bullshit, and the facts bore that out. But that didnt matter. He was Phil
Johnson and he was better than that, and if it happened, it had to be his fault. Being reminded of his
perceived failures of duty could, at least for a time, render him ineffective. It was a path to madness. He
was like Atlas, holding the world on his shoulders. He wasnt carrying the weight of only his real failures
past and present and mistakes past and present, but also of the mistakes of others now and in the future.
Despite all of his real and imagined shortcomings, he was succeeding and taking home checks of
$15,000 to$ 25,000. His deals with employees of private companies was continuing to add to his net worth.
His marriage and family were no worse than most. The term dysfunctional family was just becoming
popular, and from what Johnson could read, his family was dysfunctional.
He was also succeeding in one of the magic parts of the business. There are few other businesses where
someone with little educational or industry-specific training could make contact with wealthy and powerful
people as often as in the realm of the stockbroker. It wasnt easy to get to them, but if you did, it was not
only remunerative financially but gave you a contact in your Rolodex. Brokers are specifically prohibited
from revealing the names of clients to those not involved, but it was a rule recognized more by the few
people who actually obeyed it than by those who flouted it. The reality was that around the office, most
people knew who was doing business with whom, but that wasnt the issue.
It was his set of contacts that was really the value of the brokers position. A broker could use this web
of connections for the benefit of himself and other clients. People are usually eager to do favors for others;
theres a divinity in helping, even for atheists, and Johnson was always amazed at the information and help
he could get just by asking.
While making contacts was important, most were superficial. Sure, some would develop into
friendships, but most remained acquaintances, and not very close ones either. The clients didnt really
respect the broker; he was just a function. But the broker was so eager to be accepted that he took being
used as acceptance into the clients world. The superficiality of relationships, not only with clients but with
fellow brokers, was one of the conundrums of the business. The other was the wealth effect. The real trick
was for the brokers to use the contacts to make themselves rich.
Johnson had perceived that while some of his fellow brokers had very large incomes for long periods
of time, they never seemed to gain the level of net worth that would put them among the truly rich. The
problems were that the brokers income was highly cyclical since it followed the stock market.
At this point in time, most brokers had worked for ten or more years and had never seen a bull market.
There were a few people around who had started in the business after World War II and were called the
sandbox boys. They were a fading breed, and the brokers who followed were from the baby boomer
generation.
The boomers had grown up during the societal high point that had followed the war, but theyd come
of age in the great awakening that followed the years of good times. While their mothers and fathers, if they
were educated, had been exposed to hard sciences and a more liberal-arts education, the baby boomers had
been exposed to the social sciences and soft disciplines. Educational establishments reflect the tenor of their
times, and the syllabi reflected a discarding of traditions. It became important to focus on self-improvement
and finding yourself, leading to a segment of the population who couldnt fit into any occupation that
didnt focus narcissistically on itself. Johnson could never figure out why it was that so many people were
spending so much time trying to find themselves but were so spectacularly unsuccessful. It seemed a search
with no end.
One of the things that was changing with the age and experience of the brokers was moral tone. Those
who had avoided the war in Vietnam by whatever means, either luck or criminal activity, had spent a great
deal of effort justifying their behavior so that they didnt feel any guilt at allowing their fellows to suffer
and die for them. While those who didnt go covered themselves with the cape of superior moral choice,
Johnson thought most of them had conflated conscience and convenience.
Sometimes a person will make an immoral decision in isolation, but the strictures of society make
immorality hurt. In the aftermath of the war and the awakening of the 1970s, the traditional strictures of
society seemed to fall apart, and every action was justified as individual choice and not challengeable. So
it was with those who avoided the war. They didnt and wouldnt listen to those who had taken a different
course of action. That course was condemned as the product of failed theory, if not simplemindedness.
Those who didnt go found succor in the academy, which was mainly antiwar. This self-described cognitive
elite reinforced that the draft dodgers were the best and brightest and that anyone who had any brains could
and wouldve avoided the war. Of course, the professors then complained that the war was being fought by
minorities and the uneducated, not catching the irony of this position.
It would be normal if so much of society, exposed to such flawed thinking, would eventually find
endeavors allowing it to operate without constraint. Gone was the path to the ministry, since if God did
exist, the religions had rules calling for sacrifice above self, which the objectors had rejected in their
decision not to go to war. So God had to go because he rained on the self-justification parade. Wall Street
offered those of easy virtue a home, since all accounts of what happened there were subjective and not open
to objective review until long after ill-gotten money had been earned and spent, and then you had to be
really egregious to be caught. And, of course, if you were making a lot of money for the firm, it would
protect you.
Johnson had resolved to work on several of his supposed faults. He resolved to work out more and get
in shape; he resolved to spend more time with his family, to do more gross, and to take more vacations. All
of those resolutions were just that: lip service broken within weeks.
His relationship with Dianne was stable. She hadnt gotten any worse in her gathering insanity; she
talked about going to work but never did, and she was always harping on him for more money or for more
vacations, When a person is in their twenties they look at their potential life and see a straight line to the
future, when they are in their sixties they look back at life and the straight path most often resembles a
drunkards walk. In one of the events that make life move in a serpentine manner one of the accounts
Johnson inherited from De Santi provided a change in direction of his business that would be dramatic if
slow in development.
There is a general belief that the sun shines in California all the time and that there are few periods of
bad weather, but like all myths, it has some truth but not much. In the late winter in San Francisco, the
storms can roll in endless waves of high winds, huge rainfalls, and dark skies. During most of the year, the
sun is out and the storm drains and channels fill with leaves and junk, so when the rain comes, flooding
occurs. Driving in the rain is incredibly chancy as visibility is reduced to nothing, but the traffic does not
slow down.
He was pounding up the Bayshore Freeway one February morning with his visibility reduced to the
distance of the hood ornament, the wipers running full blast but losing, and the defroster trying its heart out
to keep the windshield clear. There was so much traffic and spray from other cars that he wasnt spending
any time looking in the rearview mirrorso he didnt see the Highway Patrol car behind him until the
bubblegum-machine lights went on.
There was no place to pull over; he was in the far left lane, and there was no shoulder of any size. He
was going to have to move across all four lanes of racing traffic. As he hit the right turn signal, the
loudspeaker on the CHP car boomed out, Maintain your speed and lane. Theres a wide shoulder a mile
ahead. A minute later, the shoulder appeared, and Johnson turned in and hit the brakes to stop within its
small footprint. All over the freeway, the usual reactions to cops were happening. Those who were actually
ashamed that they were speeding even though everyone else was doing it slowed down at the sight of a cop
doing his duty; those who didnt give a shit sped up, figuring the local cop was busy, so they had less chance
of a ticket.
Johnson sat in the car and got the registration and his license out and then placed his hands on the upper
portion of the steering wheel so the officer could see he had no weapon. The cop made no movement to get
out of his car, and it was against the law for the motorist to get out.
Finally, the loudspeaker came on again. Get out of the car and come around to the trunk with your
hands in the air! What the fuck was this about? He complied. He had his raincoat on but no hat, so he
gathered the coat together and stepped out. As he did, he heard the traffic reporter on KCBS tell everyone
that there was a slowdown on the Bayshore just past the Candlestick Park exit due to some police action.
That would be him.
He stood facing the CHP car and buttoned his coat and turned up the collar, although he had never
understood the reason for that. Without a hat, all it did was funnel water down your neck. He arrived at the
back of his car, and the loud hailer crackled again. Turn around, face the car. Place your hands on the trunk
and spread your legs! This was starting to piss him off.
Now he was standing at the back of his car in the position assumed by a drug dealer, getting splashed
by speeding cars, with rain pelting down on his head and making a beeline for every stitch of dry clothing
on his body. He could feel the water soaking his socks and shoes. And he stood, and nothing happened. No
frisking, no further instructions by the disembodied voice from the car.
Hed had enough. He was wet and getting wetter. He was cold and getting colder. The worst hed done
was speed, and this treatment was excessive for a misdemeanor. He turned and faced the CHP car. Officer,
I dont know what I did to deserve this, but either arrest me, charge me, or whatever. But lets get out of
the rain! He knew that what he was doing was dangerous. If the officer was deciding on course of action,
then Johnsons aggressiveness would drive him to the most severe. If he was convinced that Johnson was
a hardened criminal, it could get him killed.
The door of the CHP car opened. A tall officer unfolded himself and stood by the open door, clad in a
yellow rain slicker with the badge on the front. His hat was covered by a clear plastic rain guard. He looked
huge in the semidarkness and the momentary flashes of light of the passing cars and the blue and reds on
his car. He walked forward, and Johnson saw to his relief that he didnt have his weapon out or have a ticket
in his hand. He came up in front of him, towering a good six inches over Johnsons five-foot-nine frame.
You dont remember me, do you, Mr. Johnson?
No, officer, I dont know who you are. Am I supposed to? Water continued to flow down his back
under his suit coat, shirt, and T-shirt and finally down the crack of his ass, where it was really cold.
My name is Carl Sewakski, and when we knew each other, you were Lieutenant Johnson at C-1-2 at
Fort Ord. I was one of your drill sergeants, and you were merciless in making fun of me when I told you
that I was going to be a CHP officer. Johnson was getting a bad feeling about this. First, the Ghost of
Christmas Past, and now the spirit of drill sergeants of the distant mist. What next, the parents of the kid
hed killed at Ord? Was he doomed to be haunted by his sins?
Good to see that you made it happen, Carl. Can we get out of the rain? asked the now wet-chicken-
looking Johnson.
Its Officer Sewakski, Mister Johnson, Carl said, emphasizing that the bottom rail was on top now.
I did have you speeding and making an illegal lane change back there, but when I ran your plate, I couldnt
believe it was you! What luck to catch one of my tormentors! He said, laughing.
Johnson hung his head a bit because it made the water run off his head, and also out of shame for the
jokes hed played on the sergeant.
Im not going to give you a ticket. I think you have suffered enough both for the traffic offense and
for your past. Besides, these other yahoos are doing worse things as we stand here. Just be careful. They
shook hands, and each walked back to their cars. Im at the Redwood City office. Give me a call, we can
have a beer. They got rolling as the same time, and Carl turned used the siren to open a gap in the traffic
for them both to enter the speedway. As Carl peeled off for the next exit, the loudspeaker erupted once
more. Have a good day, LT.
Johnson got to the office late, wet, pissed, worried, angry, ashamed, feeling foolish, and out of control.
Everyone asked him what had happened, and one of the guys gave him a towel from his gym bag so he
could dry off. As he told the story, everyone was howling in laughter. Even the Prick thought it was funny,
and Joe McLaughlin, the class clown on the institutional desk, started repeating it over the phone to his
clients. So Johnsons infamy was now known by all.
About two hours after hed arrived, he noticed that Caryn Sauerwine had gotten flowers from either a
lover or for her birthday, and a brilliant, if malicious, idea hit him. He got out the phone book and looked
for a florist located on Castro Street, the heart of the gay community. In short order, hed ordered a bouquet
of flowers that the obviously gay florist had told him were perfect for sending to a lover after a wonderful
night.
The next morning, on the front desk of the Redwood City CHP office was a large, multicolored display
of flowers addressed to Carl Sewakski, saying, Thanks for the wonderful time last night at the I-Beam
a very well-known gay barLove, Sven, with several Xs and Os signifying kisses and hugs. It made
Johnson smile for a week.
Johnson was doing well, but as he did, he worried. While he was doing more and more gross
commission, others were doing more than he was, and they were growing their income faster. It appeared
that Perry had overcome his recruiting problems, and he was bringing in some new brokers. Every
December, Perry told everyone they needed to write a plan for the next year, and some actually did it.
Johnson did it because he just knew that if he didnt have a prepared document, Perry would of course ask
him for it, and if it didnt exist, there would be trouble.
Perry had gone around the office at the beginning of the year, asking each person what his or her
business-plan forecast was for gross commissions. Most everyone just made up some bullshit number,
which Perry dutifully wrote down. Johnson guessed that hed transmit the crap to New York, who would
laugh, shake their heads, and have their belief reinforced that Perrys management was asinine.
While Perry was doing his rounds, he walked up to one of the older brokers who was very uptight and
old fashioned and still wore his hair in a flattop. Hugh, what do you think youll do for gross this year?
Hugh looked up with an irritated look that said he didnt welcome this crap. I dont know, Perry. Two
years ago, I did two hundred and seventy-five thousand; last year I did two hundred and seventy-five
thousand. So I expect Ill do two seventy-five this year.
Im going to put you down for three hundred thousand for this year, said Perry. This was supposed
to be a form of motivation.
Put down whatever you want, Perry; Im going to do two seventy-five, said Hugh with a touch of
anger in his voice and a tone of dismissal.
Perry stood there for a second after the rebuke, looking like a lost soul. In the end, he walked away with
his crocodile smile on his stupid face.
Perry had somehow recruited two brokers named Greg Easton and Peter Vaughn. They were youngish
and in their brief time at Morgan had enjoyed tremendous increases in gross commissions. Vaughn was the
best cold caller Johnson had ever seen. On more than one occasion, hed made a cold call to the largest
shareholder of some company that Morgan Stanley was interested in trading and come away with fifty
thousand shares or even more. It really pissed Johnson off, because hed called the same person, with no
success.
Theyd told Perry they were going to do a million each. A million was an astounding number. It meant
each of them would take home at least $400,000! Jealousy and covetousness were two of the seven deadly
sins, and when Johnson heard those numbers, he committed both. All that day, he mulled the number in his
head: A million. A million fucking dollars! He wondered how they could do it. While the markets were
getting better, trading volume was still low, and the general public was still not embracing the markets. He
thought they must have some secret. Johnson thought for a few minutes that hed humble himself and go
to them and beg to be let in on the method. His ego saved him.
 It turned out there was no secret sauce. Vaughn was a great salesman but dumb as a box of rocks, and
knew it. Easton was the brains of the outfit; he wasnt a good salesman but had that tremendously eager
and intense mode about him that demonstrated to people that he cared. No; there was no secret method. But
there was a secret dishonesty.
The reason for Perrys recruiting success was that Morgan Stanley had finished its experiment with
retail brokers, and in their way, they didnt share the new direction with everyone; just the elite. Morgan
Stanley had decided that the East Coast method was the one they would adopt firm wide.
On the West Coast, a broker doing $500,000 or more in one of the wire-house firms like Merrill or
Dean Witter had a private office, at worst sharing an assistant with another broker. They were the kings of
the office, and all the perks flowed to them. In the East Coast model, there were few private offices; there
might be dedicated assistants, but perks didnt flow, and the higher-sales brokers were princes rather than
kings. This was the environment Morgan was bringing to the West Coast, and because it was such a
departure, they needed to hire a different kind of broker. The brokers who fit with the new model would
have the benefit of the power of Morgans name, and Morgan would drive business to this new elite.
Johnson saw the system at work firsthand. Hed been prospecting the chairman of the board of a small
public company in Monterey. Perry had installed a computer for everyone to register their prospects on,
and everyone was supposed to check the database before they called. The chairman called in one day to ask
a question about doing business. Johnson thought that for his own protection (he was still very nave about
this stuff), he should register the contact. Later that day, he was summoned to Perrys fun house and told
that the chairman had been assigned to a new broker in the office named Rick Sluter.
Perry had given the assignment to Sluter before hed talked to Johnson, and when Sluter called the
chairman, he said that he wanted Johnson. Sluter the ass-kisser told Perry, and Perry called the fellow to
reinforce that Sluter was the man. The client again asked for Johnson and told Perry that if he couldnt do
business with Johnson, hed take his business elsewhere. Perry wished him luck.
Ive assigned the guy in Monterey to Sluter, said Perry. His heart must have been racing with the
chance to torment Johnson once more.
Perry, you said the system was that if we registered a prospect that everyone else would be waved off.
I registered the prospect. Why is Sluter, who, to the best of my knowledge, has never even talked to the
guys getting the account?
Because I say so.
Ah, the kings ultimate reason, the refuge of small minds and tyrants, Johnson shot back.
As Ive said before, Johnson, if you dont like it, you can leave. And dont let the door hit you in the
ass on the way out.
Perry, youre a Princeton man, right?
Yale.
OK, good. I wanted to make sure so I could check and see if that course you took to be a prick is
available by correspondence. You must have passed with flying colors!
Another way the new system screwed people was in the area of syndicate. When Morgan was leading
an underwriting (and Morgan always led any underwriting it was in), it got the lions share of the stock and
it could allocate it as it wished. As Johnson had discovered at Dean Witter, selling syndicate stock could be
a godsend. Over time, a broker developed an index calculated from his gross commissions, the amount of
syndicate he did, if he actually sold all the stock hed asked for, and other factors.
At Morgan Stanley, there was some deal almost weekly, but not all of them were equal. For every deal
in great demand (or hot, in broker speak), there were ten that no one cared about. The way the system
was supposed to work was if the broker sold shares in the bad deals, the syndicate managers would reward
those brokers with stock on the hotter deals.
Lynn Larson had developed a relationship with two money managers who took a lot of stock in every
Morgan deal. They never sold the shares Morgan gave them right after the offering (a practice called
flipping). Shares that are flipped create downward pressure on the stock price, and that isnt good. These
deals should have helped Lynns syndicate index explode upward. Lynns gross had been growing
exponentially, and he was one of the biggest producers in the office.
 After the new two-part system went into effect, Lynn would get all the stock he wanted on the sloppy
deals, but suddenly, on the hot deals, he was getting cut back at least 50 percent and the newer brokers
being hired under the Morgan Stanley system were getting all the stock they could handle. This was, of
course, curious, since the new brokers didnt have the accounts to take all the stock. So the mystery was,
what they were doing with it?
One day, Lynn asked Phil to go for a walk. Phil, Lynn asked after they left the building, are you
finding that your syndicate allotments are getting smaller on the good deals?
Yes, I am. The other day when Magnuson Computer went public, I was in for ten thousand shares,
and I got zip.
Same thing happened to me on Magnuson and the software company before that. You know I have a
couple of accounts that take all the stock I can get on any offering, and now Im getting screwed on the best
ones. They walked a bit and Lynn continued, Do you think the demand is that much higher? I mean, Ive
gotten to know Tom Saunders in syndicate pretty well, and he tells me what Im going to get. On Magnuson,
he told me fifty thousand shares, and I ended up getting five thousand.
Im not sure about whats happening, but little Sluter, Hayes, Vaughan, Dixon, Charles, and that
asshole Davinski got a lot of stock, Johnson replied, rattling off the names of the new brokers who had
joined the office. I wonder if that prick Hall is reassigning stock to his pet brokers?
And so it went, with business rightly theirs being stripped away to the new first-class citizens of the
world, and they had no redress. It was becoming obvious that the Shuman people were being pushed out.
Apparently, Perry didnt have the balls or the grounds to fire them, so he hit them where they lived: in the
pocket. Brokers would talk about leaving, but few did. They just took the drubbing, just as the firms knew
they would. To make it worse, the oligarchy of Wall Street retail firms got together and started to agree on
rules about brokers leaving one firm for another, and it was not to make it easier. The firms were actually
suing brokers who left to recover the accounts, and in one extreme case, Bache actually brought criminal-
theft charges against one of theirs.
So now, Morgan was dividing their brokers into favored and unfavored classes, signaling to the
unfavored that they should leave because their ability to do business would be restricted. Of course, if they
left, Morgan would do everything in its power to make sure the brokers clients stayed at the firm. So,
leaving was to risk death.
With the results of his taping and the other signs, like the dual-class structure and open favoritism, it
should have been obvious even to the great denier Phil Johnson that there was a big change coming. All the
signs were there, and he should have been preparing an escape route. But he didnt. He was being romantic,
and it was one of the things that had hampered him all his life. He looked for perfection, and it was always
around the next corner. In the army, the flaws of Officer Training School were OK because when he got to
the real army, all positives hed dreamed existed would be there. Then the modified reality of the training
company at Fort Ord was just a temporary thing. There was a real army waiting in a mainline unit. He was
never really sure what the characteristics of the ideal place were, but he knew it was there, just around the
bend.
He did the same in the brokerage industry. Surely, the stupid rules and the arbitrariness of the training
program didnt represent the exciting industry hed heard about. The grinding sameness of daily existence
at Dean Witter was surely not the real industry where the broker was revered for his sagaciousness and skill
and where clients beat a path to the door of the best. Surely, the crap at Morgan Stanley was just a stepping
stone to the rarefied air breathed by the captains of finance.
One of the lessons hed learn was that the romance of what you sought wasnt there and never had been
and never would be. It was an illusion created to make the daily frustrations of life bearable. There was no
perfect world in the brokerage industry based on merit and hard work. It didnt exist there, and it didnt
exist in the army or any other field. Every company or industry was affected by the combination of the petty
actions and beliefs of others. Sacrifice above self for a profit-making company was a fools game, because
it marked you as a person whose very sacrifice was to be used to keep you a second-class citizen.
But Phil Johnson was going to make it different. He was different, and he had higher standards. Let
other piss and moan. He was going to show them. Surely, the stories hed read about Bob Baldwin, the
now-retired president of Morgan and Phillip Fisher, the new president, were evidence of Johnsons belief.
Theyd worked hard to overcomeFisher was a cripple, for Gods sakeand theyd succeeded by being
smart, tough, and working long, hard hours. Johnson was smartnot as smart as they were, of course, since
any accolade he gave himself had to subordinated to those for others. But he worked hard; he was tough.
So he should succeed.
Johnson was missing a few pieces mostly because he ignored them as not relevant. First, he wasnt a
political player. The twists and turns of political maneuvering sickened him and he refused to play, and in
that, he denied the fact that most successful people got to where they were at least in part by being good
politicians. Second, he couldnt conceive that there could be people so lacking in basic human emotion that
they would make a conscious decision to rip off one group to promote another for the sole reason of boosting
their own reputations. Finally, hed never mastered Kiplings line from If: If you can bear to hear the
truth youve spoken twisted by knaves to make a trap for fools. Johnson told the truth as he saw it. He was
unafraid of the truth and was outspoken. He wouldnt cognize that there was another version of the truth
than his, and in the brokerage industry, truth was a relative thing. There were no absolutes. So his outspoken
need to communicate and speak his truth destroyed any political leverage he might have had and made his
statements reasons for others to mark him as dangerous and twist his words to their own advantage.
The year wound on in the usual boring way. It was shaping up to be his best year ever in gross
commissions, and he was developing an all-new business. When De Santi had left Morgan, he gave Johnson
an account with the Northern Cheyenne Tribe in Montana. Johnson had visited the tribe twice at their tribal
headquarters in Lame Deer. It was an all-new experience for him. Like most Americans, all he knew about
Indians hed learned by watching John Wayne movies. This was a minority population that few cared or
even knew about.
Johnson felt an instant bond with the Cheyenne. They were dirt poor but had a dignity and presence
about them that transcended the poverty. It wasnt the typical trip to a client; it took two or three days
flying first to Seattle, then to Billings on a turboprop, and then a drive of 130 miles to the reservation.
During the drive, you had to pass through the Crow reservation and their capital of Crow Agency. The first
impression of Crow Agency was, OK, Ive seen the garbage dumpwheres the town? It also took a person
by the Custer battlefield, which was being renamed the Little Bighorn Battlefield. There was no hotel on
the reservation, so you had to reverse the whole process at the end of the day, and driving those lonely
Montana roads at night was scary and dangerous with the drunken Crow and the odd buffalo or cow on the
road.
The account had started off with five million dollars. In June of 1983, he was asked to come to the
reservation and give some advice on some financial matters. As he was to find out, nothing was what it
looked like with a tribal deal. It turned out that Arco had some development rights to coal and other minerals
that had been granted years before by the Bureau of Indian Affairs without the tribes knowledge. The tribe
now wanted to end the deal with Arco, because it restricted their ability to deal with the minerals as they
wished.
He was sitting in the meeting with the tribes inside and outside legal counsel, several members of the
tribal council, and the representatives of Arco. Arco didnt want to give up the control of a valuable
resource. They argued, quite correctly, that theyd been granted a contract by the federal agency responsible
for the disposition of Indian tribal resources. The tribe was, of course, of the opinion that the contract wasnt
valid. Johnson didnt understand why he was there; the discussion was over his head. As he sat there
listening to endless lawyer talk, he idly leafed through a book on Indian law.
At one of the breaks, he asked the tribes lawyer some questions. Cal, the tribe was formed by a treaty
with the United States, right?
Yes, and it was ratified and signed by the president, was Cals reply.
So the tribes a sovereign entity?
True. But sovereignty doesnt mean the same thing for a tribe that it does for a state or a nation,
replied Cal.
 Right; in this book under Cherokee Nation, it says its a limited sovereignty, but heres the point. If
the tribe is sovereign, then it makes its own lawswhich are subordinate to the federal law but superior to
state law, right?
Go on.
Well, the BIA granted the contract to Arco, but the control of the exploitation is under state law. But
state law does not apply. Its the tribes law that governs the extraction. If thats true, then Arco has a
worthless contract because they cant extract anything without tribal approval, and the tribe wont give
approval, because it doesnt have a body of law to govern extraction. In that case, Arcos rights are
worthless and nonenforceable. But theyve been holding up the tribes rights to develop its own reservation
under the self-determination policy of the federal government.
There are a few flaws in your theory, but its sound so far. How do we exploit your idea?
Well, we tell Arco that were going to sue them on the grounds of denying the tribe the right to gain
value and fraud in holding down the value. We will tie them up in federal court forever unless they pay us
to go away.
Cal pulled at his chin a bit, staring at the floor while obviously thinking about Phils idea. Lets go
back in and talk to them for a bit until lunch. Then we can talk to Steve and the council to see if they want
to try this approach.
The outside counsel didnt think the idea was going to work from the standpoint of litigation but was
willing to bluff Arco because, as he said, Arcos lawyers probably didnt understand Indian law well enough
to see the flaws.
In the end, it was easy beyond belief. The lawyers decided to throw Johnson to the wolves and let him
make the proposal. Johnson got ready, and when he was signaled, he basically told Arco that they were
going to spend the rest of the century in court and they would suffer more and more damage, like they had
with the uranium pollution at the Laguna Pueblo in New Mexico.
The Arco executives looked startled and then apprehensive. They huddled and then announced they
would be back in the morning with an answer, and left.
One of the tribes lawyers made a joke about Johnson clearing the room and being an asshole. To which
Burt Medicine Bull, one of the councilmen, replied, Yes, but hes our asshole! There was general
agreement that he was an asshole.
The next day, the Arco guys returned and the talks began again, but they were different. One of the
Arco guys spent a lot of time justifying how theyd gotten the contract but also maintaining that they would
be the last to deny the tribe its right of self-determination. Then, with little more preamble, he said, Were
willing to void the contract if we can be guaranteed that we wont be litigated.
There was stunned silence from the Cheyenne side. No one had really thought the bluff would work,
and no one had any response except Johnson, who at this point was sweating. Hed won. But he was going
to try to push it a bit further. Without checking with anyone else, he said, I think we can reach an agreement
not to litigate. But your improper control of the minerals has held down the value the tribe could have gotten
if the contract had been done properly, so I think Arco should pay the tribe for the damages.
The intake of breath was loud, but it was all from the Cheyenne side; he was acting without prior
consultation. If it worked, hed be a hero, but if Arco balked, he was done. Ive done some work on the
value of the coal reserves, then and now, and I think Arco should give the tribe the difference, which would
be about twenty million dollars.
The Arco guys blinked, coughed, and whispered to each other. The senior guy cleared his throat and
looked uncomfortable before saying Nine million. Theyd been expecting this. It took less than five
minutes before they all shook hands on eleven million dollars.
When the council found out, Johnson was the toast of the reservation, but he felt uncomfortable in the
glory. As soon as he could, he left and drove back to Billings. Five days later, he got a call from the
treasurers office at Arco asking for instructions to wire the money to the Cheyennes account.
Talk of what was now called the Arco showdown spread like wildfire, and he was getting calls from
tribes and tribal organizations all over the country. Hed be coming back from the bathroom, and his
assistant would call out, Phil, Ruby Big Medicine is on the phone! to the general chuckles of the other
brokers.
He was getting requests to speak at various conferences and before governmental agencies, but he knew
that he needed Morgans approval. He asked but was consistently denied, so he just told those requesting
him to speak that he could only do it if he wasnt identified as being with Morgan Stanley. He was acting
outside the law, but he knew that he was sitting on a goldmine, and he figured it was easier to apologize
than to continue to ask the nonresponsive Morgan Stanley lawyers, who at this point told him that only
partners (managing directors in Morgan-speak) were allowed to speak publicly. They sniffed, Of course,
youre not a managing director. What he did was one of those petty acts of defiance that makes life livable.
The year was also marked by two other incidents of some importance. The first was that Morgan Stanley
was to move its office from 595 Market. The building itself was adequate, but anything south of Market
had a not-so-faint patina of sleaziness. The new building was north of Market, near the foot of California
Street. It was a better building and an address that better fitted Morgan Stanleys inflated opinion of itself.
The other change was that he and Dianne had decided to move from Los Altos.
Moving a brokerage house office is a difficult process; there are lots of moving parts, and it must be
done so that the ability to serve clients is not impaired. At the end of the move, the office had gone from a
smaller bullpen to a larger one at a better location. Sure, there was more room and a better set of facilities,
but it was the same deal. However, Perrys office was further away; the investment bankers had finally got
the separation they wanted, as did the institutional people.
As much as Johnson hated Perry, he had to admit the asshole handled the move well. It had started
Friday, and on Monday, everyone arrived to find the contents of their old desks stacked up neatly beside
their new ones. All the phones worked, as did the Quotron machines. Twice a day, people came through
with carts to pick up the empty boxes. It took a while for the brokers to learn all the important stuff, like
where the coffee machines were, and to figure out the sight lines from their desks to the babes, but the more
expansive space actually made it easier to see everything.
The new space even had a workout room with a changing room/bathroom in the rear. The bathrooms
were larger, but the windows had less of a view. In the end, no one cared about the fanciness, because
clients very rarely came to the office, so it existed as a monument to Morgans ego. Charles Schwab had
maintained its office south of Market, which was consistent with its low-cost image, but Morgan had to
have the best addresswhich, in microcosm, was the existential difference. Brokerage was becoming a
commodity, and in all commodity offerings, the marginal player controls the direction of the price. Schwab
was that marginal player. But the genius of Charlie Schwabs vision wouldnt be seen from the lofty heights
of Morgans new offices.
Johnson was getting tired of the drive up the Bayshore Freeway. It was a pain, and he and Dianne had
gotten bitten by the real-estate bug. As the inflation of the 1970s waned, real estate nationally had slowed
its straight-up trajectory, but not in Northern California. Houses werent rising at 3 percent a month and
longer, but they were going up a solid 1 percent, and that was with punishingly high interest rates. If
mortgage rates fell, the boom would be on. There was less and less land to build on as the final arboreal
reminders of the Silicon Valley were paved over. Wealth was being created in a real sense rather than in
the illusionary inflation method. People were moving to California in huge numbers, and a good many were
highly educated and highly paid. This turned into demand for houses, cars, and all the accoutrements of the
good life.
The result of all the growth was that roads to and from San Francisco were crowded all the time, and
Johnson was finding himself being late to the office more and more. He and Dianne were convinced their
small house across from the high school wasnt going to appreciate and that the relatively less expensive
houses on the east side of the bay were better values. Those residing north of Stanford University and Palo
Alto are considered to live on the Peninsula. South of Palo Alto all the way to Gilroy was considered the
South Bay, and usually, the individual cities and towns werent even identified. Marin was the area north
of the Golden Gate, and everything on the east end of the Bay and Richmond-San Rafael Bridges was the
East Bay.
 The Johnsons decided to move to a town called Lafayette. To get home from work, hed have to cross
the Bay Bridge from San Francisco and go up a ladder of freeways and through the Caldecott Tunnel. It
actually took less time than driving to Los Altos even though the trip was 25 percent longer and passed
through two natural chokepoints.
The move brought out the worst in Dianne. She insisted that she be given total responsibility to find the
house and to decorate it, saying that he never gave her any responsibility and that after all, she and the kids
were going to spend the most time there, so she should be able to create her own environment. In the back
of his mind, he knew it was the wrong thing to do, but he gave in just to avoid the fight. He figured, after
all, that he was ultimately in control since hed have to arrange the financing. He should have taken the
fight. The result was worse than hed ever imagined.
It started the first weekend after theyd decided to move. During the week, Dianne had been in the East
Bay every day and by Friday had assembled a list of houses to look atlike twenty. She insisted that they
all had to be seen that weekend, since shed been assured by the real-estate agents that they were great
bargains and would be gone by Monday. So, as the dutiful husband, he got up early on Saturday and drove
to the East Bay.
Johnson realized immediately why so many agents were women. He watched as Dianne fell for every
sales trick, lapping it up like a dog at water. He was amused as the agent used a presumptive close like,
Im sure that you agree that the kitchen will be the center of the house, so we need to make sure the kitchen
is well done. Diannes head would bob obediently, and the agent would race on to the next, agreement
building momentum toward the sale.
They got into the agents car to visit the houses. Johnson watched clinically as she captured them in her
car. If customers went in their own cars, they had freedom to end the sales process. So they drove and drove,
and the pattern was interesting.
Of the twenty houses Dianne and the agent, Stephanie, had identified, three were already off the market.
Stephanie took the Johnsons on a tour that had an obvious destination. She started with the least-attractive
house and was careful that the house Stephanie wanted them to buy was visited on both Saturday and
Sunday. It was, of course, one of the biggest and most expensive. Commission salespeople are all cut from
the same cloth.
Frankly, Johnson could remember at best three of the houses: the least attractive, the most, and one
with a spectacular view but also older and a bit long in the tooth. Dianne, of course, whose memory was a
sieve, expected him to have encyclopedic knowledge of each. What did you think of the first house on
Saturday?
Where was that one?
It was the kind of cream-colored one with the tile floor in the kitchen and the flat roof.
Where was it? he asked.
Dont you remember? It was the first one on Saturday, and it was near a park. You know I dont have
your memory for details. He was starting to have some faint memory. He hadnt been paying much
attention, and several were near parks.
I wasnt impressed, he said, using a noncommittal dodge that he hoped wouldnt engender another
request for details. It was a vain hope.
What didnt you like about it? was the response.
And so it went through all seventeen houses. He lied about his memory of all of them. After about the
third house, the details had all blended together, which was the object of the exercise from the agents point
of view. Of the list, there were several that would invoke strong negative impressions; the customer would
eliminate them immediately, and there were at most two that would inspire the opposite reaction.
He was so tired by Sunday night that he was ready to just give in and let Stephanie and Dianne make
the decision, which of course was another object of the sales procedure. Dianne was really excited about
the move and pestered him endlessly about the houses, but as the week passed, with the pressures of his
daily grind, the impressions of the houses faded.
She started in with her detail-girl mode. What do you want in the house?
 I just need a bedroom to sleep in and a place to work on my carpentry projects. Hed learned some
of the basics from his father, but he wasnt good enough for really fine work, as he lacked patience and
detail orientation. He couldnt focus for long on the details; his mind would wander to some other concern
that was more important, and his carpentry would suffer.
You have to help me, Phil! This is going to be our house, and I need to know what you want that will
make you happy. I cant do this alone and take care of the kids too. You get to take a break and go to your
office, but Im here all the time, and I dont need to have you unhappy at the new house. This was a
familiar trope of hersthat somehow working for Perry Hall was a five-day-a-week vacation. Suddenly,
what she had demanded total control of was now their house, which was a way of denying her own
responsibility.
You think I get any kind of break? I need the weekends to relax and refresh myself so that I have the
strength to go to work on Monday. Women buy houses; men finance them. He could see by the narrowing
of her eyes and the set of her chin that this last had pissed her off, so he rushed on to prevent a crisis and
made one of the worst mistakes of his life. Look, Id like to have a place to do projects that need to be
done. It would be nice to have a library to get all the books on display, and perhaps a den where I could
work on stuff and write. Hed started to think he could write professionally. Thats all I really need.
Youll do a good job. Just go and do it. It was a stupid decision made in fatigue. He could have gone back
on it, but hed made a decision, and he prided himself that he stuck with his decisions regardless of
consequence. The time for reflection was before the decision, not afterward. Once made, the decision was
final.
Dianne went nuts on the house. She drove back and forth to the East Bay every day, and finally the
next weekend, she announced she was down to five houses. Johnson said to get it to three. Of the three
houses, the one that Dianne liked best was too expensive, so they settled on the number-two choice. It was
a new house in a town called Lafayette. The builder was a local guy rumored to be in financial trouble. The
house was on a steep hill terraced in the rear, and the lots descent in the front was steep. The driveway was
a steep incline to a flat area in front of the garage doors. Getting into the right-hand garage space would be
tricky. It was a multilevel deal, and no matter what you did, you had to climb a set of stairs to get to the
living areas.
Diannes taste for extravagance and ostentation took control. She carpeted every area in deep forest
green. The carpet dominated the entire house and determined everything else they did. That gave her the
excuse to buy couches and chairs, and he found he had to resist her, as her taste in furniture was decidedly
low class; some of it looked cheap and was cheaply built.
The adobe clay of the East Bay had lain in place for thousands of years, and if the geological record
were read, it wouldve shown that about every century, the periodic droughts were followed by torrential
rains. The winter of 198283 was the season the drought ended. The high-pressure area between California
and Hawaii directed warm, moist air up the coast, and it crashed into California like a freight train. It came
with winds averaging thirty miles per hour but gusting to forty-five or fifty. It was a full gale that went on
and on. The rain wasnt heavy all the time, but it rained every day for at least thirty days, and when it really
came down, it was about four inches a day. There was widespread flooding; the ground was so saturated
that it began to move. Streams dry for decades began to reassert themselves, springing from hillsides
including at the new house.
The Johnsons moved on the only weekend between October 1983 and March 1984 that it didnt rain
much. The weekend after the move was one that wouldve made Noah take ship. Drains had been installed
to carry water from the back of the house to the street, and during the storm, they kept backing up. During
one of his trips to unclog them, he noticed a crack in the garage floor. He stepped on the concrete and it
moved under the pressure. Water was washing away the soil under the floor.
The next morning, his daughter told him that something was funny in her room. He went up and looked,
and her dresser was in contact with the baseboard, but the top was a good two inches away. He walked
around with a plumb bob and found that most of the interior walls werent straight. There were cracks in
the wallboard and a gap between the corner of the sliding-glass door and the wall. The side door to the
garage would only open about a foot. With more examination, he discovered that the retaining wall at the
rear of the house had several diagonal, parallel cracks, was way off plumb, and bowed out toward the house
midway along its twenty-foot length.
On Monday, Johnson called the builder but could never find him, though he was connected to the
construction superintendent, Elmer Dylan. Elmer was one of those hard-core, longtime construction guys
who smoked, cursed, said aint a lot, didnt listen to women, and was generally useless. Johnsons sense
of drunkenness told him that Elmer had drunk one too many once too often, and this was his last stop. Elmer
pronounced the problem normal settling. Johnson knew that was bullshit, so he hired a consulting
engineering firm.
The engineers agreed that the problems had been caused by poor construction methods and techniques.
Armed with their report, he wrote a strongly worded letter to the builder, threatening a lawsuit if the
problems werent corrected. Frumenti, the builder, like all construction people, knew all the tricks to delay.
He referred the letter to his slimebag lawyer. Whatever happened wasnt going to be without a fight.
In the meantime, Dianne insisted that the property needed to be landscaped, even though he argued that
they might have to abandon the house and that if they got the repairs made, the workers would have to dig
up the front yard to get at the problems. Dianne was determined and started ordering plants, trees, and
supplies by the truckload. After four weekends of digging thirty-five holes for Leland cypress trees, he was
defeated. The soil, after it dried, was harder than rock. It took a pick, a set of post-hole diggers, shovels,
and a lot of blisters to dig. It was made more difficult by the steep grade of the yard, the wild artichokes,
thornbushes, and other crap.
They finally hired a contractor to do the work on the house, and with all the delays, missed
appointments, and Diannes change orders plus her generally poor management, the cost was only twice
what it should have been. As Johnson watched the mostly Hispanic workers dig in that unforgiving soil, he
realized that there was a reason for illegal aliens.
Dianne wouldnt listen to his advice, though she expected him to make the decisions and take all the
responsibility for everything. Shed take none on herself. There was no pleasing her. If he liked one plant,
she disliked it. Hed suggest some change or arrangement in a meeting with the landscape people, and shed
say no. There was no explanation or reason; she just put him down with her no. While all of this was going
on with the house, things at work were just as intense.
Johnson had given up purchasing the shares of nonpublic companies; others had discovered the idea
and bid up the prices. He was still doing a ton of business in restricted securities even without full access
to the T&I report. The tribal business continued to grow and started to produce spin-off effects. If he could
work a mention of it into a conversation, it seem to reduce the clients fear and got the conversation moving
toward the development of rapport. It also gave him the chance to sound impossibly noble.
The sales process as practiced by brokers went from the call to the yes. The first step was generating
rapport. Stockbrokers have a limited amount of time to get to the yes, so a good deal of what they do is put
up a shallow pretense of caring so they can move to the next step. Johnson wasnt good at shallow. He was
still convinced that if you gave clients the facts, they would buy without a lot of tricks and mind games.
Rapport got you to first base, but it wasnt enough to build a long-term relationship. It had to be backed up
with service.
Johnson failed at the shallow stuff of selling, but he was great at back-end service. He seemed to have
a natural ability to sense what a client needed, and then hed do it for them. Over time, the client would
come to understand that Johnson was honest, hardworking, concerned with their welfare, and caring, but it
didnt come through early. Johnson was willing to do almost anything for his clients and was ferocious in
fighting for their interests. The result was that he sometimes found himself being taken advantage of.
Johnson had a deep fear of being excluded, of being an outsider; he desperately wanted to be with the
cool kids. He hadnt been givenor at least he believed he hadntthe keys to acceptance in the status-
conscious world of the teenager and college student. He wasnt tall and handsome; he wasnt a great athlete.
He was introverted almost to psychosis, and his conversations tended to end up with him lecturing on some
topic and boring everyone. His desire to be included had led him to try to buy his way into favor.
He still had the coping mechanism from High School (candy in the pockets) and DuPuy and Winston
(free Wall Street Journals) which where inducements for others to come to him, giving him the satisfaction
that even for a brief second, they needed him. In college, hed do laundry for people, iron shirts, and on
more than one occasion took tests for others. He was desperately trying to get people to include him, and
they didas long as he was doing something for them. He hoped they would like him and be grateful for
what he did, but it never happened. Hed do this repeatedly, with the same results. It never changed.
Johnson had a very difficult time making friends. A psychologist could have made a career out of the
analyzing the reasons. During the time he was supposed to learn socializing the family was living in
Johnstown PA, hed made little progress until his mother punished him for some offense and enlisted him
in a boys choir at their church. You were in the choir until your testicles dropped. Johnson had been boy
soprano for about an hour before his voice changed and he became a bassand not just a bass; a basso
profundo. With his voice, he was the ugly duckling of the choir. They kept him around because of one part
of the Hallelujah chorus requiring a bass voice. The only good part was that he found a few guys in the
choir he started to get friendly with.
Those relationships developed into a larger group of friends, and after they all tore apart an abandoned
house, they were known as the Ace Wrecking Crew. They were all tight until the guys started to get
girlfriends, and of course Johnson was too introverted to have a girlfriend. So, while all his friends were on
dates and some actually having sex, he had exactly four dates in four years.
After his freshman year in college, his family had moved to Chicago. Two of the other guys in the Crew
had fathers at the same company, so they moved too. Their families lived in different neighborhoods and
the guys were dating, so the disconnect continued. He never made a lot of friends in college, and so he had
none of the network connections most people develop there.
He remained friends with the Wrecking Crew, and even though they were all in the same draft board
in Johnstown, only two of the twelve went into the service. They all scattered in the winds of the times, and
while they still talked, entropy was at work.
Most of the guys he met in the army got out after their minimum time, and he never saw most of them
again. Most of the guys he met in Vietnam were killed, so that was the end of that. He entered the brokerage
business with few friends, and fewer skills to develop them. He was so eager to have friends, to be liked,
to be accepted and wanted, that he rushed into relationships full throttle and without reserve. Retail
brokerage was a dog-eat-dog place, and lots of people survived by exploiting others. It was really just life.
But Johnson was a romantic and believed that if he entered each relationship without guile, it would be a
good, just, and fair relationship. Hed stopped believing in the Easter Bunny and Santa Claus, but he still
believed that all people were good, just, and fair.
Except in the case where he felt an instant dislike for someone or was being physically threatened, he
didnt confront the wrongs done to him. He was so eager to be wanted and celebrated that he wouldnt say
no and took on far more work than he (or really anyone) could handle well. The nature of the business
provides a constant stream of adrenalin. To make a cold call successfully, a broker has to be pumped up,
and he needs constant reinforcement of his worth and success. If there is no stimulation from winning over
a client, brokers seize the chance to stimulate themselves by demonstrating their superiority over each other.
The Morgan guys, for example, would talk too loudly about the fabulous vacation theyd been on, the trip
to Vegas (it was always Vegas, never Las Vegas, and said with a knowing tone) to see a championship
fight.
Every broker wants to be the best, and they constantly compete with each other, so they cant get
stimulation from their peerssince, in their minds, they have no peersand if they cant get it from
whipping and driving customers, they get it by getting one up on some office victim.
The victims change, but the easiest one is the sales assistant. Some of the sales assistants were bimbos,
but there were others who had long experience in the business and actually had taken the same registration
tests as the brokers. The assistants always believed they worked with the brokers, but the brokers thought
the assistants worked for them. Brokers cant operate without sales assistance of some sort. Office managers
dont want to see brokers filing out new account forms, dealing with trade problems, running down Old
Mrs. Browns PG&E dividend from two years ago, or researching cost basis for a client who can never
keep track of it.
 Managers want to see brokers on the phone, making calls and selling. Sales assistants make that happen,
but good sales assistants are reserved for the good salesmen. New brokers might share an assistant with
three or four other brokers, but the big producers get their own or at most share with one other broker.
There are those brokers whose sense of self-importancelow self-esteem but huge egomakes them
frustrated, and they seek every opportunity to lash out at someone. There was a broker in the office named
Jerry Down who was a complete ass. Being assigned to him was sales assistant hell, but he was a big enough
producer and loud enough about his prerogatives that he got what he wanted just to shut him up.
Johnsons current assistant had formerly worked for Jerry, and instantly Johnson picked up that she
was shell-shocked. Jerrys tirades were legendary and could be heard all over the office, and this poor
twenty-five-year old had been the target of 90 percent of them. This poor girl, named Phyllis, was so
concerned about mistakes in typing that she cringed when one was pointed out. Jerry got a new sales
assistant, a short, fiery Hispanic lady named Gloria. Gloria was older than most of the other assistants, had
a quick mouth, and took no shit. It was a situation made for conflict. When it came, Johnson was right in
the middle.
Jerry was doing a restricted-stock trade for one of his asshole clients (a brokers clients always reflect
his personality), and Gloria had come over to Johnsons desk for some help with the forms. Jerry had just
yelled out the door, Art Weldron is selling ten thousand shares of Wells Fargo. Rule one-forty-four, and
left it at that, assuming that somewhere, the universe would move and know what he was talking about and
it would get done. The problem with Jerry is that it usually did, which just encouraged him.
Excuse me, Phil. One of Jerrys clients, Art Weldon, is going to sell ten thousand shares of Wells
Fargo under rule one-forty-four, and Im not too familiar with this stuff. Could you help me?
Johnson had a standard series of questions he asked to determine what paperwork was needed, so he
responded, Yeah, I heard him. Hes so loud, Im not sure that we have to file the paperwork. Everyone in
the world knows hes selling. That got a few giggles. OK, heres what you need to know. He pulled out
a package of forms. This is the form one-forty-four. This has to be signed by the client, and the original
and three copies have to be sent to the SEC no later than close of business the day of the trade. On the form,
youre going to have to fill out how the stock was acquired and when, whether this is part of a larger order,
and the clients position with the companyyou know, officer, director, or whatever. He paused to see if
shed gotten it all.
I dont know all that information. How do I get it?
Well, you can ask Jerry, or you can call the client and ask them.
Thanks, Phil.
Johnson could have very well said that no, he couldnt help. After all, Ed Kirwin had come from New
York to be head of restricted stock in the office. But he wanted to be accepted and wouldnt say no when
helping might make someone want him. He went back to work, confident that hed given her correct
information. It ultimately was Jerrys problem if he screwed up and the SEC gave him a prostrate exam
with an ice pick.
Hed seen Jerry go into Perrys office and close the door. Now he was wildly swinging his arms around
and yelling. Phil ignored it. But after a few minutes, Perry stuck his ratlike face out and beckoned Johnson.
Johnson moved toward the office with the joy of a condemned man. He walked in, and Jerry was on him
like a wolverine. Did you tell Gloria to call my client and question him about his sale?
Johnson rarely liked this sort of thing, and he looked at Perry, who acquiesced to Jerrys attack by doing
nothing. Johnson turned to Jerry and said, Hi, Jerry, good to see you. Whats up?
He could see Jerry about to explode, and Jerry screamed, Art Weldon is a director of Wells Fargo and
he wants to sell stock, and you tell some bubble-brain sales assistant to call him with a lot of stupid
questions! Were here to do business, and were going to lose the client because of you!
Johnson was pissed, but he contained himself. Gloria asked me to help her with the forms for the one-
forty-four sale. I told her the information she was going to need, and she asked where shed get it. I told her
to either ask you or to call the client.
Jerry exploded again. What business do you have telling me how to run my business? You do pissant
commission; Im doing huge business, and I dont need assholes like you fucking things up. Jerry turned
to Perry and said, This is the kind of broker we dont need here, Perry. Why dont you fire him for losing
my account?
Jerry was seven inches taller than Johnson and by this point was leaning down into Johnsons face. In
a surprisingly cool voice belying the anger he felt, Phil said in a no-nonsense fashion, What I did, Jerry,
was keep you from going to federal prison and becoming the wife of a three-hundred-pound black guy.
Youre dealing with federal law here, asshole. I did you and Gloria a favor, so fuck yourself.
They stared at each other and then Johnson added, You know, Jerry, maybe if you trained your sales
assistants about your likes and dislikes and some of the procedures, you might have an easier time of it.
I did train her. Shes just stupid, and she wont learn.
Well, if the student fails to learn, the teacher has failed to teach. Jerry moved toward him, and Phil
said, So, has the client told you theyre firing you, or have you done the trade? Jerry admitted neither had
happened, and Phil continued, Then what the fuck is the problem, other than you being an asshole? Phil
turned and walked out of Perrys office.
Gloria lasted another week before she told Jerry to fuck himself and ground her cigarette out on his
antique desktop.
By midyear, things were going well, and Johnson almostbut not quiteentered into a period of
participatory happiness. Things were so good, he was getting complacent. It was like the tours in Vietnam.
The most dangerous times were the first few weeks when you were too stupid to be properly afraid, the
middle weeks because you thought you knew everything, and the last couple of weeks when you were
overly cautious. He was in the middle of his combat tour with Hall, and he thought he knew everything
about Hall and what he was up to. So he got lazy about watching Halls every move.
In July, after several months of fruitless negotiations, he and Dianne filed a lawsuit against Nino
Frumenti. Frumenti had proven unwilling to do anything about the damage to their house; in fact, he even
refused to admit anything was wrong. It was going take three years or more to get to trial. However, the
lawyer told them these things rarely got to court. Still, hed planned for a lawsuit. He usually worked out
what the worst-case scenario would be so if it happened, he wouldnt be surprised.
Dianne seemed to be returning to her normal, moderately disturbed ways. The current problem in the
family was that their son hadnt handled the move well. Hed entered second grade at the new school, and
the teacher hed started with was diagnosed with cancer and left. The loss of the teacher combined with the
trauma of the move really threw him. He got restive, argumentative, angry, and frustrated, and he began to
fall behind in his work.
They made the decision to hold Dean back a year, or as the school people put it, Give him a gift of
time. For some reason, it fell to Phil to tell the little guy that all the friends hed made in the last year
would now be a year ahead of him and that hed have to make other, newer friends. He also knew that the
kids who had known Dean would make fun of him and call him stupid because he was being held back. It
wasnt going to be easy, but it was better to do it now than later. The little guy didnt understand what was
happening. Phil ached for him, knowing firsthand the agony of being rejected, abused, and an outsider. A
normal father with Phils experiences wouldve adjusted his schedule to find more time to be with his son
and to help him over the rough patch. Johnson repeated the mistake his own father had made. He didnt
take the course of being his sons friend and helper at a time that Dean needed both.
Phil decided they needed to take a vacation. They went with their next-door neighbors, Linda and
Roger. Linda was some big wheel with AT&T, and her husband was an engineer with the same company.
They were an odd couple. Linda was a blond with a great body and was one of those people who was used
to getting her way and convinced she was right about everything. She couldnt be right, because Johnson
was always right.
Roger was a balding, round-faced, soft-bodied nerd. It was the first time Johnson had seen the reversal
of traditional marriage roles. Linda had the more responsible and highly paid position and was the alpha
dog; Roger was submissive. They had no children. After knowing them for a year, Johnson was convinced
they didnt have children because they never had sex. He couldnt imagine Linda involved in the sloppy
and uncertain mess that sex could be. She was too controlling. But if she did have sex, shed be giving
Roger directions like he was a blind man in a minefield. Johnson figured it would take a jackhammer and
couple sticks of dynamite to get her off.
They were good traveling companions. Linda could drink like a sailor, and she and Roger liked to
scuba, so they went off with Dianne, leaving him alone. The first week, they were on one of the
Windjammer Cruise ships, the S/V Fantome, that had previously been a private yacht owned at various
times by the Duke of Westminster, the heir to the Guinness brewing fortune and Aristotle Onassis. As usual,
Johnson spent that week in a state of drunkenness as he relaxed. The second week, they went across the
island of Antigua to a hotel called the Half Moon Bay.
When they checked in, they found that their rooms werent ready, so the front-desk clerk referred them
to the pool bar to wait, and Johnson didnt need a second invitation. They sat down and a waiter came over,
and they all ordered rum punch. The first one went down fast and good, and so did the second. As the
finished their third in fifteen minutes, Linda looked up and took off her sunglasses. Her blue eyes were
unfocused, and she was red in the cheeks. I dont know about you, but Im getting drunk.
The punch was mostly local 151-proof rum with some fruit waved at it as it went by the bartender, and
it was wonderful. They went back to finish their check-in, and there was a young man there with the pasty
look of a guy who spends all his time indoors dressed in a three-piece suit with a large, mobile telephone
slung over his shoulder.
The phone was about three feet long and in a large, canvas case. It must have weighed ten pounds. The
receptionist was a native and obviously no genius when it came to technology. Three-Pieces was asking her
if the hotel PBX could be integrated with his phone. He explained he was an investment banker with Lazard
Frres and he was working on a big deal, so he needed to be able to get calls. The young woman told the
jerk that shed contact the manager or their telephone company to get the answer and then turned gratefully
to help Johnson and his party.
The island was beautiful and had 365 beaches. It also had a very pricy drug-and-alcohol rehab center
catering to the growing drug problem in business and finance. Johnson got motivated one day and borrowed
a shovel from the gardeners; he proceeded to build a huge sand castle modeled after his memory of one on
Haiti. He built it so well that the beach cleanup crew bypassed it for days until the ocean destroyed it. He
got very sunburned, which he treated with frequent applications of rum punch.
Dianne and Phil were having sex all the time. Rum punch could cover the hurt of his wounds. But one
night, Linda came to dinner in one of the outfits that had been modeled at a fashion show earlier, and Roger
followed with a huge smile on his face, red cheeks, and merry eyes. Johnson had seen women with the
FFLthe freshly fucked lookbut never a man. Johnson thought it was hilarious that the control freak had
finally given in to her human side.
The jerk with the cell phone never let down his pretense. Every day hed be on the patio by the pool in
his suit, telephone on the table next to him with antenna extended. Roger was convinced that the thing
wouldnt work on Antigua. In any case, there were only three or four flights a day off the island that
connected to the mainland, so the guy seemed to be in overkill.
Johnson moderated his drinking during the second week; he limited himself to three or four rum
punches at lunch, beer on the beach or someplace they stopped, rum tasting, wine with dinner, and more
drinks afterward. Johnson was having a good time. But the jerk was like a gray eminence impinging on his
good feelings. The guy never did anything to Johnson; in fact, hed never even spoken to him. But he was
there, acting out a pretense for dramatic effect. Everyone else was willing to ignore the guy, but something
started to well up in Phil.
He started to make loud sarcastic remarks within the jerks hearing and getting responses from others
in the form of nervous laughter at his meanness. It wouldve been nice to be able to blame the rum for what
happened, but that would be too easy. A latent streak of meanness melded with his frustrations with Hall
and life in general.
He was on the patio playing Hearts with an English fellow and two Norwegians, drinking rum punch,
when the jerk came out in his fucking suit again, with his fucking wingtip shoes and his buttoned-up,
fucking white shirt and fucking striped tie and that fucking phone. He was pacing up and down the concrete,
looking very worried. Johnson was looking at him with unconcealed contempt.
 The English fellow called out, Simon, join us for a drink in the shade! That bloody sun will rip the
hide off you. This pissed Johnson off. Hed formed an opinion about the guy, and if he came to the table,
it would provide new information that might make him change his opinion.
Luckily, the jerk refused. I think Im going to get called to New York any minute now, and I need to
be able to run to the airport.
The next flight out isnt until four oclock, and its one now. You have plenty of time if you get the
call, said the Englishman. This still had no effect. The jerk continued to pace in the full sunlight. It must
have been hell in that fucking suit. There was a point where the jerks pacing took him closest to the pool
edge. Johnson got up and started walking toward the hotel end of the pool, which was also the way to the
restrooms. As they both reached the optimal point, Johnson used his hip to give the jerk a little nudge into
the pool.
It was an act with no redeeming quality to it; it was just mean. The phone the guy was carrying had cost
about four grand and was totally destroyed. To everyone except Johnson, it appeared as if the jerk had just
missed his step and fallen in. Everyone was clustered around the jerk as they got him out of the pool,
offering him a drink and laughing in a good-humored way. Johnson looked at him and knew that the jerk
knew hed done it. Johnson materialized for himself the phrase mad as a wet hen.
Later in the day as the rum wore off in the sun and surf, Johnsons conscience started to bother him.
The feeling grew as the day passed, and his sleep was disturbed. He thought that he should find the jerk,
apologize, and pay for the phone, but in the end he decided that he was right; the jerk had been disturbing
his peace of mind and deserved what he got. Still, it bothered him at some level all the rest of the trip, and
he felt guilty for years. Perhaps that was the jerks revenge; it ruined the rest of the vacation.
Johnson stopped drinking, realizing that he was acting like an ass. He also needed to start the run-up to
going back to work. But the real reason was his shame at what hed done to someone else. The trip home
was long: Antigua to Miami, Miami to Kansas City, and then to San Francisco.
He came back to the office on Monday, gloriously tanned and feeling good even though he was tired
from all the time zones hed traveled through. Things were about the same there, except there were a lot of
new people around. Some were brokers and some were assistants. He found out from one of the institutional
guys that Hall had finally hit the jackpot and recruited six brokers from Merrill Lynch.
He was in the mens room, and Bob Chang, one of the senior guys, was there also. Chang had a heavy
Chinese accent and terrible diction, so you got about one word out of three. He drove Hall nuts because his
clients were also Chinese, and unless Hall found another Asian broker, Chang was safe. Johnson didnt
need to strain his hearing to understand the three words: Watch your ass. Johnson was sure that Chang
hadnt gone gay and was attracted to Johnsons butt, so the words were a warning that Hall was on the
rampage.
Now that Hall had hired some good brokers, he could really get to work firing people. Hall was putting
pressure on all the old Shuman brokers to get them to retire. He told the syndicate managers to allocate to
the newer Morgan Stanley brokers first; whatever was left went to the Shuman guys. If there were disputes
about a prospect, Hall directed it to his favorites. The second-class citizens developed a name for them:
Halls Whores.
Hall would go to extreme lengths to apply pressure. Lynn Larson was having a great year at midyear;
hed done three quarters of a million in commissions with no errors or problems. Hed gotten married the
year before, and he and his wife had planned a safari in Africa. When Hall found out, he walked over to
Lynns desk. Lynn, began Perry, looking concerned. I understand youre planning to take a months
vacation next month?
Yeah, Perry, its a combined honeymoon and vacation. Weve been planning it for a year. Lynn was
excited, so he continued, Were going to East Africa on a game safari. Its really a great trip!
Im sure it is, said Perry, still looking worried and concerned. But what I cant figure out is how a
broker with onlyand he emphasized the onlyseven hundred and fifty thousand in commissions at
midyear thinks they can take a vacation. It seems to me that youd want to get your commissions up before
wandering off on some ill-planned adventure. He turned and walked away, leaving Lynn standing there
with his mouth hanging open.
 About the same time, the black dog of depression came calling for Johnson. He could never tell when
it would come or what caused it to arrive. It just started and then got worse. The only thing he could think
of that contributed to this episode was that his son was starting to have some dangerous problems. He was
angry and would break his toys and other things around the house. Hed fly into a rage. It was somewhat
funny to see his little face screwed up in anger, his eyes blazing and the veins in his head and neck standing
out, but it was really serious.
Then again, it could have been that Dianne was demanding all sorts of stuff from him that he was unable
to givemostly more time with her. It could have been that hed gotten into a fight with one of his clients
over some stupidity, and the client had left. Johnson took a personal interest in all of his clients, and
whenever one left, he took it as a personal rejectionwhich it was. When you were prospecting, rejection
wasnt personal, but after a person became a client, the rejection of your services was direct and intensely
personal. Some of the brokers handled the rejection better than he did and were always able to rationalize
a reason that it was the clients fault. Johnson couldnt do that. It was just a slam in the chest.
Or, it might have been a buildup in the tension of the office and at home, plus his general feeling of
being inadequate. In all probability, it was due to a dry spell. As in most things, theres a rhythm to
investments. At the beginning of the year, everyone is filled with hope for the year ahead. Theyre ready to
invest on those hopes. As the year progresses, hope begins to fade in the face of a world seemingly driven
by fecklessness and mendacity. The summer brings vacation, kids out of school, warm weather, long days,
and lots of outdoor activities to distract a person. The fall brings a recommitment before the winter sets in,
and the slowdown comes with the cold weather.
There are times when a broker can go a considerable period without opening an account. For Johnson,
opening accounts was a rush, and he found himself feeling low and out of sorts if it didnt happen regularly.
He went from May through July before he opened a new account, and then it was a small, nuisance
accountmore work than it would ever produce in revenue. It brought no satisfaction. He knew that Hall
watched the new accounts production. Perry had let two of the older Shuman brokers go in June and passed
out their accounts to his favored brokers, knowing they would pursue them. The fact that Perry was
executing his evil plan worried Johnson even more.
Somewhere in the dark, the black dog appeared, and his spirits fell. He began to question himself and
criticize his actions and all of his accomplishments. He never gave himself credit for anything, and that
deepened the spiral of self-recriminationwhich then brought on further depression and self-dislike. In the
midst of all this, he started to think that he should just quit and do something else. He didnt know what
hed do, though. He had the same problem hed had ten years before; he wasnt qualified to do anything
else. He did make some calls and found that he could get a job, but all anyone wanted him to do was sell,
and selling was exactly what he didnt want to do.
In the end, he worked through it over the summer, but the depression lasted for the entire season and
ruined it. The fall came with is glorious fullness that only coastal California has; the days were almost
twelve hours long and the nights just getting cool enough to bring on good sleep. The colors of the grasses
changed, and the most prevalent species in the area, poison oak, turned a fiery red and gold. He finally
opened a couple of decent accounts and made the decision that he wasnt going to leave, because he had a
duty to his family to continue to support them the way theyd become accustomed to, and that was the
driving force in his life. The duty was all. It was duty, after all, and he owed the family, particularly Dianne,
his duty. And hed discharge it.
The year 1983 wound down, as all years must. There were the usual holidays. Bill and his wife came
down from Sacramento for Thanksgiving with the news that they were going to have a baby. There were a
few Christmas parties and some gift giving. The Ghost of Christmas Past put in an appearance, except it
wasnt the wife; it was the daughter, his godchild, who took the opportunity to ruin the holiday. Johnson
thought, Good God, now she has poisoned the kid against me. This will go on for the rest of my life!
Depression entered as the rains came.
 Chapter 29
The Year of Decision
The year 1984 opened with another horrible series of rainstorms. It came in bucketsno, buckets were too
small. It came in bathtubs. The wind ripped into the corners of buildings and left with a scream to chill the
blood. The ground became saturated, and again, in places springs appeared where theyd never been before.
He began to realize that there was a reason the kids school was called Spring Hill. The storms seemed to
be lined up in the Pacific like a row of ducks and just slowly marched down the coast.
The house began to shift again, and cracks were appearing all over the place. Hed come home to a
litany of new problems. The lawsuit had progressed to discovery. Discovery is supposed to be about seeing
what kind of witness a person would make. Thats lawyer bullshit. It really has two goals. One is to earn
the lawyers lots of fees because of hours of preparation and the hours of depositions. The second goal is to
punish the plaintiff for filing the lawsuit. Discovery was so often abused that the California Bar put down
a rule about the uses and abuses of discovery, which, of course, since it was written by lawyers for lawyers,
they just ignored. Discovery is intrusive, insulting, irritating, invasive, and, for the most part, idiotic.
Johnson wasnt concerned about his answers, but he was terrified of what Dianne would say.
Of course, his lawyer sent pages and pages of the same drivel to Frumenti and his people, and of course
Frumenti would wait until the last possible moment to return them and the answers were always incomplete,
so Johnsons side had to redo them at huge hourly cost. Johnsons lawyer was from a small firm, and they
didnt have the legions of associates to do the dirty work, so the bills were enormous.
They werent getting anywhere fast, so Johnson suggested they sue the subcontractors on the house,
and now the case involved six or seven other defendants. It was getting to be a mess because the
subcontractors kicked the case to their insurance companies, who used their own lawyers, and the case
slowed down while they got up to speed. Johnson was laying out between five and ten grand a month on
the case, but he had no choice as the house was virtually unsalable in its condition. That meant they were
out all the money theyd put down on it.
Johnson realized that like most things in life, lawsuits were 95 percent boredom and 5 percent terror.
Nothing stopped at Morgan Stanley to make way for the lawsuit. He was expected to be there every day at
five in the morning and be there until at least five at night. If he was out of the office at the lawyers, he felt
that he had to make up the time by extending the hours he worked.
Now a new stressor appeared. In 1977 while still at Dean Witter in Palo Alto hed been introduced to
a woman in Los Altos who had recently been abandoned by her husband of thirty years. The guy literally
ran off with his twenty-two-year old secretary. Bette Woodward and her family were the founders of a
company called Woodward Grosvenor. She needed someone to help her get through the financial mess of
the divorce, but she was also an emotional wreck and started to depend on Johnson for everything. While
he and Dianne had lived in Los Altos, shed come around to their house for no reason other than to have
company.
Over the years, he did an inventory of her assets and liabilities and realized that while she was illiquid,
she was really quite wealthy. Her house was worth over a million, and she had a big block of Woodward
Grosvenor, which traded infrequently but was highly priced. She had a couple of antique BMWs in her
garage. So shed be OK if she managed her assets correctly. The client relationship developed into
friendship, and they exchanged Christmas and birthday gifts. She called the office almost every day, and
things went very well for years. Gradually, she regained her equilibrium and footing.
After four years of the relationship, there was a subtle but noticeable change in her behavior. First, she
would read some story in the paper and then attribute all the stories to herself. If there was feature on a city
in the gold country, shed claim that shed been there or lived there or knew the area intimately. Shed seem
to lose focus and would need to have everything explained again and again, and then shed attack everything
with a relentless and frenetic energy. He had her on a budget, and she started to overspend. Hed built in
some safety reserves, but she was going past those. She always had an excuse for the spending and promised
it wouldnt continue, but it did.
 She suddenly was always sick with a cold or a flu that never seemed to go away. One day, she asked
him if he could take a power of attorney on her investment account so he didnt have to call her all the time.
He sent her the form, and when it came back, he saw it had been signed with a felt-tip pen. And, while it
was her signature and passed muster with the eagle eyes in New York, Johnson was troubled by the
signature and her behaviors. He started to take notes and document everything and every contact he had
with her.
Her spending continued to grow, and there was no way that her investment portfolio could support the
spending. Soon, there was no extra money, and she asked if there was any way she could get money from
the accounts. There were two ways: sell securities or borrow against them. At this point, Johnson made two
mistakes that would haunt him.
First, he allowed her to margin her securities. Soon, she was at the limit for borrowing. Margin, like all
debt, increases risk. In a portfolio, its a trade-off of getting money today that may or may not be earned in
the future. Even the federal government recognizes how dangerous margin can be and imposes regulations
on the level of borrowing. As the amount borrowed increases, it takes smaller declines in value to cause the
equity to fall below the requirement amount. If a person has equity of $500 and borrows an additional $500,
then every drop in the value of the portfolio is multiplied by the leverage factor: in this case a factor of two.
A $100 drop in value will drop the equity by $200, so its frighteningly easy to lose all the money in the
account. Bette was borrowing and spending at an incredible rate. It was clearly not sustainable. But Johnson
believed her stories that it was going to stop, even after any number of times when it didnt.
The second mistake was to continue to do business with her. All the warning flags hed been told about
were flying: changes in customer behavior, lack of communication, unwillingness to listen to reason, taking
on dangerous activities, and changes in financial profile. He honestly believed that he could help her out of
the predicament; he was convinced that she was just temporarily out of kilter and finally that she wouldnt
do anything bad. Once again, he fell for his romantic notion that people were good and that he had no right
to judge or question them.
One day, he went by her house to see if he could talk to her about the problems. She let him in, and,
being a guy, he noticed her boobs. Her T-shirt was rumpled and wet at the tip of her right breast. She was
too old to be nursing, and if it was from washing dishes, more of her shirt would be wet. At this point, a
youngish man came around the corner from where Johnson knew her bedroom was.
He was a bit taller than Johnson, but thin with the leanness that comes from being constantly nervous.
His shirt was open and untucked; his chin was covered with a scraggly beard that looked halfway between
a goatee and just not shaving. He had tattoos on one arm. Bette introduced him as Doug. The two men
looked at each other like two Siamese beta fish getting ready to do battle. It was obvious that he wasnt
going to be able to talk to Bette on intimate details, so he made up some story about making sure she
protected her cars from the aerial spraying that was going on to kill some pest or other. He left dispirited
and with the naughty feeling that comes from finding out a dirty secret. When a single woman takes up
with a man, its only a short time before the new man convinces her to get rid of any male in her life that
the new man thinks threatens him. There can only be one rooster in the hen house.
He now knew where a good portion of the money was going, so it wasnt a total surprise when, several
weeks after Johnson had met Doug, Bette called asking for $15,000 to be sent to her. Johnson asked her
why she needed the money, as shed just made another large withdrawal, and was told that it was a down
payment for a gas station that Doug wanted. It was her money, so he sent it as requested.
The pattern more or less continued, but finally, the end of the string came. Shed withdrawn so much
money, and his trading had eaten up money in commissionsbut the effects, while delaying the inevitable,
didnt prevent it. She started to get margin calls, and he had to turn down her money requests. She got
angrier and angrier. Finally, the margin department told him there was a request to transfer the account, and
he was glad.
He forgot her. But in March, she called and wanted to talk. She was upset, and it showed in her voice.
She was asking questions about the accounts. She finally asked, Did I sign discretionary forms? He
responded yes, and she asked if he could send her a copy of the documents. He sent it and thought no more
about it. About a month later, he was on the phone when Caryn Gruen, Joe Eldridges new assistant, walked
up and laid a document on his desk. She said, Dont look at that until youre off the phone, and walked
away. He didnt listen to her and picked it up.
The effect of seeing that he was being sued was like being hit by a truck. His stream of conversation
with the prospect fell apart. He couldnt complete a sentence. He told the fellow he had an emergency and
would have to call back. He started to sweat and get sick to his stomach, and almost instantly, his intestines
warned him that a trip to the bathroom was in his near future.
There must also have been a place where lawyers learned to write in ways that would have the greatest
emotional impact on someone being sued. They used words like hideous, unprincipled, disastrous,
and horrific to describe actions, knowing that those words would make most law-abiding defendants
almost indict themselves. It was a shock attack: hit the enemy first, fast, and hard.
The filing was brief, only a few pages, but it accused him of reckless disregard, poor investment
decisions, creating devastating losses, committing fraud, and, finally, of destroying Bettes ability to
continue her lifestyle. It was like a hammer blow to him, since it attacked the reputation hed convinced
himself that hed developed and which was the exact opposite of those statements. It created fear. It wasnt
that hed never been afraid. Fear was an old friend. But in all the other cases of his fear, hed felt he had at
least some control over the situation. Here, he had none. He had been trapped by the law against the wall
of Morgan Stanleys opinion of itself.
He convinced himself that Hall would fire him. After all, his threat had been that if he made another
error, it was curtains, and surely a lawsuit, a public document with Morgans name on it, was worse than
an error. He was convinced that he was now a pariah. No one else there had been sued. They would all pull
away, wouldnt they? People always seemed to run before others troubles because trouble could be
contagious. This was trouble, big-time, and surely they would run from him as from a rabid dog. Finally,
the words hit him hard, and he convinced himself he was guilty and was ready to surrender.
All of these thoughts ran through his head in the ten minutes between receiving the lawsuit and leaving
the bathroom. He stopped at his desk to pick up his file on Bette, the lawsuit letter, and a note pad in case
dipshit Perry said anything worth noting. As usual, Perry didnt greet him or ask him to sit down. He was
turned sideways in his chair, reading his own copy of the complaint, and he turned his neck to the left. To
Johnson in his hypersensitive state, it looked like the turret on a tank turning to engage a target. What
about this mess? Perry shot.
Didnt do it, Perry. This is a longer story, and none of those charges are correct. I have extensive notes
on what I did and how I tried to talk her out of what she was doing, including letters. I didnt do any of
those things.
You did lose all her money. Isnt that correct? Perry asked in a surprisingly mild tone.
No, I didnt. She took money out of the account so fast that the money I made her couldnt keep up
with her spending.
Why didnt you tell her to take her business elsewhere? Perry had asked the question that would color
Johnsons thinking for a long time. It would be asked again and again by both defense attorneys and plaintiff
counsel.
Ive always been told by the compliance people that firing an existing client is a very tricky business
because, under rule four-oh-eight of the NYSE rules, youre supposed to know your client before you do
business, and therefore, once you accept them, its an admission of guilt to tell them to leave unless theyre
doing something illegal. Once accepted, they stay until they leave. Johnson was rather proud of this
discussion of the rules. Of course, he wasnt 100 percent correct in his understanding of them. Besides,
Perry, Bette Woodward is a friend, not just a client. She used to live around the corner from Dianne and me
in Los Altos, and we used to exchange Christmas gifts. It wouldve really been hard to fire her.
How old is she? Johnson replied that Bette was in her midfifties, wondering what that had to do with
it. There was silence for minute while Perry called Joe Eldridge. Then he continued after Joe came in. Did
you sleep with her?
Fuck! Johnson almost yelled. Fuck, you think Id sleep with her? What the fuck? No fucking way!
Jesus! No fucking way!
 Perry was clearly taken aback at Johnsons crudity and vehemence, but Joe was the soul of calm. The
reason Perry asked the question is that many times when a woman sues a brokerage, its because the broker
was sleeping with her and broke it off. The woman seeks revenge by suing. The other side is that there are
cases where a broker is losing a lot of money for a female client whos getting upset, so he seduces her to
take her mind off the losses. Youre going to get that question from everyone involved, so get ready. Joe
delivered this in a deadpan manner that wouldve done a judge credit. But there was a faint, enigmatic smile
on his face as he did so, and Johnson wondered if it was normal or if Joe had been amused by Phils response
to Perry.
Well, this, Perry said, waving the complaint, has not gotten to New York yet, but it will tomorrow,
and the firms lawyers will want to talk to you, so be prepared. It has to be handled by New York because
its an actual lawsuit, not just an informal customer complaint. So its out of my hands.
At this point, Joe interjected something that made Johnson warm to the weird guy. Phil, I know that
brokers who get sued the first time think the world is coming to an end, but its not. Youre not the first
broker to get sued, not even the first Morgan Stanley broker, and not even the first one in the office, so
youre not alone. And the firm cant take any employment action against you until the lawsuit is resolved.
Johnson figured that last was designed to dampen down the malicious jerk Perrys desire to fire him, and
in fact, Perry was scowling at Joewhether over the revelation of other brokers being sued or the fact that
he couldnt fire Johnson the second the meeting was over.
He left feeling somewhat better. He got some questions from Phyllis his assistant, and the vulture Jim
Maletis. Johnson didnt trust Maletis, he had concluded at their first meeting that Maletis was a spy. Besides,
he was a know-it-all, arrogant ass whose only contribution to his clients was to recite to them the notes
from the morning meeting.
Johnson was finishing one of his trips to the bathroom to expel the nonexistent contents of his colon,
and another of the brokers in the office, Paul Sackett, was there. Sorry to hear of your troubles, man, he
said in his North Texas drawl. Now you know why, if women didnt have pussies, there would be a bounty
on them. Johnson laughed. Hed never heard that formula before, and it was funny in an ironic way. At
this point, he fully supported the sentiment. The laugher made him feel better, and he left the bathroom with
a rare smile.
The rest of the lawsuit went surprisingly smoothly. The firms lawyers called, and sure enough, the
second question was if he was sleeping with her. He made a lame joke that it could have been worse: at
least they werent trading optionswhich was a constant source of legal troubles. That was the last he
heard of it except for a series of questions in writing that related to his knowledge of Bettes other assets.
The next thing he heard was several months later, when Caryn Gruen again placed a legal document on
his desk. This was the judgment in the case. The firm had agreed to pay $5,000 to in compensation to avoid
the cost of trial, and the case was dismissed with prejudice. He knew that hed have to pay the $5,000, but
that was far less than what it could have been, and he still had his job. What pissed him off were the words
with prejudice. To him, they seemed to mean that he was admitting guilt and therefore the ruling was
prejudicial to him, and that wasnt right. He wasnt admitting any guilt. Hed go to trial before he even
admitted to a fiction of guilt.
He eventually found out that dismissing with prejudice means that the case has concluded and no further
action can be brought. He still had a black mark on his record, though, that anyone who wished to could
find, and that hurt. He wanted to revoke the settlement and go to court, but the lawyers were firm, and they
told him it wasnt his choice; it was Morgan Stanleys.
One of the lawyers was particularly instructive in his education. Phil, I understand that you didnt do
anything wrong, but theres another side to this. You have to act each and every day in what you think is a
suitable manner for the client, but the client gets three years to look back at what you did and decide if they
want to sue. In the haze of three years time, even the noblest intentions can look ill-advised. When you get
sued by a customerand its increasingly when, not ifand you go to trial, it will cost a minimum of thirty
grand, and you really dont know if youll win.
He paused for a few seconds to let that sink in and continued, Oftentimes, its better to take a small
hit than a big one, and thats what happened here. You had a woman client whose husband dumped her,
and shed likely be in front of a jury that would have six or more women on it, some of whom would have
had similar tales. You cant win something like that. Better to settle and get it over with.
The lawyers who bring these cases dont want to go to trial. They know they could lose, so theyre
always looking to settle. They know that brokerage firms and other companies who are reputational driven
will usually settle to avoid the negative publicity. Morgan is worse than most because it fosters this idea of
its pristine actions. You sue Morgan, you get paid, and quickly. Its unfair, but justice, regardless of all the
TV shows and movies, is not fair; its convenient.
He was being battered from all sides. His client had sued him, and now he had another deduction from
his pay. He was being pressured financially by the ever-rising costs of the housebuilder lawsuit. There were
the normal household expenses and kid-related costs, and he was still required to be in the office at 5:00
a.m. every day. His bowel condition was constant now, and he stopped eating because it hurt more to eat.
Hed find himself on Saturday unable to do much. He was confused and tired all the time. The genetically
given bags under his eyes got full and dark, and he thought he looked like a character from a Kafka novel.
To top it all off, Dianne did one of her stupidest things ever.
Hed observed that almost all beautiful women were insecure and doubted their beauty. He first thought
it was modestythey didnt want to seem arrogant and so they deprecated themselves. As he watched and
listened, he realized that it was deeper than good manners; it was a deep-seated fear that they werent
beautiful enough. The cosmetic industry made a fortune out of womens insecurity.
Dianne was a beautiful woman, but she was by no means perfect. Her legs were too short and the thighs
too muscular, her body was short waisted. But she had a pure and appealing face with hazel eyes that
changed colors like a kaleidoscope with her moods: green and fiery like emeralds when horny, brown and
doe like when compassionate. The whole thing was topped by a mane of auburn hair, densely placed and
thick stranded, which shined and rippled in the lights like a disco ball. When she was in the sun, the hair
would gain natural highlights of blond and lighter red, but always in good mixture. It was glorious, truly a
crowning glory, and he loved the feel of it. He always wanted it long and flowing. Best of all, it wasnt oily
or dry and didnt require special shampoos and chemicals to keep it beautiful. And, of course, she hated it.
Dianne was always concerned that her breasts were too small. She had a deep chest and a wide back,
so that if you measured her bust, it showed thirty-six incheswhich most women would have loved, but
not Dianne. She convinced herself that her breasts needed to project further from her chest and be rounder.
She was convinced that they were misshapen from nursing the kids and moaned about them constantly.
One day she called the office and told him that she and the lady up the street named Penny were going
to Sacramento for the weekend. He thought nothing of it, as hed encouraged her to get out and away from
the kids occasionally. About 8:00 p.m. on Sunday night, Penny delivered Dianne to the house, and it was
quickly apparent she was in some pain. She walked like someone with damaged ribs, like it hurt on every
step she took. Her face was drawn and tense, and the pupils of her eyes were wide and staring. He recognized
the look that came from pain-killers. She didnt raise her arms when they kissed and tensed her body.
For all her other gifts, Dianne was neither clever nor deceptive. As they got ready for bed, she
inadvertently left the bathroom door open a crack, and he could see her reflected in the mirror. Her chest
from the armpits to the solar plexus was wrapped in a bandage, and there was considerable bruising around
the collarbones that led down into the bandaged area. Eighteen months in an army hospital had given
Johnson the ability to spot wounds, and he knew instantly that Dianne had been hit in the chest. Even though
he was pissed that she hadnt told him what was going on, at least she was alive, and if she was only in
pain, that was a blessing.
That weekend, they were working in the yard, and she told him that she couldnt lift her arms above
her shoulders. He asked why, and she just said the doctor had said not tono other explanation. He was
just about to really cut loose on her about deception and all that when she admitted to him that shed had a
boob job. She called it breast enhancement. In his mind, boob jobs were the stuff of strippers and whores
and maybe a woman who had suffered cancer.
She explained that she wanted to keep him interested in her and shed seen the way he looked at women
with big boobs. He tried to explain to her that guys looking at womens breasts was just a guy thing, and
unless you were a priest, if you were a guy, you did it. She didnt buy that. He told her that it didnt matter
what the size of her breasts was; he loved her. That old male saw failed to sway her. Finally, she told him
the reason she had done it was that the frequency of their sex had dropped, and she was convinced it was
because her breasts were sagging.
Did you ever think that it might be my problem, not your appearance? He asked her. You know that
I had to have my dick sewn up and literally rebuilt. I have scar tissue and lumps that hurt, and I have a hard
time getting it up due to the damage to the blood vessels. In fact, its a minor miracle that I can have sex at
all. Why does it always have to be about you? The response was a usual female way of manipulation: she
started crying and left.
Shortly after shed finally healed, Fran Brogan, a sales assistant in the office who hated Perry as badly
as he did gave him two tickets to see Luciano Pavarotti at the Civic Auditorium. Hed heard of Pavarotti
from one of his infrequent visits to the educational channel and knew he was called the King of the High
Cs. Dianne was thrillednot by Pavarotti, but by the chance to wear an evening dress and show off the
new boobs.
The seats were excellent, looking down on the stage and in profile to the performers. There was a full
orchestra, and then, with no announcement or introduction, they began to play something he was vaguely
familiar with but couldnt name. They finished warming up the audience, and then out walked Pavarotti.
He was dressed in white tie and tails, with the collar of his shirt big enough to fit three of his large necks
in. He looked a lot like a penguin. He was hugely fat, and Johnson figured he hadnt seen his feet for years.
He had in his left hand the large, white handkerchief that was his trademark. The audience erupted in
applause. Pavarotti greeted the conductor and then turned to the audience. There was dead silence.
The conductor brought down his baton, and Johnsons life changed. The orchestra began to play the
opening of Vesti la giubba from Pagliacci, which he recognized. Then Pavarotti opened his mouth, and
from it came a sound so pure and perfect that the hair on the back of Johnsons neck stood on end and a
chill ran down his spine. Recitar! Menstre preso dal deliriohe had no idea what the words meant, but
it didnt matter. The beauty of the music penetrated even his damaged ears and his even more damaged
soul. The song ended, and Pavarotti left the stage, as was his custom, to thunderous applause.
The concert went on through various arias that to Johnson were less well known. Pavarotti sang Che
gelida manina from La Boehme and then Ah, mes amispour mon me, two of the most difficult arias
to sing. Johnson was transported, and by the time the La Boehme was finished, he was fighting tears of joy
and beauty. Finally, Pavarotti returned to the stage and sang Nessun dorma from Turandot. The force and
power of the voice and the words hit Johnson like a hammer, and he felt years of tension and denial of
emotion fade into peace suffused with joy and a rising of his spirit. He was ready to forget anything that
had happened. He wanted to hear more and for it to never stop. He was thirsty for spiritual beauty for the
first time.
He thought back to junior high, when one of the classes was in music, and hed goofed off the entire
time. He now regretted that he hadnt paid attention. In his way, he knew that if he knew more about music,
hed enjoy it more, and he was angry with himself that he didnt have the knowledge. The next day, Fran
asked him what Pavarotti had sung, and he couldnt name the songs. All he could say was a deeply felt
thank-you and that it had been an unbelievable concert. The effect was dangerous, because after this brief
excursion to sublimity, he walked back into the snake pit that demanded not letting emotions show. No
vulnerability, because its weakness. His emotions were up and showing, and he was unprepared for what
was to follow. While Pavarotti had changed his life for the good, what was about to come would change it
for the worse and send him into a professional limbo that would damage his psyche and make him angry
and unfulfilled.
There were three hot technology products during the mideighties: personal computers, the
microprocessors that powered them, and the hard drives that stored the data. During the summer, Johnson
had opened several accounts with some engineers and middle managers at Seagate Technology, which was
one of the hottest companies in the disk-drive area. They were good accounts because Seagate paid below-
standard wages but made up for it with generous stock options and rights to purchase stock. Since the
employees didnt get enough cash to live on, they had to sell their stock at regular intervals.
 One of the accounts he opened was with a fellow with the impossible name of Krozten Kzrenskshi, so
he just called him Kroz. Kroz was Polish and had a very heavy accent that was sometimes difficult for
Johnson to understand, and for the first time, Johnson admitted to a client that he was hard of hearing and
needed to have things repeated. One day Kroz called and wanted to sell five thousand shares of Seagate,
and Johnson executed the order. A few minutes later, he called again and wanted to sell an additional five
thousand.
A few days later, Kroz called and said that he hadnt received the confirmation of the trade and asked
Johnson to send him a copy. Somewhere deep in Johnsons brain, a circuit fried at that exact moment, and
he sent the confirm of the first 5,000 shares. What Kroz had wanted was the confirm of the second trade.
He asked Johnson what the price was of the trade, meaning the second one, and Johnson gave him the price
of the first one. The second trade had been executed at a lower price.
When the confirm arrived at Krozs house, he called because he saw the different prices, and Johnson,
still confused, gave him the price of the first trade again, which Kroz took to be the second price. A few
days later, Johnson was called to Perrys office, and when he walked in, he was stunned to see Kroz there.
Kroz has called Perry because he had three confirms in his possession: the original of the first trade,
the original of the second, and Johnsons copy of the first trade. He also had notes with times and phone
records of when he had called and what Johnson had said. His contention was that hed ordered the sale of
ten thousand shares of Seagate, which were executed in two lots of five thousand eachone at 25.75 and
the other at 25, according to the confirm. He had called, he alleged, to check on the prices after seeing the
difference, and he contended that Johnson had told him that all of it had been sold at 25.75. The three
confirms he said showed that Johnson was trying to deceive him by sending a false confirm.
It was cleverly done: Kroz convinced Perry over Johnsons heated denials that he should have executed
the second lot at 25.75 and that hed suffered loss because of Johnsons fraud, but he wouldnt sue if he got
the extra .75 per share. He repeated the charge that the third confirm had been an attempt to defraud him
and then left.
Johnson went back to his desk after his usual trip to the bathroom. Perry obviously believed Kroz, and
Johnson knew this could be the excuse needed to fire him. Johnson racked his brain to figure out how he
could prove that he hadnt deceived Kroz, but it was one of those nasty situations of he said, he said, and
Kroz had documentation of what had been said. Johnson made some notes of what he remembered and
talked to the traders, but frankly, he was unable to remember what had happened exactly. It was a blur. He
was exhausted all the time with the stress and the pressure of trying to please Perry and the other Morgan
masters. He was unhappy with his family and his life in general.
He realized that days were passing by and he remembered little of them. Dianne would always ask him
what had happened at work, and he rarely answered her. He couldnt remember what had happened.
Brokerage is an intense business calling for constant attention to hundreds of minor details. A wrong mark
on a trade ticket, and you had sold instead of buying; another mark, and you placed the order as a stop limit
as opposed to a stop. If your handwriting was terrible, the trader might think you were selling at 23 and not
28. In the brokerage industry, fatigue made you poorer because you made errors.
The next morning, Perry called him to his office. Perry had the head of compliance in New York, Joe
OConner, on the phone. It wasnt a pleasant call; OConner started the conversation by stating that Johnson
was guilty until proven innocent. Hall sat there and nodded in his sycophant way, saying nothing. As
OConners accusations continued, Johnson got madder and madder. There were few things that upset
Johnson more than being unjustly accused. Finally, hed listened enough.
Joe, Ive heard enough of this crap! I didnt defraud this guy, and I didnt misstate the price. I had a
brain fart and got confused and said the wrong thing. Thats a long way from what youre accusing me of!
Listen, you smartass son of a bitch, came the tiny response over the speaker, you have the worst
record of any broker in the firm. First it was the loss on the Insel thing, then it was the embarrassment to
the firm from that deal with the venture firm in Silicon Valley, and then theres that crazy woman who
shows up accusing you of all manner of crimes. Youre a lousy broker and worse person, and you dont
deserve to be at Morgan Stanley. There was a pause as OConner either caught his breath or thought of
what was to come next.
 Johnson attacked. Who the fuck are you to accuse me of crimes? Im not the worst broker in the firm.
There are worse, and I know it. You assholes think youre so pure and clean, the pure Morgan. What a
bunch of crap! You have as much shit on your boots as anyone, maybe more.
OK, said OConner, Ive heard enough. Its not my decision, but Im recommending to Perry that
you should be firednot allowed to resign, just flat fired, and I hope he does it and that you never work in
this business again!
Perry so far had said nothing. He finally stirred his toad like body. Thanks, Joe, for the time. I think
we all know the issues here, and Ill let you know what we decide to do. And he hit the disconnect button
on the speaker.
Perry turned in his chair slightly and looked up at Johnson (who had remained standing throughout the
conversation) through his black-framed glasses, his dead pool eyes almost gleaming with the excitement of
what was to come. Youre done here. This was your final fuckup; youre gone. I gave you a second chance,
and you threw the gift away. Get your personal stuff and get out.
Johnson was stunned. Hed never been fired before, and given his nature to look at things negatively,
it began to conjure up all sorts of horrible things. But finally, the enormity of what had just happened made
his conscious mind shut down, and he began moving like a zombie. He turned and walked out the office to
his desk. He stood there looking at the top of his desk. Around him, the office was filling with activity, but
everyone knew or suspected what had happened. Those types of things are impossible to keep secret in the
anthill of a brokerage office. But Perry wasnt finished torturing him yet.
Johnson stood there contemplating the end of his life and the awful consequences of his firing. He was
about to cry and was trying to fight back the tears. He was dishonored already, and he was going to be
damned if hed compound it by crying in front of all these tough-minded and cynical people. He headed for
the bathroom.
Perry left his office and intercepted Johnson in front of the mens room door. He looked at Johnson and
asked, What are you going to do with your accounts? It was a stupid question from a stupid man; Perry
knew that Johnsons accounts would become a feast for the pack of hyenas in the office.
Johnson looked up at Perry, his eyes brimming with moisture. He fixed Perry with a stare and shouted,
How the fuck can you expect me to make a decision like that? Im distraught, you asshole! He started to
move toward Perry, his hand closing into a fist that would be the hammer of God if it actually got to its
destination. Perry, in one of his few wise acts, moved quickly away toward the institutional desks, and
Johnson got a hold of himself.
He packed his stuff in the couple of boxes Tom Pigozzi had put on his desk with a murmured, Too
bad. Im sorry to see you go. You were one of the good guys. He walked out with his shoulders squared
and head high. The irony of walking out with two boxes under his arms just as hed walked into the Morgan
office three years earlier was not lost on him.
 Chapter 30
I Will Chase Him around the Moons of Nibia
Johnson exited 101 California Street, his career at Morgan Stanley ended, and walked to his illegally parked
car. It had a ticket on it, which he crumpled up and threw in the street. He got into the BMW and turned the
ignition key, and his emotions turned on.
All people deal with the great crisis of life differently. Some melt into a quivering ball of depression
and self-pity, some gain false bravado; others become almost catatonic. Johnson cried and screamed. He
beat the wheel of the car, and the tears rolled uncontrolled down his face. Hed let that asshole win, and
hed been fired. All the anger held in check for years at the slights and disrespect, the gross favoritism, the
constant pressure to always perform at higher and higher levels but never being told he was doing OK. The
pressures of the family he had just let down and the pressure of his own perfectionism and ego had taken
him to the emotional razors edge.
As mad as he was at Perry, he was madder at himselfnot for getting fired. He was surely mad about
that, but he was now mad at himself for crying and being a baby. He hadnt cried for years for anything.
He hadnt cried when his father died, he hadnt cried when his kids were born, he hadnt cried when Dick
Evans was killed or any of the others. In all of those terrible times, he hadnt cried. Now he was sitting in
his car in the middle of the San Francisco financial district, crying like a sissy. God, he hated himself!
The car had been running for about five minutes, and finally he pulled out into traffic. He couldnt call
Dianne to prepare her; she knew there had been a problem, but he was convinced this would kill her and
their marriage. After all, hed been fired just like some dirtbag junkie. His tears continued to flow, obscuring
his vision, and he screamed and cried across the bridge, through the maze in Oakland, up the Highway 24
grade to the Caldecott Tunnel, and all the way to Pleasant Valley Road. The tears stopped as he turned into
Summit Road.
They were replaced by something else, something new and totally silly, but in his irrational state, it was
the only answer. Hed leave. Hed drive up into the Sierras, walk into the woods, and die. Hell, he was dead
anyway; he had only ever done two things in his life: the army and the brokerage business. He had no other
skills, and he couldnt go back into the army. He was too old. Hed just been fired from the most prestigious
brokerage in the country. Hed never work in the industry again. What else was there to do? He had life
insurance. He knew he couldnt survive the bruising winters in the mountains. Some hunter or hiker would
stumble over his bones, hed be certified dead, and Dianne would have money to start a new life. The kids
would forget him over time, which was the wonder of children, and hed fade from memory. No one would
remember him, just like the loser he was.
It was cowardly, but he convinced himself it was the only move. He couldnt allow his disgrace to drag
down the chance that Dianne and the kids had of happiness. He couldnt drag them through what he knew
was going to happen. It wouldnt be fair to them.
Bert Wilcox, a bond salesman at Morgan that Johnson had become friends with, called Dianne and
warned her, so she was waiting when he pulled into the garage. He stormed by without a word. He threw
his briefcase, and it hit the wall, leaving large dent. He took the stairs to their bedroom three at a time. In
their closet, he vented some more anger on the innocent fabric of his suit, shirt, and tie. Hed kicked his
shoes off, and punted them out of his way. Dressed in jeans, a T-shirt, hiking boots, and carrying a jacket,
he stormed back down the stairs past a silent, stunned Dianne. They owned three cars, a BMW, Diannes
Mercedes 250 SL, and an old Chevy Cavalier. She asked him what had happened and what he was going
to do, and he told her hed been fired and that he was going to die. She tried to stop him, and at one point,
she grabbed a bungee cord he was holding. It slipped out of his hand, and the metal hook gouged a hole in
the back of hers. Seeing the damage, he began to cry again, this time out of anger. Finally, he had piled an
odd assortment of camping gear in the back of the Cavalier and drove off without a word. His last image
was of Dianne standing in the driveway, blood running down her hand and a look of infinite sadness on her
face.
 He drove up, always up, toward Monitor Pass and the peak of the Sierra Nevada. He saw a road leading
to the right with a sign for some lake; he followed the road to its end in a parking area. He had three days
of freeze-dried food, but neither canteen nor a pot to boil water in or a stove to heat it. He was still so
blinded, he didnt care; he was there to die, after all.
He slung the pack on his back and laid his drivers license on the dash and registration on the seat; he
locked the car and started to walk. The tectonic upthrust that had created this double-crested range had left
huge boulders, and breaking trail involved working around them. He started down from the parking area
and picked his way around and over boulders for about an hour. Panic began to rise as he realized that he
might be lost, but then his brain said, Thats what you want. Soon, granite boulders the size of houses
surrounded him, and he could see them and the skythat was all. This was getting to be a pain. Why
couldnt there just be a straight and level path to someplace he could lie down and die?
He considered how to get around, and he starting jumping from one rock to another. At his third attempt,
he fell landing on his side on the rocky ground ten feet below. He lay stunned and hurt and began to assess
all his major systems. He didnt seem to be seriously injured except in pride, and he felt very foolish. He
had blood running down one leg, and his shirt was torn. He tried to walk and his hip hurt, so he stopped.
When he felt ready, he started to move again but soon was up against another impenetrable pile of the rock
that had defied the Central Pacific Railroad for years. He turned around, seeking a route out, and noticed a
hill to his right. The hill was steep, with thin soil over the rock that slipped underfoot. He climbed on hands
and knees, holding on to small trees, and finally, after a half hour, he made it to the top. It was a flat area
about an acre in size with some trees on it and what looked like evidence of old campfires.
He looked back at the direction hed come, and for as far as he could see, there was a devils den of
boulders. He started to walk around the acre, and it seemed to be the same situation in every direction.
Finally, he found what looked like a road, and with the setting sun on his left shoulder, he knew it ran
mostly north. He followed the road for a few hundred yardsthe pack banging against him as ill-packed
ones do, blood soaking his sock, and his hip hurting more and morewhen the road turned right and he
caught sight of something gleaming in the distance. As he cleared the last trees, he saw ithis car. Hed
been climbing and hiking for three hours, and hed moved less than three hundred yards! He felt defeated.
He couldnt even commit a glorious suicide.
Hed been fired and lost his family, and now he had to live with what he had done. He stood by the car
for some time, doing nothing but standing and staring. Thoughts raced in his over fevered mind. One was
to find another way to kill himself. The other was to go back and face up to his problems like a man. He
was hating himself even more now, if that was possible. First hed cried like a baby, and then hed hurt his
wife, and now he was running away from the problems like the coward he was. Finally, he decided to just
drive.
He started the car and drove into the setting sun through the small town of Arnold, following the
Stanislaus River to the junction of 4 and Highway 49 at Angels Camp. He could have turned south on 49
toward Yosemite, or north. He chose north for no more significant reason than that he was in the right-hand
lane and the right turn was easy. Up 49 to San Andreas, Jackson, Sutter Creek, and then the junction with
50 at Placerville. Then west on 50 toward Sacramento. It had grown dark as hed sped up the roads, and by
the time hed reached the outskirts of Sacramento, it was late and he was tired.
He had no plan; he was just driving. He could barely keep his eyes open, and even in his disturbed state,
he knew he was dangerous. He didnt want to go to a hotel, so he drove to his friend Bills house. But he
wasnt going to wake Bill up at that hour, so he folded down the rear seat, unrolled his sleeping bag, and
went to sleep. His training kicked in and he woke up just before the sun rose. He backed out of the driveway
and drove off.
He drove around Northern California all of Saturday and most of Sunday, and finally, like a well-trained
plow horse, he returned to the barn. There was a BMW Bavaria in his driveway, which he parked next to.
He went into the house and found De Santi sitting in his living room.
Where the fuck have you been? You asshole! Everyone has been worried about you! Dianne had
come in and was standing in the hallway leading to the kitchen. Johnson stood silently, looking at De Santi
and not knowing what to say. His emotions were starting to play again. The sadness of his condition was
competing with the surprise and joy of seeing De Santi so unexpectedly sitting in his living room. His eyes
began to tear up, and he struggled not to cry.
I got fired, fired by that asshole. I have nothing else to do. I cant go back in the army, and I cant do
anything else. No one is going to hire some jerk that just got fired by Morgan Stanley, so I have no job. Im
going to lose the house and everything. Im finished! I went up to the mountains to try to kill myself so at
least the family would have the insurance money, but I fucked that up too! He was screaming now, pacing
around the room, swinging his arms and raging.
Eventually, Dianne and De Santi called him to his duty by reminding him that the kids were upstairs
and he needed to be at least less loud. The rage ended, to be replaced by shame and depression. It wouldve
been nice if the depressant collapse had been Newtonian, but it was deeper and longer lasting. The
depression left him meek and exposed, feeling very sorrynot for those he raged on but for himself because
hed been an ass. He also felt anger at himself for the depression, and he promised to never do it again. But
he always did.
This time, there were things to be done, and so he listened and argued with Dianne and De Santi, who
tried to convince him that it wasnt all as bad as he thought and that he was creating problems that didnt
exist. Johnson, of course, thought it was worse. His daughter came down to say good night and climbed
into his lap with her long, blond hair and blue eyes. She looked up at him and said, Good night, King
Poopoo. I missed you. Dont go away again like that. He heart started to melt.
About two hours into the discussion, they convinced him that he really didnt know enough to assume
the worst. Perry hadnt said fired; he had said Youre out of here, so maybe he hadnt been fired. With
that thin reed of hope, they developed a plan for the next day. De Santi left with profuse thanks from
Johnson, and Johnson went to bed exhausted but still couldnt sleep, as his mind wouldnt stop running
over the events of the last days. Monday, Johnson called Perry and demanded a meeting to discuss his
departure from Morgan. Hall tried to dissuade him, but said that if he wanted to come in, he could, and
would 10:00 a.m. be OK. Johnson told him that was fine and told Dianne, who suggested he not go alone.
Dianne said that she could go, and they got dressed.
They drove to San Francisco, Johnson in his best suit and a red power tie. Once they arrived and were
waiting for Perry, several brokers came out and said hello with the insincerity of those who live shallow
lives. They commented on how he looked great even though theyd seen him just two days earlier. Some
asked if hed lost weight. For the first time, he was grateful when Perry arrived and he was free of all the
bullshit. The three of them went into one of the small conference rooms, and Perry had with him a manila
folder. Johnson was surprised that Joe Eldridge wasnt there, and Perry seemed uncomfortable with
Diannes presence.
So, Perry, I assume that Ill get my normal check for my salary and whatever overage Im due at month
end? He was owed about $15,000.
Well, were going to have to look and make sure that there are no errors to be paid or other fees and
if you actually earned any overage, Perry replied with his dead-eyed look.
I had forty grand in commissions as of Friday, and at forty percent, thats sixteen grand before tax.
There are no errors, and you know it. I expect the check to be mailed to me at the end of the month.
Well see, smirked Perry.
Several months before, Johnson had met a lawyer who used to work for Shuman Agnew before Morgan
Stanley purchased the firm. The lawyer hated Morgan and wished he could get a case so he could sue them.
Johnson had gotten the lawyers card and providently found it in his suit-coat pocket that morning. Now he
bluffed. He pulled out the card and pushed it across the table, saying, Well, you know Im owed the money,
so if you try to screw me like you did on the Insel error, there will be trouble. Heres my lawyers card.
Perrys cold-fish manner broke for a second, and Johnson could see from Halls shifty eyes and jerky
movements that hed been planning to screw him somehow. Then, because Perry was a genetic asshole, the
cold and dismissive, sneering attitude returned. Lets talk about your U-four, Perry said, quickly regaining
the initiative. Just at that moment, the tension was broken by a knock on the door. The head of one of the
sales assistants came through the door without waiting for Perry to say, Come in.
 Excuse me, Perry, but I have some messages for Phil that have come in today, and Joe thought I should
make sure Phil had them before he left. Johnson got up to take the pink message slips from her and leafed
through them. There were some calls from clients he could return later. He thanked her sat back down.
Dianne said, Before we get into all the details, what are you saying to people when they call about
Phil? In addition to all of his other ills, Perry was a confirmed chauvinist and he looked at Dianne like she
didnt exist, so Johnson repeated the question.
Weve been telling them youre out of the office, but after I file the U-four, Ill have to tell them youre
no longer with the firm, Perry replied, which was about the first true thing hed said. I have some other
meetings, so we need to talk about the U-four.
The U-4 is similar to a military record. It contains information about past residences, registration tests
taken, certifications, and disciplinary history. Each time a broker left a firm, his former firm had to fill in a
section about why he was leaving. It was an important document, and one with a lot of bad marks would
condemn the broker as damaged goods. Johnson already had the Bette Woodward lawsuit on his record,
and it would be there forever. Now his U-4 was going to have some explanation for his departure from
Morgan Stanley. The firms had considerable discretion in the language they used, so it was worth the time
to try to get it to read as favorably as possible.
So what are you going to say? asked Johnson, regretting his bluff with Hall about the lawyer. It would
make Perry harder hearted, if that was possible.
Because there was a customer complaint, we have to say that you were allowed to resign.
This hit Johnson hard; it was a scarlet letter that would automatically close doors for him. The
complaint was settled between us. It didnt go to anyone outside the firm, so why the allowed to resign?
You know what that will do.
It did go outside the firm. After the meeting with the client, Joe OConner and I felt that we had to
send it to the Exchange and the SEC since it could still result in a lawsuit.
Thats bullshit, Perry. He was satisfied to have the money, and it wasnt going anywhere. And you
told me you were going to get a release. Johnson was getting mad. There was no reason other than just
meanness for Perry to have forwarded the complaint.
We felt we had no choice, and since we sent it forward, we have to say that you were allowed to resign.
Its not so bad. When your next firm calls for an explanation, well be aggressive in explaining what
happened. You wont have a problem finding a new place, and youll be happier there, Im sure. Perry
said this last in a patronizing tone that made Johnson want to punch him.
Johnson was deflated. Theres no way youll reconsider?
No, its out of my hands. And I have to go. It was good to see both of you, and good luck in the future.
He got up and stuck out his hand. Johnson took it and administered a bone-crushing handshake. Perry
winced but didnt try to pull away.
He had Dianne drive home as he went through the pile of messages. Some were from clients, but others
were from brokers in the office who told him that his accounts were safe with them and that Perry was a
prick. There was one from Tom Pigozzi telling him that none of his accounts would be transferred to anyone
in the office for at least thirty days; all the paperwork had been lost.
Johnson went into planning mode. At home, he retreated to his desk and started making a list of the
firms he was going to talk to. Most of the major firms had offices in San Francisco, so there were plenty of
targets. He decided against returning to a wire house; the competition between the offices was too intense,
and some of his clients had accounts at the big firms, and that would set up a conflict. There were the private
firms like Goldman Sachs and Lehman, who were the largest; then there were smaller, private companies
like L. F. Rothschild, Hambrecht & Quist, and Robertson Stephens. There were some really small, very
regional firms, but Johnson was convinced that he needed a bigger firm with more national clout, given his
tribal and restricted-stock work.
He also decided to get a jump on Perry and called some of his best clients to let them know hed left
Morgan. He lied and told them hed had a dispute with the office manager and didnt feel he could continue
to work there. He found out that the Perry lickspittles were already calling and soliciting the clients. He got
a call from one of the tribal lawyers, who was concerned because he and Johnson had been talking with
Morgan about the possibility of doing tribally issued municipal bonds. The clients were very supportive,
and some gave him suggestions about places he might find attractive to work. He called a friend of his who
had been with Morgan Stanley asset management but had left because, as George said, most of the people
at Morgan would be challenged to be simple scriveners. George took some time to listen, as he always did
when he and Johnson talked, and after asking a few questions, he made a suggestion.
It has been said that when a person reflects on his life, he should have no regrets about the choices he
made, because, after all, he made them. Johnson had tried to live by that axiom but failed because he kept
going back to things of the past and saying, If Id only said this, or If Id explained myself better, or
If Id pushed the reserve fuel on the helicopter, so-and-so might still be alive. His memory was his worst
enemy. He remembered everything; worse, he relived everythingalways to his detriment. He could never
get past his recrimination that he could have done better and that most of his life had been a series of second-
rate accomplishments. He strove to be the best, but when he wasnt, he lacked the mental grace to forgive
himself. He didnt take Georges suggestion, and over the years, hed realize that this might have been in
the top five worst decisions of his live.
What George suggested was that he establish himself as an independent money manager. Phil, look,
George started, and Johnson knew the phraseology as the beginning of a philosophical lecture, from what
you tell me about your business and from the tone and content of your questions over the last few years, I
can tell that you are really at odds with the nature and direction of the sell side of our business. Brokers
were called the sell side; those who purchased the product were the buy side.
The sell side is full of salesmen. Their job is to move product and to get someone else to buy the latest
junk. They dontand, in fact, cantcare about the customer. To them, the customer is a vessel to be
filled, and, once filled, to be emptied so it can be refilled. Theyre not concerned if the client makes money;
thats the clients responsibility. Their motto is caveat emptor.
What you should do, Phil, is to leave the sell side and go to the buy side. Youre mentally already
there, as demonstrated by the way you approach the business. Johnson asked George for clarification of
that point. What you do is to explain to the client the rewards and most importantly the risks of the
investments, and to do that, you have to understand the investment and the forces affecting it. The really
good sell-side guys, the ones who generate the most commissions, dont understand what they sell. They
just learn enough to move the stuff.
They talked for a while longer, and Johnson was thankful for Georges input. It made him feel like he
had some control and at least an option rather than it being him against the cruel world. What George also
told him was that because of the government regulations in the 1970s, pension funds were having to put
money out to independent managers. George believed that a good manager could raise hundreds of millions
of dollars and that if Johnson could parlay his Native American business, he could almost force the funds
to give him money. Hed be collecting fees, which came in steadily, reducing the variations of income from
commissions.
What George was suggesting was a huge decision. It would require totally jumping off the end of the
pier into deep water with no life preserver. If he failed, it would be unlikely hed be able to go back to the
brokerage industry. And, hed have to retake the Series 7 registration exam. His only capital would come
from his own pocket. And did he have the right to put the family at risk?
He temporized, one of the hallmarks of his life. He decided to go interview while thinking about the
sell side. He knew deep inside himself that he was doing it out of fear: fear that he wasnt good enough,
fear that hed be rejected, fear. Fear of himself, really. The fear didnt paralyze him; he rationalized it away
by saying that he needed more information and to do some research. But he was afraid to try, because it
was new and unknown. Most people, when faced with an unknown turn of events that present risk, will
revert to something familiar and safe, which is the reason the great mass of people, as Emerson said, live
lives of quiet desperation. He first called Goldman Sachs because he figured it would be great revenge to
end up at the biggest competitor of Morgan Stanley.
As usual, Johnson was five minutes early to the Goldman offices. The manager made him wait ten
minutes. Johnson was so nave, he didnt recognize it as an interview technique. The manager, David Lieb,
was a self-assured man of about forty-five who, surprisingly, didnt have a private office. He explained that
Goldman preferred all its personnel to be in touch with the capital and trading desks, so the office had large
numbers of small conference rooms for private meetings. It was into one of these he ushered Johnson.
The manager asked what Johnsons last twelve months were, referring to his gross. Johnson replied that
it had been about $400,000, and Lieb asked how long hed been in the business, seeming disappointed when
he heard it was ten years. They talked about his business, and there was a significant moment of
uncomfortable discussion when Johnson described his relationship with the tribes and that all the tribal
money was handled by discretion.
Discretionary trading authority means that the broker or investment advisor doesnt have to call the
client before or after doing a trade; he exercises his discretion. Most brokerage houses were very stingy in
allowing discretion, because, they said, it increased compliance costs. Really, though, it was because they
didnt trust their brokers to do the right thing and because, if the trades were nondiscretionary, the firms
could shift the blame for problems to the client.
Dave Lieb informed Johnson that Goldman didnt allow discretionary authority and the best that could
be allowed was that Johnson could act during the day but every night had to call the client and get a sign-
off on the trades. He left it open as to what would happen if the client didnt approve the trade. This posed
a problem, because dealing with the tribes was a different beast. There was often no single person or even
group that Johnson could talk to daily, and even if there had been, they probably wouldnt understand what
he was talking about. His heart sank at this point, because without the tribes, his gross would be way down.
Johnson left it on a positive note. He used the presumptive close by saying, When Goldman hires me,
we can work something out. Lieb said they would discuss it and get back to him, meaning hed call the
SEC to get Johnsons regulatory file, and also Perry Hall. Johnson walked out, not realizing that he was
about to be hit by a photon torpedo.
The next morning, he was getting ready to drive to the city for his interviews with two other firms when
Lieb called. Phil, I thought about our conversation, and I really dont think theres a place for you at
Goldman. The type of business you do just doesnt work with us. But youll land somewhere, and good
luck.
People who had higher self-esteem than Johnson wouldve argued with Lieb to try to change the
decision, but not Johnson. He was crushed, and he couldnt even argue. He mumbled a thanks and hung up.
He considered cancelling the other appointments, but Dianne beat the crap out of him verbally, telling him
to suck it up and stop being a baby and that one rejection didnt mean the end of the world. So off he went.
His next interview was with Alex Brown and Company. Alex, as it was called, was the oldest brokerage
firm in the United States, having been founded in 1800. It had been a high-quality regional firm in recent
years and had begun to expand, becoming very active in underwriting technology companies. It had
established an office in San Francisco managed by a fellow named Ralph Parker. Ralphs nickname was
Perfect Parker. He dressed in expensive, hand-tailored suits and English bench-made shoes. His ties and
vests were always perfect, never askew or untucked. His hair was always perfectly cut and neatly combed.
It never moved in any kind of wind; it was like a helmet. He drove a classic Mercedes that was always
immaculate in all weather. In fact, Johnson once quipped that when it rained, the water divided above
Ralphs head and fell on either side; none ever wet him. He and Perfect had actually worked together at
Morgan, but they hadnt been friends. However, when Perfect left, he told Johnson that if he ever left
Morgan, they should talk.
One time, though, Perfect had taken Johnson down to his ranch in the Salinas Valley to hunt wild pigs.
Johnsons skill in shooting was sorely tested by the fat-assed pigs because they moved so fast. Finally, just
before dawn, hed hit one with the rifle Perfect lent him, and he was happy.
Perfect was glad to see him today, but it wasnt the hail-fellow-well-met greeting Johnson had expected.
They talked for a while, and Johnson finally said, Ralph, Id like to join the firm. You know I have
knowledge in the restricted-stock area, and with Alex moving into high-tech banking, that could be very
useful. I also have some really good contacts at some of the venture firms.
Parker he hemmed and hawed, looked around, and then said, Well, I think we have the restricted-stock
thing covered and were all over the venture firms, so youd be coming here as just a retail broker He
didnt finish the statement, just left it hanging in the air with pregnancy. Ill talk to the folks in Baltimore
and get back to you.
Johnson was disappointed but not discouraged. He knew Perfect to be a careful man. Johnson left and
met a couple of former Morgan colleagues, Wilcox and Hulka, for lunch before going to talk to Hambrecht
& Quist. The two Morgan guys said that Hall was still a total asshole but that the fellow who had been the
partner in charge of investment banking had left and now Hall was running the whole show. Johnson
commented that Hall had risen to his level of incompetence, and Hulka responded that Hall thought a bond
was something you used to get out of jail.
He wandered off to meet the manager of the Hambrecht & Quist office. H&Q, as it was popularly
known (brokers not wanting to waste a syllable because pronouncing it might mean making less money)
was legendary in the area. It had been started at the end of World War II and had risen to prominence by
investing its partners money in the high-tech startups of Californias booming economy. Once theyd made
their investment, H&Q would grow up with the company by offering to help raise money and making
contacts. Bill Hambrecht and George Quist probably sat on more boards of directors than any other people
in San Francisco.
The firm had never expanded beyond its office in San Francisco, though, and its sales force wasnt
huge, so it lacked the clout to handle the public-stock offerings, and it didnt have the great number of
hungry salespeople to slam the stock to endless hapless customers. H&Q would partner with one of the
bigger firms on each deal, giving the larger firm the left side of the prospectus reserved for the managing
underwriter. Since the managing underwriters made more money, being able to appoint who would be on
the left gave H&Q power far above what its size implied.
Johnson had been competing with H&Q for years in the restricted-stock area and had run across their
investment bankers. He knew that H&Q needed some horsepower in restricted stock, and in the past it had
been broadly hinted that he should consider joining. Secretly pleased, he had, however, demurred out of his
loyalty to Morgan. He was expecting that the interview now on the table would result in a job offer and that
once Perfect Parker had gotten the go-ahead from Alex Brown, hed be able to put them in competition for
his services and be able to cut a very favorable deal.
The interview went well. The manager admitted that the company had a favorable impression of his
work and that they needed help in the restricted-stock area, and his gross commissions fit with their pattern.
In fact, it seemed almost a foregone conclusion that hed be offered a job, and it was only mildly
disappointing when the manager said he needed to talk to his boss but that they would get back to Johnson.
The manager said he looked forward to working together.
Johnsons drive across the Bay Bridge seemed easy despite the execrable traffic on that miserable hunk
of steel, and even the mess that formed on the uphill approach to the Caldecott Tunnel wasnt a concern.
After all, hed be working again soon. So when the answers came, they were crushing. He, Dianne, and the
kids had gone to a favorite restaurant, in Walnut Creek, for dinner and had a good time. On arriving home,
Johnson noticed the message light on the answering machine blinking. In quick succession, there were calls
from Perfect and the H&Q manager telling him they couldnt offer him positions.
Airplanes sometimes drop suddenly hundreds of feet, leaving the passengers feeling their stomachs are
in their mouths. His airplane had just hit two pockets, and he fell and fell and fell. The bottom of his
optimism fell out, and he entered a spiral toward the ground that increased in speed and intensity. He thrived
on information and always wanted to know all the facts on any situation. Here were two messages, each
less than one minute long, that couldnt be expanded on until the next day. What the fuck? he thought, and
not for the last time, he reminded himself not to get optimistic until the deal was signed.
He went from a period of relaxation and good feeling to depression and self-loathing. He became hyper
nervous and almost immediately, he felt gas in his stomach that he relieved with frequent, unsatisfying
burps. His bowels began to churn, and his breathing rate increased. He wanted only to be alone with his
misery, and when Dianne tried to console him, he nearly bit her head off with a snarling statement of his
worthlessness. He tried to sleep, but it eluded him. Hed yawn and his eyes would water, but he couldnt
find peace. Eventually, he got up and tried to read, but even mindless fiction wasnt enough to distract him,
so he sat into the gray of predawn, alone with his misery, his thoughts making it worse. Rather than being
able to say, I dont have all the information about what happened, so rather than rush to judgment, I need
to talk to someone and find the reasons for their rejection, he just knew that it was all his fault and that
hed done something wrong, and he was just a worthless asshole, and it was all over.
All night he wandered the house like a wraith, and by morning, hed had diarrhea so many times that
his butthole burned like hed eaten half the habanero peppers in Mexico. He was exhausted, but he wasnt
ready for sleep. He hatched and dismissed plots and less-than-half-baked ideas of what hed do: hed sue.
Hed storm in there and tell them they were liars and they needed to hire him. Hed get one of his clients
who was an executive of a company both Alex Brown and H&Q were courting to call and tell them to hire
him or they wouldnt get the companys business. All were vanity. Did he really want to force a firm to hire
him? Wasnt that a prescription for disaster? In the end, it was all games. All they did was to increase the
demand for toilet paper in Northern California and cost him a nights sleep. He was sure that no one at
H&Q or Alex had lost any sleep.
He decided that hed try something unique. It was a vain hope. He stationed himself across the street
from Alex Browns office and waited. Sure enough, just after noon, Perfect walked out of the building and
started down Montgomery.
Johnson left his perch and hurried away. He remembered that Perfect had taken him to a restaurant in
what was known as Belden Alley Row that Parker had said was his favorite. Johnson made the guess that
Perfect was headed there. He walked faster and arrived first and positioned himself at the entrance of the
Alley. Sure enough, along came Parker about two minutes later. Ralph, I need a minute, began Johnson
in an authoritative voice, positioning himself in front of Parker so hed have to force his way by.
Phil, I have a client waiting. There was nothing I could do. Baltimore doesnt want to expand the office
with more brokers. They think the costs are too high, and they want to see more business first. Parker was
lying, and he wasnt good at it.
Ralph, weve hunted pig together. Weve known each other a long time. You at least owe me the truth.
Alex is out recruiting brokers, so I know that they do want new people. What really happened?
Parker was clearly distressed by the confrontation, and like a lot of successful people, he really didnt
like to be caught in a lie. He shifted his weight. He looked down and then up and to the right before he
spoke. Phil, Id have thought that after all youve gone through with Hall that youd know not to trust
him. With that statement, Perfect pushed by Johnson and disappeared down the Alley with only a brief
look back to see if he was being followed.
Phil stood there for a minute, thinking, What the fuck did that mean? Hall had told him and Dianne
what language Morgan would use, and that was the story line Johnson was using in his job search. What
was Hall doing now? He spied a pay phone and dialed the Morgan office number from memory. One of the
rotating cast of receptionists answered and asked him to hold while she connected him to Mr. Hall. Johnson
gave a sigh of relief that she hadnt asked him his name.
He looked at his watch and realized that hed timed this perfectly. Normally, Kathy Tealdi answered
buttfaces phone, but she left for lunch every day precisely at noon and was gone at least forty minutes. A
few seconds later, he heard, Perry Hall.
Perry, Phil Johnson here.
Hi, Phil, how is the job search going?
Perry, what are you saying to these office managers when they call about why I left Morgan? He was
struggling to contain his anger, but it was hard, and he was sure some of the venom he felt was leaking
through.
Well, were telling them the circumstances, and apparently, youre not, so Id suggest you tell them
the whole story. Then we can get aggressive, was the reply.
What do you mean the circumstances? You agreed with me as to what language we would use, and
thats the language Ive been using. Now you tell me that youre saying something different?
Were telling them the truth, and youre not, so is it any wonder they wont hire you? Johnson was
ready to scream at this supercilious motherfucker, but he was so crushed by the betrayal that the words
stuck in his throat. Hed been silent for a few seconds before he heard, Are you still there, Phil?
 Yeah, Im here. I am frankly having a hard time understanding why youve decided to violate the
agreement you made with me in front of my wife. At least if the language had been changed by legal, you
owed me a heads up.
I dont owe you a fucking thing! Neither does Morgan Stanley! Each phrase came staccato. You
were a miserable jerk when you were here, always scheming against me and not playing with the team. I
told you at the very beginning I didnt think you had the stuff to be a broker at Morgan or anywhere else,
and you proved it. I gave you a lot of chances, and you fucked up. Im not going to help you get a job, and
if I get calls from managers, Im going to tell them what a fuckup you are, and Im not going to stop. If you
get a job in the brokerage industry, Im going to do everything I can to make sure your new firm understands
what an asshole you are.
Johnson stood there in the street with the now-dead phone to his ear, the dial tone and Perrys curse
ringing through his brain. Im truly and totally fucked, he thought.
Johnson had a previously scheduled appointment with the manager of the LF Rothschild office another
firm that needed restricted stock help. He decided to make a clean breast of it with the manager, and when
he completed the story, the manager escorted him from the office without a word.
He looked longingly at the Golden Gate Bridge from outside the Rothschild office and thought how
easy it would be to jump. His thoughts ran that way until he hit the hard stop that suicide might be painless,
but it eliminated life-insurance payments. Hed fucked up enough that he couldnt deny the family the only
asset he had left.
The urge to go and get roaring drunk was very strong, but he fought it and drove home to tell the
miserable tale. His irritable bowel kicked in on the bridge, and he wondered if he could make it home before
his guts exploded. The cramps almost doubled him over in the drivers seat. He needed to find a john, and
fast. Those who suffer from IBS keep mental maps of bathrooms, and they learn all the tricks to find them.
This time there was nothing nearby, so he wheeled off the freeway into the maze of streets that is the
boundary between Oakland and Berkeley. The cramps were coming faster and harder as he pulled into a
Shell gas station. He ran in and got the key to the restroom, which was attached to a fourteen-inch wheel,
and he dragged it to the john. As he opened the door, he wondered why they locked gas-station bathrooms.
Were they afraid someone would clean them?
He had little time to ponder deep questions. The place was so filthy that he wasnt going to sit on the
stool, so he whipped off his pants and underwear and stood on the edge of the seat and bomb-sighted,
mostly successfully. After the usual waiting for the follow-on rush, he redressed and left. He shuddered to
think what was on the bottom of his shoes and now on his cars carpet.
After he got home and told the story, Dianne suggested they go to a movie to get his mind off his
troubles, and they went to see Star Trek II: the Wrath of Khan. Johnson had been a huge fan of the original
series and remembered the episode that spawned the movie. When Khan utters the lines promising revenge
on Kirk, saying hell chase him around the moons of Nibia, Johnson thought, I have a Khan. Now maybe
Ill have to kill him to end his revenge.
 Chapter 31
Grizzly
At parties, after a brief period of general interaction, people will segregate themselves along social,
financial, marital, or occupational lines. If the attendees are all from the financial industry, to a practiced
eye, they are easily identifiable. Against one wall, away from the booze but near the food would be a small
cluster of men of the kind you see daily but who dont register with any distinction. Dressed in nice-
appearing if slightly ill-fitted suits, their shoes would be department-store brands, a bit down in the heel,
and not polished well. Some would have longish and slightly unkempt hair; there would be a few mustaches
and beards. There are no women around them, and they seem totally engrossed in their own conversation.
These would be the Dean Witter, Bache, Hornblower, and Paine Webber guys.
Closer to the booze and women would be a few men in better-fitting suits, some almost painfully tight,
purchased years before the wearer gained weight. The suits are mostly dark pinstripes, but a few are light
gray. They scan the room occasionally like falcons looking for prey. Theyre a bit loud when expressing
greetings and telling stories. The wives of this group struggle to be stylish, necklines revealing more breast
than necessary, but hiding hips spread by childbearing. The men arent as interested in themselves as they
are in who else is there, and they are definitely on the hunt. This group is from Kidder Peabody, A. G.
Becker, Oppenheimer, and A. G. Edwards, still wire houses but of a better kind.
Right on top of the booze is a group of men who are well, if flashily, dressed in light-colored suits with
subtle check patterns. Their shirts have white collars and either striped or solid bodies or monogrammed
collar, breast, and cuff. Ties are expensively loud, often solid colors, contrasting with the shirts. Those who
wear glasses have lenses with a pinkish tint to them and gradations of shade from clear to dark, which might
be a reflection of their business methods. They are very clannish, and they cluster together without wives.
There is a constant battle to be alpha. They feign nonchalance but are painfully aware of the room and their
place in it, making sure others know they are a presence. When you talk to these men, you come away
feeling a sense of unease that you havent been told everything. Although a good number arent Jewish,
their firms, Lehman; Kuhn, Loeb; Loeb, Rhoades; Shearson; and White, Weld almost all had Jewish roots.
The wives of these men are separate but active, not to help the hostess but their husbands careers. They
gossip, and when really ripping someone apart, they hold their hands in front of their mouths. They are
always trying to engage the wives of the better wire-house men in conversation, centering on the husbands
business. They are scouts looking for people to join their husbands firms.
At the other end of the bar stands a tall, patrician-looking man, six feet tall at least, in a well-made and
well-fitting gray suit, white shirt, and red-striped tie. He is topped by a full head of grayish-white hair,
perfectly cut and controlled. His face bears tribal markings: the red nose of the frequent drinker and the red
cheeks and burst blood vessels of the Irish. His perpetual smile and sunny disposition make him magnetic.
You cant help but like the guy. His mixture of confidence and arrogance dont put anyone off. Hes quick
with a joke or story, and if permitted, he has a cigar in either his mouth or hand. If smoking isnt permitted,
he still has a cigar with him, feeling its easier to ask for forgiveness than permission. He is, of course, from
Merrill Lynch.
A bit farther away, just far enough to demonstrate that distance reflects his exalted status, is a tall,
reserved, man, a bit overweight, complexion pasty from long hours indoors, controlling his environment
by denying his involvement. His clothes are very expensive but not arrogantly so, shirt cuffs one inch
beyond the sleeve of the jacket, the jacket seeming to move with him like hed been born in it, shoes
gleaming with frequent professional polishing, tie an expensive Italian silk. If the party is more casual, he
might indulge in a colored pocket square, but if there are potential clients about, hed have a white
handkerchief perfectly folded with the top edge exactly parallel to the pocket edge. He looks fairly bored,
seeming ready to leave and coiled for other ventures. He just knows hes better than anyone else. Reserved
and controlled at all times, hed nurse a white wine or mixed drink all night. No excessive drinking for this
man from Goldman Sachs.
 Nearby Goldman would be a man in gorgeously expensive suit, shirt, and tie that scream success and
wealth. His nose is always turned up as if in disdain, but his eyes are constantly shifting. Imperially thin,
he is perfectly dressed: never a hair out of place, no dandruff on his shoulders, or lint on his sleeve. His tie
never seems to move regardless of his body movement. He has the look of an upper-class Englishman with
all of that breeds prejudices and contradictions. Underneath the expensive suit is an equally expensive
shirt, worn without a T-shirt as if to say, I dont care if I sweat through this three-hundred-dollar shirt. I
have plenty. Hed also be clad in suspenders (or braces, as he calls them), and his shirt cuffs are adorned
with cuff links bearing the crest of some expensive college or prep school. He makes it obvious by his
separation and bare acknowledgment of others that he is superior. His wife is the social butterfly and would
and could mix with anyone while her husband stands aloof. Theres someplace hed rather be.
Any interaction with others is perfunctory and noninformative. This is a person who uses information
only for his own benefit, and what he is doing is more important than anything anyone else might be doing.
He works long hours, home only on the weekends where life revolves around the right sports: football as
long as it its Ivy League, lacrosse, sailing, squash, and, of course, downhill skiing. His children had the
best clothing and went to the best private schools, would never do anything less than first rate, and were
the best athletes, students, and so on. His life focused closely on the firm, and all else was secondary. No
Copernican, he was, ironically, more papal: the world turned around him. Hed made it. He had the right
blood to be a Morgan Stanley partner.
Near the door is a lone figure in an aggressive pose, perhaps with one of his feet propped on the wall
behind him, and looking faintly angry. One of the reasons hes by the door is that hes smoking. If the
hostess complains, hell say that he was just going out, but as soon as she turns away, hell continue to
smoke inside, taking pride that hed misled her. While everyone else is in a suit and tie, hes wearing a
leather jacket cut like a sport coat but no tie. His pants are a heavy black denimwhat some fool would
call dress denim.
He has a lean, hungry look, his complexion showing signs of acne picked at when young but long gone,
leaving pigmentation scars. His hair is longer and is a sign of rebelliousness. In some situations, he wears
it slicked back in the style once called a ducktail. He talks to few people, and he drinks a beer from a bottle
that he deposits on a table without using a coaster. There is no wife in evidence, and he only moves to get
another beer. He looks as if hes spoiling for a fight, which he is, since he feels like an outsider and has
cognitive dissonance about that. He nurses a permanent chip on his shoulder that he romanticizes as due to
his struggles against the industrys entrenched. His education is adequate but not exceptional, but it would
be a mistake to think him stupid. Hes probably the smartest person in the roomcertainly the most
ambitious and least scrupulous. He wants to be rich because he believes that if he got rich, others would
have to include himand if they didnt, fuck them. His language is sprinkled with curse words and vile
expressions linked with contractions and sentences ending in prepositions. This semi gangster persona is
typical of the man from Bear Stearns.
Bear Stearns, or Bear, as it was known, had been started by some German Jews in the 1920s to seek
fortune in the United States. Anti-Semitism was rampant both in Wall Street and the rest of the country,
and Bear, as the new Jewish kid on the block, had to scramble and ended up taking business rejected by the
upper-tier Jewish firms and clearly far beneath the mighty WASPs. As a small partnership with limited
capital, Bear didnt have the luxury of holding securities positions, so a highly efficient, if brutal, trading
mentality developed. Bear would run over everyone, including its own clients, to get something done, but
the clients accepted the treatment as part of the game.
Tightly run and managed, Bear survived the 1929 crash and the Depression. It prospered during World
War II and in the great bull market following the wars end. As it entered its double-nickel-year anniversary
in 1984, it remained a partnership; many of the other firms had been forced to either sell out to pay off
retiring partners or convert to public ownership. Reputations on Wall Street are easily developed and only
with supreme difficulty changed. Goldman and Salomon had started in areas that no self-respecting Wall
Streeter wouldve touched; they wore their Jewishness proudly, with beards, yarmulkes, and sometimes
Hasidic curls. Over a hundred years, both firms came to be an accepted part of Wall Street, and their humble
origins were forgotten except to a few historians. Bear hadnt had sufficient time to reform its reputation;
it became its hallmark, and Bear wore it proudly, if with a touch of conflicted psychology. Wall Streets
use of rude and cutting humor is legend, and it was said that the two shortest books on Wall Street were the
list of Negro partners at Morgan Stanley and the Bear Stearns compliance manual.
Phil Johnson wouldve never used the words racist or anti-Semite to describe himself, In fact, hed have
bristled at the mere suggestion that he was thus afflicted. But over his ten years in the brokerage industry,
hed simply come to accept its view of the separation values that dominated itnamely that there was just
something different about the Jewish firms and particularly about Bear Stearns. Bear hadnt been on any of
the lists of firms hed bless with his presence, except when he joked, If all else fails, theres always Bear
Stearns!
It had been two weeks since hed left Morgan Stanley, and hed faced a solid wall of rejection by the
firms he wanted to work for. Accepting rejection had never been his strong suit, and the thrashing he was
taking was tipping him into depression. Johnson wouldve denied it, but in the last ten years, hed grown
dependent on the cut and thrust of the brokerage business, the adrenaline rush, and the stimulation of money
flowing like water from the customers to him via commissions. He needed to work, not because he and his
family were starving but because he was withering away not working. He found himself sleeping late and
not caring about his appearance. Hed lie around the house, doing nothing but watching endless stupid
reruns on television. He started drinking. His conversations became less and less productive, more clipped
and dismissive. Never patient with those who didnt understand, he became even less open to talking and
educating people. He just wanted them to leave him alone. The best thing about the retreat was that his
bowel problems were virtually gone, and for the first time in years, he didnt feel hed be sick at any moment
all the time.
His primary targets exhausted, he started to realize that he might have to change tactics and attitude.
Hed been approached by some of the regional firms like Sutro, which traced its beginnings to the Gold
Rush, but hed rejected them as beneath him. His arrogance, like all arrogance, was undeserved; he was
only a pimple on the ass of Wall Street, and he was giving himself airs like he was the pinion gear in the
transmission. He was at the beginning of the third week without working, and so far his friends at Morgan
had maintained his book pretty much intact, when he got the call from Reed Freyermuth at Bear Stearns.
Johnson and Reed had never been friends or even really acquaintances. They had seen each other, but
other than the obligatory head movement in recognition and perhaps a Hi, Reed, how you doing? they
had no conversations of any length.
Reed held himself above everyone, and while that was genetically bred into Morgan Stanley people,
Reed was not Morgan Stanley people. While formerly employed by Morgan, he had done a lot of business,
but Johnson had always had the impression it was in low-quality stocks and with people afraid of the light.
Reed was pompous, often wearing a blue blazer with a large and colorful patch on the breast pocket. He
also had the uninterested and sleepy look of a person whos not interested in anyone else. Johnson suspected
there was a real violent streak under the preternaturally calm exterior, maybe even a drinking problem.
Reed used words like indeed, said with a flat tone of voice, and really, with the tone rising at the
end so it came out a question. There are secret languages, and when an arrogant man like Reed used these
words, it meant he didnt believe you. Hed never get into an argument by calling someone a liar; it was
easier and somehow clubbier and elitist to insult others using simple words in such a way that the hoi polloi
wouldnt take offense.
Reed had left Morgan in some controversy a year past. The story had gone around that Reed had
somehow gotten involved with some operators whom Morgan Stanley considered shady. In one case that
was heavily documented, Reeds customer, a corporate raider from Minneapolis named Irwin Jacobs, had
used Reed to purchase a block of stock. When Morgan found out that Jacobs was the purchaser, it broke
the trade.
It was once said that a verbal contract wasnt worth the paper it was printed on, but on Wall Street, that
wasnt the case. When a seller told a buyer he was done on a trade, it was an enforceable contract. It was
one of the holy of holies on Wall Street: done meant done. Ironically, Morgan had accused Jacobs of not
complying with the specific performance of a contract in a merger in which Morgan had represented the
client. The highly moralistic but endlessly hypocritical Morgan Stanley was doing exactly what it had
accused Jacobs of doing. Reed was upset because hed lost a large commission; Jacobs was furious because
hed been made a fool. It was so unusual that it was documented in the Wall Street Journal. Morgans
response was that there were people it did business with and those it didnt, and Jacobs was one of the latter.
That was supposed to be the last word.
Now Reed had reached out to Johnson, asking him to come to the Bear Stearns office for an interview.
Johnson had serious trepidationsfirst, because it was Reed, whom he didnt trust, and second, because it
was Bear Stearns. He was, however, getting desperate. He knew that the longer he was out of work, the
harder it would be to get hired. Johnson knew that for his own self-worth, he needed to get back to work.
The window of opportunity for Bear opened up.
The Bear Stearns office was at 333 Market, one of those nondescript, square towers of subfusc material
and glass that litter the landscapes of cities. He rode BART in and came up from the Montgomery Street
station. He rode the elevator to the eighteenth floor, walked up to the receptionist, and waited. She looked
at him over half glasses while she talked to someone on the phone about her daughter. The phones were
ringing, but she talked on. Finally, she gave him the raised index finger meaning just a minute. Soon, she
finished her call and directed several others in a brusquely efficient way before addressing him. He gave
her Reeds name and then waited some more. Several other people came and went, giving him a quick
once-over as they passed, and eventually, Reed appeared. His sleeves were rolled to the elbows and his tie
was askew with the same arrogant look. Reed led Johnson around the banks of offices to his own near the
southwest corner.
Johnson sat in front of Reeds desk. He was unhappy with the arrangement, but there was no place else
to sit. Reed began almost immediately vaporing on about the greatness of Bear and justifying his departure
from Morgan. Making the interview all about Reed seemed a poor way to go about hiring. Like most people,
Johnson got bored quickly with another person talking only about himself. Reed went on and on about some
shares of a piece-of-shit stock called Yuba Gold that one of his customers wanted to sell, and no other firm
could do it, but Bear had gotten it done on the Amsterdam exchange. He finished with that line and looked
expectantly for Johnson to pay appropriate homage, seeming miffed when it wasnt forthcoming.
Johnson seized the opportunity to start asking questions about restricted stock, commission payouts,
prospecting areas, and middle-market coverage. Reed waved most of them off with the aplomb of a
salesman, using clichs and nostrums. Johnson was getting a bit pissed. He wasnt getting the answers he
needed. Finally, the phone rang, and Reed answered. Yeah, hes here. Yeah, be there in a minute, and
then he stood and announced they were going to see Gary.
Garys office was next to Reeds in the corner. It was spacious, with windows on two sides, and Gary
sat at a desk backed by a tall set of bookcases facing the south. He was on the phone when they entered,
and while they waited, Reed picked up a golf putter and began to putt across the carpet to a mechanical golf
hole. He made five of the eight balls. When he was finished, he handed the club to Johnson. Johnson didnt
play golf, but he realized this was a test. He thought he could probably putt well, and hed watched Reeds
balls as they rolled, so he thought he knew the break in the carpet. He took the putter and addressed the first
ball. Gary was still on the phone but had stood and was watching Johnson. The first ball was spot-on to the
cup and was followed by numbers two to seven, and then he missed the eight. Reed looked at him, and
Gary, who had finished his call, asked, Do you inhale or exhale before you putt?
Johnson had no clue what to answer, so he replied, I dont breathe. Both Reed and Gary seemed
impressed. To Johnson, the act had seemed ridiculously easy. Gary was about five feet, four inches, with
the aggressiveness that comes to smaller men. He was obviously in good physical shape, lean, well dressed.
The Star-of-David paperweight revealed the religion he practiced. Gary waved Reed and Johnson to chairs.
So, Reed tells me you got fired by Morgan Stanley. I hope they continue to fire guys like you two.
Reed has been a great addition to the office, and Im sure you will be also, Gary began.
First, lets get one thing straight, Johnson interjected. I wasnt fired by Morgan Stanley; I was
allowed to resign after management believed a client story that Id falsified a trade confirmation.
You can argue about the words all you want, but they forced you out and you havent been able to
find a job at another firm, so for all intents and purposes, you were fired, regardless of what the U-four
says, was Garys statement, which seemed to brook no response. He was quick, this one.
 OK, all that will come out in the wash, said Johnson. Tell me about Bear Stearns and the office, he
said, trying to regain control of the conversation.
What do you know? asked Gary.
Well, Ive heard all the stories and jokes about the firm, and the firm seems to have a certain reputation
for aggressive dealings.
What stories?
What are the shortest books on Wall Street? Negro partners at Morgan Stanley and the Bear Stearns
compliance manual. He regretted the words instantly; they were both racist and demeaning to the people
who might give him a job. Gary looked him straight in the eye for a second and then turned to his phone
and pressed a button and then the switch to activate the speaker.
There was one ring, and a very New York female voice answered, Mr. Greenbergs wirethe last
word coming out as wa-year.
Alan Ace Greenberg was president of Bear Stearns, a magician, and a competitive bridge player.
Although he was a legend in the industry, Johnson himself had never heard of him. Now, he apparently was
on the phone to talk to Johnson about a job at Bear Stearns. Johnson felt sick at his stomach because hed
made an impolite and rude joke about the firm he was going to work for, and itd been so embarrassing that
Gary felt the need to get the president of the firm on the phone. A few minutes went byactually seconds
and Greenberg came on the wire.
Alan Greenberg, spoke a surprisingly clear and unaccented voice.
Ace, its Gary; Im sitting here with Reed Freyermuth and Phil Johnson. Phil left Morgan Stanley
recently and is thinking about joining Bear Stearns, but he has some questions and some concerns, and I
thought it would be best for you to answer them.
Hello, Reed and Phil, said Ace. So, Phil, what are your questions about Bear Stearns?
Well, Mr. Greenberg, began Johnson, there are a lot of stories about Bear Stearns and about how it
doesnt necessarily play by the rules and always seems to be skirting the edges of law. Im not interested in
being associated with a firm that doesnt have the highest standards. I wonder if you could address that?
First of all, its Ace, not Mr. Greenberg. People only call me Mr. Greenberg when theyre in trouble.
I dont know what youve heard, but youve been in the business a few years, and surely you know that
there are lots of rumors about every firm. Even Morgan Stanley has secrets and done things no one is proud
of. Bear Stearns doesnt criticize other peoples business, but we understand they may criticize ours. And
we dont care. There was a pause, and Johnson could hear what obviously Greenberg was taking a puff on
a cigar. Then Greenberg continued, The way we run things is, each person is an independent businessman
who chooses to make his office at Bear Stearns. The standards that you show in your business will be your
standards. Well supply you with a place to work and things to help you get your job done; you have to
supply the character and the honor. Yes, there are those who work at Bear Stearns who have had trouble
with regulators. In some cases, the person is still here; in other cases, theyve been sent packing.
Johnson was somewhat stunned by the honesty of Greenbergs response. What I do is I work with a
lot of Indian tribes and a lot of restricted-stock transactions. How is Bear going to support me in those
areas?
I think the best way to get started, Phil, said Ace, is for you to have a discussion with Gary about
your book and the kind of business you do. If we can find a way to accommodate the business at Bear
Stearns, well do so. Feeling better?
Yes. Thank you, Ace, for taking the time to talk to me, and Im sorry if I gave any offense with my
remarks. Johnson was deeply ashamed of himself. He was obviously talking to a man of some honor who
was proud of his firm, and here was Johnson, almost a beggar for a job, insulting the place. What a dork I
am, he thought.
He, Gary, and Reed spent another forty minutes talking about his business and, of course, what his
gross commissions were. They seemed impressed with the mid-four-hundred number, and Gary said, If
you can repeat it, youre likely to become a limited partner. Johnson had no idea what it meant to be a
limited partner, but it sounded importantmore important than the usual vice-president title that was
handed out in brokerage firms like candy at Halloween.
 Johnson left with Reed saying, Gary and I will get together with Bob Mu, who is the managing partner,
check with Morgan Stanley about your record, and get back to you. Johnson thought for a moment whether
he should say something about how much he wanted to work at Bear Stearns but decided it would be
patronizing and said nothing except a thank-you.
The next day he got a call from a woman named Rosemarie Barrett, who explained that she was the
compliance officer for the Bear Stearns office in San Francisco and that she wondered if he could come
into the office to talk about what was on his U-4. Johnson had nothing else to do, so he made the
appointment for little later in the day. He arrived at the Bear Stearns office and was greeted by the same
receptionist (who seemed to be engaged in the same conversation from the previous day), and she gave him
the same finger. She finished her call, and he told her he was there to see Rosemarie Barrett. The receptionist
said that Rosemarie was on the phone and he could take a seat. There was no offer of coffee, water, or tea;
just take a seat. While he was sitting there, a rather chubby, dark-haired, round-faced, glasses-wearing
man came out into the reception area. He looked a bit sloppy with his wrinkled shirt and tie down and
askew. He seemed a bit haunted.
He introduced himself as David Kavrell and informed Johnson that hed been at Goldman Sachs before
he came to Bear Stearns. He told Johnson he could make a lot of money at Bear and that if he, David, could
do anything to help, all Johnson need do was ask. David left and was replaced by a short, really nondescript-
looking woman, quite plain with mousy-colored hair that actually defied color description. She carried with
her the remains of oneif his sense of smell workedof a lot of cigarettes. You could walk by Rosemarie
a thousand times and never notice her unless she fell down in front of you.
They walked back to her office, and she began to talk to him about what they were going to have to do
to get his registration moved. For the first time since hed left Morgan Stanley, he actually got to see the
language that that prick Perry Hall had put on his documents. He said Johnson had attempted a cover-up of
an error, manufacturing a false trade confirmation with the intention of giving the client a fraudulent
impression. It was a damning accusation. After he saw the language, he realized why the other firms
wouldnt talk to him.
He was suddenly thankful that Bear Stearns might be willing to take on this battle. He realized that if
hed decided to follow George Riegers advice, he never wouldve been able to get approved by the SEC.
Rosemarie suggested that Johnson call a securities attorney in New York to see if an explanation
attached to the documents might let his registration transfer. Johnson told her it had been almost three weeks
since hed left Morgan Stanley and that if he didnt find a way to contact his clients, he was going to start
losing them in droves. Rosemarie told him that the decision had been made to hire him if they could get the
registration taken care of, but in the meantime, he could work in the office and call his clientsbut any
trades would have to go through one of the other brokers in the office.
It was a clever trap, although Johnson didnt see the snare right off. If he called his accounts and his
registration didnt come through, Bear Stearns would have information on all of his clients that they could
feed to their brokers. He eagerly agreed to Rosemaries suggestion, and they agreed that hed report for
work the next day.
His first day at Bear, he was assigned on a desk in one of the calling rooms. These looked like anthills,
with row after row of brokers sitting asshole by elbow.
In the calling room, callers tried to get prospects on the phone, and then one of the brokers would take
over and begin a pitch that had been used for thirty years on Wall Street. It started off with a come-on like,
Mr. Smith, I know youre interested in increasing your wealth so that you can retire. I have an idea that
will help you do that. It was often described as putting the client in a hallway with a blind end and three
or four doors down its length. The idea was to work the client down the hall and past the doors without
letting him out until he was up against the wall and had no escape but to buy. Some of the calls and the tone
in which they were delivered, in Johnsons mind, bordered on abuse, and he wondered how anyone could
act that way with a potential investor.
The calling room was run by a guy by the name of Bill Soucy, who was a nice-appearing man of about
thirty whose office was separate from the main calling room. Johnson ended up across the desk from Soucy.
From the very beginning, Soucy started asking questions about restricted stock and how it got done, how
you found the clients, and the whole procedure.
Johnson called the lawyer suggested by Rosemarie Barrett, and they had a discussion about the
language on his registration documents. The lawyer was very crafty in that sordid, New York way and said,
Tell me the complete truth about what happened so I can make a determination of how were going to
approach this. Johnson didnt want to go through the whole thing in front of Soucy, so he asked if there
was an office where he could speak privately. For the next twenty minutes, Johnson poured out the whole
story of his misadventures at Morgan Stanley. He held nothing back. He talked about the Insel matter, the
gross favoritism, and Perry Halls unrelenting pressure. He described in detail what had happened with the
Seagate trades. In the three weeks that hed been out of work, in his usual way, hed reflected on the
situation. Hed constructed a timeline showing his actions versus the actions of the client so that a person
could follow the line and see what happened.
The lawyer listened with an amazing amount of patience until the story was over. He then had one
question. Why the fuck did you stay there?
Johnson didnt have a good answer. He gave a lame excuse that he wanted to do a good job and prove
that he was a Morgan Stanley man. The lawyer snorted in derision of how stupid it sounded. He asked
Johnson to write an explanation of what had happened but said not to include his timeline; in fact, his advice
was to destroy it. For the rest of the day, Johnson sat at his desk writing, rewriting, adding, subtracting,
erasing, and cursing until he filled two pages. Then sent it to New York via the high-speed fax service being
offered by Federal Express.
The next day, the lawyer called and asked that he go someplace where they could speak alone. Johnson
wandered into an empty office. The lawyer told him that yes, Perrys language had been far too severe and
placed too much of the blame on him. The lawyer also said that the correct way to approach this was for
Johnson to admit an error in judgment, deny any intent to defraud, and say that his only intention was to
clarify the situation for the client, and then ask for mercy. The lawyer pulled no punches and told Johnson
that the New York Stock Exchange could be very harsh. The conversation dashed what hope Johnson had
allowed to develop, and he started to plunge into his circle of recrimination and all the bad things that were
going to happen. Back at his desk in the calling room, he sat staring off into the distance while in the
background, the clacking and quacking of the sales process went on.
He decided to go to lunch and wandered out of the building onto Market Street and to a small caf in
the alley behind the building. He ordered a sandwich, a bag of chips, and a Coke. He hated eating alone, as
he felt it marked him as a loser. As he was beginning the second half of his sandwich, a voice on his right
shoulder said, Are you Phil Johnson?
He looked up, fully expecting to see an FBI agent, but instead it was a man near sixty with thinning
blond hair, a round face, and hanging jowls. His eyes were merry, and his voice betrayed no threat. He
introduced himself as David Mead and said that Jim Maletis at Morgan Stanley had called and said that
Johnson was working at Bear Stearns now and Mead should look him up. They walked back to the office
together.
Mead dragged him into his office and then closed the door. Jim tells me that there was a problem with
you and the client, and thats why you left Morgan Stanley.
You know, I wish people over there would keep their mouths shut about stuff thats none of their
business. Yes, I had a problem with the client and I left Morgan Stanley, and I may never work again
because of that one mistake.
Look, Phil, said Mead. I understand what assholes Morgan Stanley can be. I worked with them for
a long time, and they have no loyalty to anyone except themselvesand Im not even so sure about that. I
wanted to talk to you about Bear before you got too deeply involved.
Johnson looked at Mead with concern. He knew too much about Johnson, and he seemed to be
indicating that Bear might not be the right place to work. Johnson was suspicious. Johnson was very
sensitive about people knowing his weaknesses and mistakes. Maletis didnt know him that well, and it
seemed like he was stepping out of bounds, telling Mead about Johnsons problems. Normally, Johnson
was very open about what he did, but in the last few years hed become more circumspect about talking to
people, because he felt that there were few he could truly trust. I understand youre having some trouble
transferring your registration, added Mead.
Yeah. The manager at Morgan Stanley lied about what he was going to put on my U-four, and I went
around telling the story that he and I had verbally agreed to. Then, when the new firms called, he told them
Id been fired and was the worst thing since Hitler.
I dont know what you did or didnt do, but it cant be much worse than some other crap that some of
the people here have been involved in. Thats one of the good things about Bear Stearns. Theyll accept
people who have flawed records. I dont think your record is any worse than that ass David Kavrell, who
got sued by a client while he was at Goldman. His portion of the settlement was nine hundred thousand!
Johnson did some quick math. Usually when a lawsuit was decided against the broker, the firm picked up
damages in the same proportion they took of commissions. If that was true with Goldman, then Kavrells
lawsuit had to have resulted in a settlement north of two million.
Johnson was starting to feel comfortable talking to Mead, and when he got comfortable, Johnson often
became overly loquacious. He started to throw out stories about Morgan Stanley and the Paul Insel matter.
He didnt stop to think that Mead might be a plant to pump him for information that could be used against
him. He was just so lonely and feeling so isolated, he needed to talk to someone in the business.
You know why they have you sitting in the calling room, dont you? Johnson looked at Mead stupidly
before Mead went on, story going around is that you might not be able to get registered because you
falsified documents but that you know a lot about restricted stock and you have some pretty nice clients.
So, Soucys job is to pump you for information so if you dont get registered, hell have all your contacts
information. Until you get registered, dont leave a list of your clients in the office.
He and the lawyer had agreed to talk that afternoon to see if there was any movement from the
Exchange. The lawyer said hed heard nothing but that these things could take several days or weeks and
to be patient. Johnson was having a hard time being patient. He was missing the stimulation of buying and
selling and trying to convince people to invest with him. He was getting calls from his good clients asking
what was going on, and there were a number of things with the tribal clients that needed his attention. He
got up and walked around to where Rosemarie sat. On the way to her office, he walked by a number of
brokers in offices with sales assistants outside their doors. They all seemed to be pecking away at business,
and few even looked up at him.
He found a second calling room. Apparently, one wasnt doing enough damage. As he was wandering
around, a man about his age with a salt-and-pepper mustache walked up and introduced himself as Joe
Olson. Olson was in charge of the muni-bond section of the office. While Johnson was talking to Joe, he
noticed one of the strangest-looking people hed ever seen. The guy was about six two but was very thin.
He probably didnt weight more than 150, but the strangest thing about him was that his head was crowned
with tightly coiled red hair, yet both his mustache and beard were black as coal. He moved in a shambling,
uncontrolled manner as if all of his limbs were independent of his body.
He finally got into see Rosemarie, and they talked for a bit. She made a couple of phone callsone to
Gary and one to someone in New Yorkand talked about his request. She told Johnson shed get back to
him. He toured around the rest of the office, just looking and getting some sense of where things were.
Finally, he ended up back in Soucys calling room. He picked up a Wall Street Journal. Hed already gone
through it once, but there were articles that he hadnt read, and it kept his mind off his concerns.
Soucy saw him sitting there and came in from the main calling room. He said, I have a question for
you. Gary told me when you were at Morgan Stanley, you did a lot of restricted stock with venture
capitalists and directors of companies. Johnson now knew that this was Bear Stearns trying to get his
knowledge.
Yes, I was very active in that area. I was trained by a lawyer at Dean Witter who actually wrote rule
one-forty-four. He could see the greed in Soucys eyes, and Johnson vowed to be closemouthed about
what he knew. Hed tell Soucy the basic rules, but he wasnt going to tell him how to use them.
Well, you know, some of the guys here in the office are running into restricted stock, and they wanted
to know if you could help them land some of these customers. While were waiting for your registration to
transfer, it will help you to get to know the people in the office and help them do business. Gary should
have chosen someone who was a better liar. Soucys face betrayed what he was about, and it wasnt helping
other brokers. The next question was predictable. You know, you could teach me. Then I could teach some
of them, and there would be two of us who knew about restricted stock.
Johnson almost threw up, but he recovered and said, Well, you know, Reed knows a lot about restricted
stock. I trained him, and Morgan Stanley and he also got training from the department head, Skip Karetsky.
Maybe Reed should be the one to teach the other brokers. Hes officially here, and Im still in limbo.
Besides, if I teach, I like to teach everybody at once. I find it works better that way.
Soucy wasnt done. Well, you know these guys in the calling room are all fairly new brokers, and if
you train them and me, you could build quite a group of brokers here who could bring in a lot of business.
The way it would work is, they would go out and find business. You help them with the paperwork, and
then youd split commissions.
Johnson was shocked at the lack of guile. They must really have thought that he wasnt going to get
registered. He resolved right there and then that the information he had, hed use, or hed share only with a
few people he could trust. And they werent the guys in the calling room. Thats an interesting idea, Bill,
but Im not sure that we can split commissions, and I need to find out if Im going at work again before I
start telling everybody all of my secrets. Im sure also that a number of the senior people here know about
restricted stock and know how to get it done. Its not all that big a secret.
He had every idea that Soucy, having been rejected this first time, would run back to Gary, who was
pulling the strings, to find another way to get the information. To distract Soucy, he picked up the phone
and started to dial a number. After making several false attempts and getting some people on the phone
who seemed genuinely mystified that some idiot couldnt dial properly, he finally got an outside line and
called one of his tribal accounts.
Johnson had been carrying around a number of documents relating to financing and economic
development opportunities on various reservations as well as some testimony for Congress on a bill before
the Indian Affairs committee. The project for the Turtle Mountain Chippewa was pretty far advanced, and
his unavailability was delaying the project. He wasnt going let the project go just because of his misfortune,
and he made up his mind hed face the consequences if what he was doing was wrong. He talked to the
tribal chairman, Ken Davis, for several minutes and then made another call to talk to the tribal lawyer.
During the conversations, Soucy had been sitting across the desk half listening. What he heard were a lot
of fairly large numbersten, twenty, fifty millionand it was obvious he was curious about what was
going on.
The tribe was building a very high-tech communications center on the reservation, which they would
use to bid for federal data-processing and communications contracts. It required some financing to get the
facilities built, and Johnson had been talking to Morgan Stanley people about it, but theyd shown little
interest. He still didnt know how he was going to finance the thing. Soucy asked a few questions about the
conversations, but Johnson knew that no matter what anyone else did, they couldnt get that business
without Johnsons help. The previous year, Congress had authorized Indian tribes to issue tax-exempt
bonds. No one had ever done this before, and few firms had seemed interested, but with Bears reputation
for doing unusual business, he thought maybe he had a shot.
Johnson called the managing director of municipal finance in New York. Managing directors
throughout the brokerage industry are largely legends in their own minds and typically dont answer their
own phones. Johnson got an assistant who seemed to have the IQ of a bowl of Rice Crispies. Johnson
introduced himself as a financial consultant working for the Turtle Mountain Chippewa tribe. The assistant
seemed not to understand what Johnson was saying and asked him to repeat it.
My name is Phil Johnson, and Im working on a project with the Turtle Mountain Chippewa tribe of
North Dakota. This is a federally recognized Indian tribe and has the ability to issue tax-exempt bonds, and
were looking at financing a project on the reservation using muni bonds. I wanted to talk to Mr. Cecotori
about Bear Stearnss interest.
The assistant seemed really confused and told Johnson the firm didnt do business with the Turtle
Mountain tribe, and what did he mean by interest? Because the firm didnt pay interest. Johnson patiently
explained his mission. He had a lecture that he gave people who didnt know about Indian reservations but
realized he was probably wasting his breath. However, he didnt know any other way to get to the man he
wanted to talk to. The assistant was getting more and more confused, and Johnson was getting angry. So
he said to her, Maybe I should call back and talk to Mr. Cecotori directly. She asked him to hold while
she talked to Mr. Cecotori. Cecotori was in a meeting and wanted to call him back. Johnson had no line for
Cecotori to call on other than the Bear Stearns office line, and that would just confuse the situation. He
gave the assistant his home phone number and told her that he wouldnt be there for several hours.
Apparently, Soucy was just spying on everything Johnson said and was repeating it almost
instantaneously to Gary. A few minutes after he hung up with New York, Gary called him to his office.
Whats this I hear about you calling New York and wanting to talk to one of the guys in the muni-bond
department?
Yeah, theres a project Im working on for one of my Indian tribes, and I thought Bear Stearns might
have an interest in financing the project. Gary looked at him, and he could see the gleam of greed pop up
in Garys eyes. Johnson thought, I need to be careful. this guy wants the deal.
Well, you need to go through channels to get this stuff done. You cant just call people in New York.
You shouldve come to me, or better yet, you shouldve explained it to Billreferring to Soucy. He
wouldve come to me, and we could have decided if it needed to go to New York. You know youre not
even really an employee yet.
OK, so maybe I went over your head. But this is not something that I can explain easily, and I dont
think either you or Bill have the time to learn about Indian tribes. But if you want me to, we can go through
what Im trying to do right now.
Gary looked up at him and asked, How long would it take?
It depends upon how much background explanation I have to give you about the legal status of Indian
tribes and their difficulty getting financing. But if you have a great deal of knowledge in those areas, I could
do it in about fifteen minutes.
Gary, like all salesmen, didnt want to devote the time to learning anything that wasnt going to produce
revenues immediately. Well, you know we have a muni department here in the office. You should go talk
to them; maybe they can help.
Johnson left Garys office feeling a little more depressed that he had made another mistake, apparently,
and he hated making mistakes. So he went in search of the muni department. He had to walk through both
the equity and bond desks, and like all institutional sales desks, the area was messy, with people yelling and
screaming at each other. He found Mark Homestead, a vice-president of the muni-bond department, and he
and Johnson talked about the project for about half an hour. Johnson recited the facts from memory, and
Homestead took lots of notes and asked a lot of really good questions, which impressed Johnson.
Homestead told him that hed talk to his boss and they would get back to him, and Johnson told him that
he was sitting temporarily in the calling room on the eighteenth floor.
A few more days passed and Johnson had heard nothing from the attorney, so he called, figuring this
would be his last time. If after ten days he still hadnt heard anything, it was likely that his registration
would never come through. The lawyer told him that he had had several conversations with the New York
Stock Exchange and that he was highly convinced that the registration would transfer. He explained that
once ones former brokerage house used such language on the U-4, it was hard for it to say any additional
derogatory things without looking like it had itself been involved in a cover-up, so, even as much of a prick
as Perry Hall was, they were dealing with just what could have been a paperwork error. Johnson tried to
express his frustration and his concerns that his business was going be taken away due to the long delay.
The lawyer expressed no sympathy and told him to wait.
Johnson decided that since he couldnt work, he might as well leave. So he packed up, making sure his
client files were locked in his briefcase. He drove home feeling very frustrated and worried, wondering if
he should start looking for a job outside the industry. Hed been under tension so long with so little result
that his emotions welled up inside him, and he had to be very careful driving since he couldnt see well
through the tears filling his eyes. He started to recriminate himself as he drove east. He drove his self-
esteem down into his shoes. By the time he got home, he was ready to start drinking, but he knew he
couldnt release that dragon. He was so depressed, he made the decision not to go in the next day, assuming
that if the registration came through, someone would call him. In the meantime, he didnt have to worry
about Soucy stealing any of his client files.
On the afternoon of the second day of his self-imposed exile, he got a call from Rachel, one of Garys
two assistants. Dianne had answered the phone to be greeted by Rachels rather sexy voice asking for Phil.
This triggered Diannes innate paranoia and jealousy. It was good news: the lawyer had called and was
overnighting the release of his registration and the U-4 for him to sign, so he needed to be in the next day.
He was officially a Bear Stearns employee. Let the games begin, he thought.
 Chapter 32
Garys Bastard Rings the Bell
In a brokerage office, the days start with cups of coffee, newspaper reading, taking a crap, lies about last
nights date, and a few early-morning calls. Then the day really gets rolling with the morning sales meeting.
At Morgan Stanley, they had been staid and controlled affairs, but at Bear they had the fervor of a tent
revival. People in the office had various areas to report onsyndicate, risk arbitrage, and so on, and
everyone would gather to hear the collective wisdom of their peers. Of course, like most stuff that comes
from Wall Street, the wisdom was self-serving and somewhat mendacious, if not in some cases outright
lies.
Meetings, even ad hoc meetings, develop some command structure. It might be obvious and dictatorial,
or it might be subtle and low-key. The San Francisco sales meeting was no different; everyone knew who
the leader was: Gary. The meeting took place in a conference room with the requisite long table and chairs
and other chairs along the walls. Almost every morning, it was at capacity. All tables have a natural head,
and it was always a mystery to Johnson how that occurred, but hed been in enough rooms to sense where
the power seat was.
Seating at the tables takes on a rank order, and at Bear, ranking was by favoritism and the old leveler,
gross commissions. Gary had a group of toadies who took the four seats on either side of the head chair,
sitting in an almost perfect ranking of their gross commissions. Newer and less successful brokers sat in the
chairs along the wall. Johnson should have had a seat high on the table, but he didnt want to be seen as a
flunky for Gary. Hed determined that Gary wasnt going to do anything for his career. Johnson usually
gave up his seat to junior guys, thinking it might engender a sense of gratitude that would help later.
Gary was a fanatic golfer, and a damned good one too. Usually, the meeting started with Gary telling
the adoring fools a long story about some golf experience and how it related to life in general. Like all
stories about a sport that someone is good at, its boring to all who dont play and who dont care. It offended
Johnson that so much time was wasted with this crap.
It was the beginning of November, the sense of the dying year evident. Today, Gary walked into the
meeting with his assistant Pat, there was shuffling as everyone moved to accommodate the real power in
the office. OK, weve set the date for the Christmas party, began Gary with no hint of the irony of calling
it a Christmas party in an office with over 60 percent of the office staff Jewish. Jewishness has always been
a convenient religious affiliation. Its going to be at the Intercontinental Hotel on Howard, he said, naming
one of the streets nearby. Now, listen to me, if we have any of the crap we had last yearprivate rooms
for parties and furniture thrown out the windows, drug usewhoever is involved is outta here! There were
some nervous giggles, but Johnson was stunned. What firm had to warn its staff not to do illegal acts at the
Christmas party? If it had to be mentioned, it must have been pretty bad. He looked around and realized
that most of the guys were smirking like college frat boys who had gotten caught in a lark.
Is there anyone here who knows now that they wont be at the party? Gary asked. A few hands,
including Johnsons, rose. Gary looked at the first hand, which was attached to a sleazy guy named Peter
Van Wort. Where are you going to be, Van Wort? Van Wort mumbled some story about skiing, and the
interrogation moved around.
Johnson simply said, East Coast, and left it at that.
Why did Gary care? Fewer people, less expense, less logistical mess.
The meeting ground on for the next thirty minutes with reports from Danny Weiner on the latest risk-
arbitrage POS (Piece Of Shit) company that was the target of some asshole. The syndicate lady, a tribute to
plastic surgery, talked about the current deals, but it was just to hear herself talk. She allocated all the office
stock to Gary and his band of warriors, so it was just academic. The meeting broke up, and he was walking
back to his desk when he was overtaken by one of the really weird guys in the office.
Billy McCarty was a nerd. He looked like a nerd, dressed like a nerd, sounded like a nerd, and his office
was a nerds paradise of junk and toys. He talked with a high, nasal whine and interrupted his sentences
with a nervous laugh. He laughed at his own jokes and usually was the only one. The only difference
between the usual concept of a nerd and Billy was that he wasnt very smart. Smart nerds are tolerated, but
a dumb one is just an annoyance. Sorry to see that you wont be at the Christmas party, Phil.
Yeah, I but I have to go see my mother on the East Coast. I havent been back since my dad died.
Theyd walked into Billys office, which he shared with a fellow named Dave Kurland. Well, you
know that Gary, Fred Gans, and Fred Foxnaming the two assistant managersuse the attendance at
the party as way of seeing how committed you are to the firm. If you dont go, they think youre looking
down on them. I found that out the hard way. Billy stared out from his black-rimmed glasses (which, in
the way of all glasses, were dirty), with his head cocked to one side but with a look of absolute sincerity.
Johnson wasnt going to get into the actual details, but it was a warning he intended to take seriously. When
he got back to the calling room, Soucy had a message for him that Gary wanted to see him in about an hour,
and Johnson thought this would be good time to explain why he wasnt coming to the party. After all, they
really couldnt fault him for going to see his widowed mother. Even they had mothers.
The calling room was all fired up about some company that was supposed to be the target of the Bass
brothers from Texas, and the room was filled with the siren call of the idiots. You know, Mr. Schmidlap,
the last time we talked, you said if I had a really good idea, I should give you a call. The client didnt
remember the call, because it likely never happened. Well, it was about three or four months ago when I
called you on Amalgamated Pomegranate. Have you kept an eye on that one? Not waiting for or even
wanting an answer, the pitch continued. Well, it ran from seventeen to sixty in about three months, and
our analysts think the stock were recommending has the same potential. That would be a nice way to end
the year, wouldnt it, Mr. Schmidlap? If the potential client responded with a yes, it signified agreement
and, most importantly, greed, and the pitch went full tilt.
Its remainder was along the lines of how some big-name firmMorgan Stanley, Goldman Sachs,
Lehman, and Merrill were the usual suspectswas about to issue a research report on the company, and
that was sure to get others interested. It always amazed Johnson that clients fell for that line, as most
brokerage research is wrong in both timing and degree, since its self-serving. If it wasnt a research report,
it was that the subject company had hired some firm to sell it out or to defend it from a takeover.
The pitch would wind on with the client protesting he had no money or he wasnt in the stock market
or he needed to talk to the wife, and the broker would bore in with lines like, Do you ask your wife if you
can earn money? which was a play on the male egos desire to control and dominate. It would start the
client thinking, Yeah, why do I have to talk to her? She doesnt ask me before she goes shopping. Besides,
Im the man of the house. I earn the money.
Greed was the emotion in play. It is uniquely American to look for the one big score that sets a person
up, the one big, quick hit. This greed and lack of patience is responsible for more lost money and more risk
taking than any motivation. Investors forget that most really rich people get there slowly and by discipline
and knowledge. The news media, howeverand that includes the supposedly more staid financial press
has always emphasized the overnight success, dwelling on the latest move a person makes and ignoring all
the earlier, smaller actions.
Fear was the other motivation: fear of missing out, fear of being thought stupid or uninformed, fear of
going to a party or a kids soccer game and finding out that the father of your daughters best friend had
invested in the stock you were now being pitched and had made a fortune. The fortune was always portrayed
as larger than it actually was, but lying was part of the game of one-upmanship that motivated the fear. It
was fear of dying poor, it was fear of not taking care of the family, and it was fear of being laughed at by
others. Finally, it was the fear that if you didnt buy the stock, the broker would keep talking!
Johnson knew that this was why people bought and did stupid things, but he couldnt force himself to
disown the methods, as they were the essence of the business he was in. He justified himself by saying he
didnt act that way and his clients were motivated by his superior abilities and their trust in him. But in the
end, he knew they were motivated by the same base emotions of fear, hope, and greed.
He walked down to Garys office, and the door was closed. He was early, as he always was. He was
always five minutes early for everything. It drove Dianne nuts, because her family trait was to be late to
everything. He bullshitted with Pat and Rachel a bit, and then one of the two doors to Garys office opened,
and a woman hurried out in tears. Johnson hesitated, but Gary yelled, Phil, get in here!
 She looked upset. What did you do, refuse to sleep with her? he said in a joking manner. He was
rewarded with a cold, dangerous stare of anger.
Phil, Im going to move you out of the calling room to an office with Jerry Donnelly, right next to
Reed and Stuart.
Jerry Donnelly was another oddball at Bear. He was as Irish as Paddys pig and was one of those guys
you did business with not because of his nonexistent investment skill but because he was just a fun guy. He
always had a joke, laughed easily, loudly, and comfortably. He even laughed at other peoples bad jokes.
He always had in his twinkling eyes the hint of mischief. He never had the courage to carry out most of the
fun ideas or insults he thought up. Johnson thought he was a loud blowhard and didnt trust him, but
Donnelly seemed different, and the move signified two things. First, that Gary believed he was going to
stay there that Soucy wasnt going to get any useful information from him. Second, that Gary wanted to
keep an eye on him. The position in Donnellys office would allow Pat, Rachel, and Fred Gans to see him
most of the time. For Johnson, it was a good move since he wouldnt have to watch every move in his
surroundings. Donnelly might not be the greatest investment genius in the world, but he was a towering
intellect compared to the calling-room fools.
Donnelly seemed genuinely grateful to have him in the office. They were on the south side of the
building so that their backs faced the Bay Bridge and the PG&E headquarters. Donnelly was very helpful
getting him situated. Then they settled down to work. Johnson was busy arranging for a client to sell some
of his restricted stock, but Donnelly seemed to spend most of his time talking to someone about bicycling.
Apparently, this was his huge sport. He had a trainer in his garage and talked about cleats, fat pedals, chains,
gears, and handlebars. Johnson found it amusing because he had no particular sport that he was in love
with. The other thing he realized was that Donnelly was loud. His voice was normally loud when he got
excited; it got louder with humor and was frequently interrupted by an even louder laugh. Fortuitously,
Johnsons left ear was to Donnelly so that the worst of it he never heard.
One of the accounts that hed started developing at Morgan Stanley was for a small insurance company
in Southern California that wrote workmens compensation insurance. It was a wonderful market. The
number of businesses in California was growing about 10 percent per year, and rates for the insurance were
going up at the same speed. On top of that, California didnt allow litigation of workmens compensation
claims.
For some reason, Johnson had bonded with the CFO of this company, who was very interested in tax-
exempt bonds because the companys tax rate was very high and the returns after tax were higher than
returns on taxable bonds.
Johnson, like most stockbrokers, knew a little about a lot of things. He had a rudimentary knowledge
of how insurance companies invested their money, and he had the jargon of the municipal bond market to
use to confuse and convince those who knew even less. Lack of knowledge was never a barrier to anyone
in the brokerage industry, which operated on the philosophy once described by President Eisenhowerif
you couldnt dazzle them with facts, you baffled them with bullshit.
He found that the CFO really didnt know much more about muni bonds than he did; he just liked high-
quality, big-yield selling at or near par valuepreferably below par. Bear Stearns was much more active
in tax-exempt bonds than Morgan Stanley and had a bigger inventory. Joe Olson and Steve Kennewick
traded for the retail office. Every morning, there appeared long runs of printed paper representing offers of
bonds for sale, their prices, and the commissions the broker could earn. There are hundreds of thousands of
issues of tax-exempt bonds, and the abundance of issues reduced price transparency. There just wasnt
enough equivalent information on all issues to allow the prices to reflect a commonality. There often were
big gaps between what Bear paid for bonds and what it could sell them for. This spread was the origin of
the brokers commission: the distance between the bid and ask price was often a chasm requiring a bridge
to cross.
The CFO thought he was really smart and savvy to the ways of Wall Street, so hed never purchase a
bond at the price Johnson quoted. If Johnson told him the price was 100.5, hed always say, Ill take them
at a hundred point two five. All investors, like all poker players, have a tellan indication, however slight,
that theyre ready to do what the broker wants. Johnson realized that the CFOs tell was his desire to
outsmart the market. If the bond was at 100.5, Johnson would quote a price of 100.75 so that the CFO would
knock it back a quarter and be happy. Johnson would make a sale without reducing his commission. In the
third and fourth quarters of 1984, the CFO exploded into a huge customer. So large was the insurance
companys appetite for bonds that a bad day was when Johnson did only $3,000 in gross commissions from
that customer alone.
This went on every day, five days a week. He suddenly was up for adoption by the muni guys. Johnson
got very canny and realized that the consistency of his commissions gave him leverage, so he began to beat
Joe and Steve up on price and commission. It wasnt done in a mean spirit; it was just the Bear Stearns way.
Johnsons power was really enhanced when an offering had sold down to the tag ends. At that point, the
underwriters had made all their money, so they were willing to unload the remaining bonds, sometimes at
really low prices. This gave Johnson the opportunity to reward the CFO with a lot of bonds for a really
good deal. The CFO was an honest guy, and for the rewards Johnson gave him, he rewarded Johnson in
kind.
November rolled along right through Thanksgiving, and Johnson got ready for the Ghost of Christmas
Past. One of the reasons he was going through all the hassle of flying with two young children and a bitchy
wife during the worst time of the year was to avoid the ghost. She seemed most likely to show up after
Thanksgiving, so every day he stayed in town increased the likelihood of a confrontation. Of course, he
thought, she may not know I left Morgan. All he knew was that he wanted to be gone on December 20, the
anniversary he tried so hard to ignore.
Bear Stearns was a Jewish firm, so there had to be recognition of Hanukkah. When the first candle was
to be lit, menorahs exploded all over the office like dandelions. If there had been smoke detectors, they
surely would have gone off. The third day of Hanukkah, everyone, regardless of religion, got a present.
About midmorning, the normal mutter of the office was ripped by the electronic scream of an alarm. Most
people ignored it, staying on the phones to try to make another sale to pay for the holidays. Fred Gans
always seemed to be in charge of this stuff, and as soon as the alarm began, he left his desk. A few minutes
later, Fred came back with a short, not unattractive Filipina and Danny Weiner. None of them looked very
happy.
You cant keep a secret long in a brokerage house, especially a juicy one. It appeared that Danny had
decided to give himself a Hanukkah present: the Filipina. Her name was Grace; she was a student at Golden
Gate University and doing part-time work as a caller. Danny had been trying to get Grace to go to bed with
him, and for some reason, on the third day of Hanukkah, she agreed. There was no place in the office where
a couple could to do the horizontal mambo in any privacy, so theyd decided, probably with a lot of
prompting from Danny, that a blow job would do the trick. They still had the problem of where to go. They
came up with the idea of the fire escape.
Like most tall buildings, 333 Markets doors to the fire-escape stairs could be opened only from the
floor into the stairwell. From inside the stairwell, a person had to go all the way to the first floor to get out.
They were also alarmed to prevent people from hiding out or intruders from using them. The door alarms
only rang in the building engineers office; the response time was usually slower, but there were also fire-
alarm boxes in the stairwells. They had blocked the door from fully closing so that tripped the alarm in the
building engineers office. Apparently, Grace had a lot of experience on her knees, because at some point,
Danny had thrown his head back, hitting the fire alarm and setting off its current screeching. Neither one
of them had had enough sense to stop and run down a couple of stairs to wait until it was all over; theyd
just carried on. Maybe oral sex made them both deaf. In any event, when the building engineers and Fred
Gans opened the door, there was Grace on her knees, fully engulfing Dannys member.
Grace was fired; Danny became a hero. Johnson let his mouth get away from him, saying that they
should have fired Danny since Grace was the only one doing anything useful. It opened up for Johnson
another aspect of the office: it was a raging sex pit. The brokerage industry attracts aggressive people who
have lots of practice overcoming objections. In older folks, this aggression was sublimated to ruthlessness
and the occasional affair. In the young, it was testosterone city, and aggressiveness on the phone converted
into sexual aggression. Since the whole industry revolves around success and exceeding ones peers,
aggressive sexual activity becomes a point of pride. Since the industry also revolves around sometimes
shady ethics and even darker morals, sexual predation is easily justified.
Still, aggressive sexuality doesnt work without two factors: a permissive environment and willing
participants. Both were present in the office.
The sexual revolutions first practitioners were members of the free-love gang of 1960s San Francisco.
Free love was framed as a casting off of Victorian sexual repression and the acceptance of the changing
world. The handmaidens to free loves social revolution were the increasingly popular recreational
pharmaceuticals. There was no denying that women were moving into a new degree of freedom. In 1974,
when Johnson got married, women had five available career paths: mother, teacher, nurse, stewardess, or
secretary. As the decade ended and the 1980s progressed, women were branching out into other fields in
small numbers, though still subordinate to men who werent fit to hold the womens purses. And in the
wonderful way of seemingly random connections, the first oral contraceptives had been introduced around
the early 1960s. While not 100 percent effective, they did offer an astounding degree of sexual freedom.
The fear of pregnancy started to disappear, and even if pregnancy resulted, abortion was a legal backstop.
The new, younger cohort of the boomers had a weaker sense of responsibility and a greater belief in rights
without responsibility, so the idea of premarital sex wasnt the taboo it had been in Johnsons younger
years.
Still, the office couldnt have been a sex pit if management hadnt complied. Gary, who had the stature
of Napoleonwith all of his faults but none of his greatnessfocused on one thing: making people believe
he was the best. In the dictionary where it defined small-man complex, there was Garys picture. He
really didnt care how things were done so long as they reflected well on Gary. He was a salesman through
and through, not a manager. He could have been a great sales manager, but he relegated that job to Fred
Gans and Fred Fox, who made bricks seem charismatic.
The fact that Gary was having an affair with his statuesque and beautiful assistant Rachel was part of
the reason. The other was sheer chauvinism. He really thought that most women were good only for cooking
and sex; he was dismissive of most strong women with the exception of his other assistant, Pat, because
she was the real power in the Garys world.
Johnson got a full demonstration of Garys attitude one week. The New York office had hired a female
stock analyst named Gail Raimen who was very smart, very well educated, and very married. Gail was
following what Johnson called the Warren Buffet stocks: companies with prosaic businesses but long
histories of exceptional financial performance. These stocks really appealed to Johnson, and over the year
Gail had been with the firm, theyd become phone friends. Gail also had the rarest trait on Wall Street
she could actually pick a stock that was going to go up. Gail had told Johnson she was coming to the West
Coast to visit some companies and was planning on working part of the time in the San Francisco office.
When she arrived Johnson knew she was going to be in trouble.
Gail was tall about five foot eight, a sylph of a girl who held herself proudly erect. Her face was
perfection itself: high, defined cheekbones, large eyes, a perfectly shaped and sized nose, a Cupids-bow
mouth, and gorgeous, long, brown hair. Johnson had gone up to the institutional area to meet her. Shed
taken off the jacket of her well-tailored suit, and Johnson could guess that under that silk blouse was a set
of breasts that would surprise the most hardened man with their perfection. He was ashamed at himself for
the thoughts but was determined not to ruin his meeting by staring at her chest.
Theyd been talking about five minutes when Rachel called and said that Gary would like to have Gail
attend the morning meeting. Johnson was conflicted. He knew that the gang of testosterone-driven
narcissists would be driven nuts by Gail and that Gary would certainly make a move on her, probably right
in the meeting. Gail was going to go to the meeting without her jacket, but Johnson swept it up and handed
it to her without a word but with a look that apparently clicked. She put the jacket on and buttoned it all the
way up. She was as prim as an old-lady schoolmarm.
Regardless of Gails modesty, Gary went after her like a dog after hamburger. While the other brokers
slowly filtered in, Gary was chatting up Gail about some big-deal dinner or something. Gail was resisting,
talking about how she had to leave for Seattle. Gary kept on her, wanting to know if they could have dinner
in New York when he was there. Gail looked over at Johnson with increasing desperation. Gary introduced
her and then sat down while she talked about several stocks she followed. As soon as she could get out of
the meeting, she left, never to be seen in the office again.
The 1980s were when Americans began to realize that sexual harassment actually took place, but what
sexual harassment actually was hadnt been formalized. There were a lot of powerful men who used their
positions to get laid and a lot of women who gave up easily, both because they wanted to and because they
thought it would get them promoted. It was really, in those days, more a symbiotic relationship than an
exploitive one. Women were the smarter of the two; they figured that if they wanted to have sex anyway,
why not use it to their advantage? For the men, it was a conquest, pure and simple, not realizing their dicks
were empowering the women. Johnson tried to be respectful of women, although it was hard sometimes
because sometimes they were fools, and he didnt suffer fools at all. He and Donnelly and a few other guys
were the straight arrows. They didnt chase secretaries, they didnt use suggestive language, and they were
ashamed when a woman overheard them say fuck. Johnsons unwillingness to harass women didnt give
him a pass with women or women a pass with him. There were some who were just such bitches that they
just had to emasculate any man they could find.
One of the worst was a woman in the institutional equity department named Therese Payne. Therese
had gotten on the right side of a couple of emerging investment trends. Shed been covering Wells Fargo
Bank when they introduced program trading. In program trading, baskets of stocks were bought or sold
when certain conditions in the markets were met. Usually, at this early stage, programs revolved around an
index like the Dow Jones or the S&P 500. The stars would align and orders would go out to buy every stock
in the S&P 500yes, all five hundred. The buyers could easily turn around and sell a minute later, but it
produced huge trading volumes and huge commissions, and because Therese was there early, a lot of them
flowed to her. As her commissions grew, her ego grew geometrically, as did her disdain for retail brokers.
The insurance company in California had led Johnson to others who were buying stocks and corporate
bonds. Johnson knew that to service the accounts, he needed to get in on the flow of information, and a lot
of what he needed came into the institutional areas. Hed go upstairs early each morning and pull from the
reams of paper articles, lists of stocks being bought or sold, lists of bonds being offered, and commentary.
Hed copy the material and take it back to his desk. One day, he was getting the information and Therese
walked in. What are you doing up here? she bellowed over the sounds of the copy machine and printers.
Johnson had been brought up to be polite until someone evidenced that manners were a secondary
consideration, so he answered her, Im covering a bunch of small insurance companies, and I needed to
get some information on stock flows and corporate bonds.
This is institutional information. Its not for retail. She sneered it as reee-tail, like someone describing
a noxious reptile. It dripped dislike and was intended to disarm him.
Its all coming from the same place, so why shouldnt I be able to use it? Im making copies and
leaving the originals, so the information is still here, and Ron Parker in the bond department says he doesnt
care. I dont see what the big deal is.
At this point, they were standing almost face-to-face. He towered over her by a good six inches, but
she wasnt cowed. Her face took on a determined, angry look, and in her best bitch manner, she said, We
dont want you retail clowns using this information. Youll just mess it up like you do everything else, and
then well be the ones who have to clean up the mess. This information is designed for those of us who
know what were doing, and that does not include you!
Johnson wasnt giving in. In his mind, the information was all produced by Bear and they all worked
for Bear, and he failed to see what the big deal was. But she seemed determined to make him put the
documents back. Look, he said, anger rising, his voice taking on the hard edge that for most people would
have been a warning of potential violence, we both work for the same firm. We just happen to work in
different departments. I work with a lot of different departments at Bearinvestment banking, muni
banking, and a few others. Whats the big fucking deal about this shit?
Therese wasnt backing down. She was like a bull terrier with a rat in its mouth. She was going to shake
the rat until it was dead. Johnson was getting mad, and he was like a bear being denied a salmon. He wasnt
leaving until he ate it. I dont think you know who youre talking to, fired Therese.
 I dont give a fuck. Im taking this information. If you want to try to stop me, you go ahead. He
moved toward the door and toward her, since her back was to the door.
Im going to Gary and have you fired! Im a managing director of this firm, and youre just some
smartass retail broker. Your career just ended, asshole! she fired as he brushed by her. As he walked back
downstairs, he started to worry. It wasnt Johnsons way to back away from a fight, and he hadnt thought
through his actions. He had acted out of emotion. By the time he got down to his office, Therese had called
Gary. Actually, she hadnt been able to get to Gary, so shed talked to Fred Gans.
It was general opinion in the office that Fred was afraid of women. His wife, Shelby, would call the
office five times a day, and you could hear him being paged with, Fred Gans, your wife is on the phone.
No matter what he was doing, hed drop it and pick up her call. Johnson and Donnelly wondered which call
hed take if Ace Greenberg and Shelby called Fred at the same timeAce to tell him hed made managing
director and Shelby to tell him the dishwasher was broken. It was a rhetorical question. The entire office
knew Fred would blow off Ace. Therese, apparently, had really bent Freds ear, because as Johnson came
down the hallway, Fred was already in his office.
Phil, I just got a call from Therese Payne upstairs. She says youre stealing institutional information,
and when she tried to explain that the information was for institutional brokers, you threatened her.
Johnson never knew what was about glasses, but Fred was looking at him through black-rimmed glasses
that looked like they hadnt been cleaned since the Hoover administration.
Fred, he said, We all work for the same team here. Isnt the idea to generate commissions? Isnt the
information all generated from the same places? If I can use the information to generate commissions for
myself, of which Bear takes sixty percent, what in the fuck is wrong with that? Johnson wasnt going to
take any shit from this greasy little bastard, so he delivered his line with the force of a right cross.
Phil, there are separate divisions of the firm, and sometimes theres information for one division thats
not to be shared with other divisions. Therese says the information you took is proprietary to institutional
and you cant take it anymore. She is, after all, a managing director. He delivered the last point as if it was
the ultimate reason.
Johnson was having none of it. I have no idea what that bitchs problem is, but this stuff is not
proprietary. This is just lists of bonds and some commentary from published sources like Dow Jones and
our internal people. Theres no way this is proprietary to anyone.
Fred was getting pissed off. Hed expected to walk in and find the new guy sufficiently cowed by a
sales manager and a managing director being mad at him, but the new guy wasnt acting right, and Fred
had no idea what to do. When two men get into a confrontation and neither backs down, they start spraying
the deck with testosterone. Fred realized that if he didnt deliver a rebuke to Johnson, Therese would make
his life miserable. Johnson, on the other hand, felt he was right, and the more he argued about it, the more
right he felt he was.
Look, Im telling you, Phil, you stay out of the institutional area. You have no business there. Just stay
out!
Or what? spat Johnson. What are you going to do about it, run off and tell Ace or Gary?
I can get you fired if you dont obey me, said Fred with a confused look on his face. Im the sales
manager, and Im telling you, you cant go up there anymore.
Johnson wasnt going to take any more. He moved around his desk toward Fred. Listen, you weaselly
little bastard, Im getting the information I need to do my business. If that bitch upstairs tries to stop me,
Ill knock her on her ass. I have the permission from several other people up there to take the information.
Its only this cunt whos raising hell! Fuck her, and fuck you! Johnson was in full anger mode, and his
mouth started to run away. If I do enough commissions, no ones going to give a shit where I get the
information. Theyre going to be climbing up my ass congratulating me, and Im not letting some bitch on
her period or some half-assed sales manager get in my way. By this point, he was fully around his desk
and advancing on Gans. The look on Freds face indicated that he realized he was in real danger. Later,
Johnson would reflect on whether or not he wouldve done anything. But, in any case, Fred almost ran from
the office.
 Whatever happened must have scared everyone off or they worked out a deal, because he never had a
problem with Therese again. One night, about a week later, he was out for a drink with Donnelly and two
of the older guys, Norm Narron and Dave Cranston. Donnelly was going on about how Johnson had gotten
in Freds face, and Cranston, who had all the marks of an alcoholic, was questioning Johnson about what
had happened. Cranston was kind of a legend because the buyout firm Kolhberg, Kravis, Roberts (KKR)
had been formed by three partners of Bear Stearns, and Cranston had raised the first money. Now, in the
midst of the buyout frenzy, KKR was one of the largest firms of its type.
You know, Phil, slurred Cranston after his fourth or fifth drink, Therese used to be my sales assistant.
She only got up there because she used to bring kneepads to the office and use them a lot.
Johnson missed what the kneepads were all about. He was pretty well in his cups, and his head wasnt
working at peak efficiency. Whatever it meant apparently was hilariously funny, because Norm and
Donnelly were just splitting a gut. It turned out that in her younger days, Therese had had no ethical
constraints about giving people who could help her blow jobs in the office, and apparently, it had worked,
because in a few years, she went from secretary to managing director.
Just around the corner from Johnsons office was a trading room whose sole job was to send in the
orders the brokers generated. When the order ticket got written, the broker had to walk to the trading room
and give it to the traders. Traders are by definition tough people; they can be very crude and really control
the brokers life. If the traders decide that the broker is an asshole, they can make life miserable. Traders
usually have such bad manners and such bad habits that they rarely move into top management positions
or get invited to parties in polite houses. If theyre good and perhaps a little larcenous, they can get very
rich, and a good trader is one of the rarest commodities on Wall Street. As a result, theyre much caressed.
Right next to the counter where the orders were placed hung a brass ships bell about six feet off the ground.
If a broker got an order of more than two hundred thousand shares, he got to ring the bell. A two-hundred-
thousand-share order was a big order in those daysand still is.
Like most insecure men, Garys closest associates were sycophants. Johnson could never figure out the
hows and whys of the relationships. The most obvious was Kelly Trevethan; he was shorter than Gary,
making him about five feet two. Short men like other short men because it makes them feel better. Gary
and Kelly were always hanging around, always talking; Kelly was always in Garys office. Johnson thought
maybe they were queer. The other rumor was that Kelly was Garys illegitimate child. Their relationship
was really the talk of the office, especially when Gary went to Hawaii on vacation and took Kelly with him,
along with his own two kids.
Just before Johnson was to leave for the East Coast, he was sitting in his office making some calls, and
he heard the bell ring. Barry Bellport, one of the other brokers, walked by. Johnson said, Hey, Barry, who
rang the bell?
Kelly got an order for three hundred thousand shares of some twenty-buck stock.
No one believed that Kelly was a great salesman, a great stock picker, or had any knowledge
whatsoever, so was hard to believe that hed got an order that big. So low was the opinion of Kelly that
when he rang the bell, it engendered a lot of jealousy. Johnson was in one of his periodic depressed moods.
He was, after all, about to fly seven hours with two kids and a notoriously bad traveler in Dianne. It wasnt
that he hadnt done a lot in gross; he had about $75,000 on for the month, thanks to the insurance company.
Maybe it was just that he was tired and he was looking toward the difficulties hed have with his family.
He turned to Donnelly. That little shit gets an order that big? What the fuck is wrong with me? Ive
been calling and calling for years. Ive never gotten an order that big! And now some little shit who doesnt
have the brains to come in out of the rain gets a big order. What the fuck? Before Donnelly could answer,
the door of the office was filled with the massive form of Mick Doherty.
You want an answer whats wrong with you, Johnson, or was that rhetorical? Without waiting for a
reply, Doherty continued, Yeah, Kelly got the order, but Gary made the call, Pat wrote the ticket, and
Rachel picked him up so he could ring the bell! That was enough to relieve the tension, and Donnelly,
Doherty, and Johnson laughed like madmen. Dohertys quip, of course, was overheard and repeated, doing
their reputations no good.
 Johnson was convinced that hed beaten the Ghost of Christmas Past. To save money, the family took
a red-eye that would get them into Philadelphia in the early morning, and then they would drive seventy-
five miles to Lancaster to his mothers house. It was a stupid plan. The money they saved didnt compensate
for the trouble they had with their son, who decided to be in one of his really obstinate and aggressive
moods. He wouldnt sleep, he couldnt be entertained, and he crawled all over everybody so no one else
could sleep. He generally made an ass of himself. This, of course, kept their daughter awake, making her
cranky, which in turn got Dianne awake, making her crankier than normalwhich was cranky indeed.
Johnson hadnt slept on an airplane since Vietnam regardless of how tired he was, so he sat awake all night
trying to keep his son under control. Somewhere over the Mississippi, he said to Dean, Why dont you go
outside and play? And for the next twenty minutes, the kid asked him why he couldnt go outside and play.
Exhausted, sleep deprived, cranky, sweaty, and generally nasty, they deplaned in Philadelphia. It took about
an hour to get their luggage and the rental car and out of the parking lot.
Eventually, the kids started to wear down and wanted to take naps. Johnson knew the danger of naps
and tried to talk Dianne out of taking one with them, but she wouldnt listen as usual and fell asleep. She
woke up after three hours, feeling better, as did the kids. Johnson had a second wind. He was tired, but he
could function at least until the proper time to go to sleep.
The first night in Lancaster was a disaster. The kids were sharing a room and immediately started
fighting, yelling at each other over who was going to sleep where and who was going to put which clothes
in which drawer. Dianne was like a bat. As night came on, she unfolded her wings and started flapping
around, driving everybody nuts. Johnson was ready to go to bed about eight oclock, but Dianne insisted
he stay up and watch some stupid movie on television. After the movie, she wanted to talk about it and how
it related to them. Johnson was impolitic enough to say it was just entertainment and had no bearing on
them, and no, the female character bore no relationship to her. Then she wanted to have sex. She had gotten
the movie but didnt get the sex, which pissed her off even more.
Theyd been there couple of days, with his mother taking the kids on tours to see the Central Market in
Lancaster and the Amish country. He and his son were fascinated by the railroad museum, Dean because
hed never seen things that big and Johnson because he was developing an interest in the railroad industry.
The third night, they returned from Christmas shopping, which automatically put Johnson in a foul mood,
so he fixed himself a drink. This immediately started Dianne making comments about his drinking. Her
complaints were finally put down by his mother, who said in that motherly way, Oh, one drink isnt going
to hurt.
About this time, the phone rang. His mother picked it up. Yes, hes here, she said and waved Johnson
over to the phone.
Phil Johnson, he said into the phone.
He was greeted by a maniacal laugh and a female voice. You thought you were going to get away,
didnt you, you bastard! You thought I wouldnt find you. Youve ruined my Christmases since 1972, and
you thought you were going to get away from me. You must think me pretty dumb that I couldnt find you.
Im going to haunt every Christmas you have until the day you die. You killed my husband. You left me a
widow and my daughter without a father because you were a fucking drunk! She stopped for a moment,
either to get a breath or to wipe the spittle off her phone. She gathered strength again. I dont understand
how you can live with yourself! Dick was your best friend, and you let him die! You shouldve died. It
shouldnt have been him, you filthy bastard.
Somehow, shed tracked him down; he had no idea how. But here she was, two days before Christmas,
haunting his holiday. She wasnt done, however. Youve ruined my Christmases forever. Why dont you
just kill yourself? That would be the honorable thing after what youve done! With that, she slammed the
phone down.
Johnson stood there holding the receiver with a look of total despair. The scenes of that day flooded
back with the clarity of a movie. He could see the helicopters on the pad; he could smell the fuel being
pumped into them. He could see himself as if he was out of his body, bent over at the edge of the pad,
puking his guts out. He could see the helicopters take off: first Dicks and then his. As he relived it, he
began to sweat and shake. His pupils dilated, breathing came more quickly, his pulse accelerated, and it felt
like his heart was pounding its way out of his chest.
Apparently the ghost had been screaming loud enough that both Dianne and his mother realized that
something very bad had happened. His mother knew him well enough to be quiet. Shed lived with an army
officer for almost thirty years and knew about the demons only combat soldiers can havedemons buried
deep inside, someplace between the stomach and the hips, that lie like pythons until aroused, when they
reach up and strangle everything in their path. His guts tightened and started to cramp almost instantly. The
python was moving. It moved so fast, he barely made it to the bathroom.
The one drink turned into several more, which earned more hectoring from Diannewho had neither
his mothers grace nor good sense. Diane wanted to know who it had been on the phone and why she was
yelling at him. He refused to tell her because he couldnt go through it again, and he knew that if he did,
Dianne would mishandle the information and not treat it with the compassion it deserved. She grew angry
and put on her fake-hurt face. She began as she always did, making it all about her with a lecture about how
she shared everything and held nothing back and that it was how married people were supposed to act. He
was keeping secrets from her, and she used one of her syllogismsthat knowing he had secrets was like a
knife plunged in her heart. Frankly, at this point, this kind of crap just pissed Johnson off. He had no time
for this. He was going back and forth to the bathroom about every fifteen minutes.
He never recovered his equilibrium. He spun deeper and deeper into depression and had to fight himself
every day not to drink. He knew that all it would take was a few moments of indulgence, and hed be back
where he was that terrible day. His guts gave him no relief until he finally bought some antidiarrheal
medicine. Hed fall asleep and then wake up and stay up. He was getting exhausted, and his mind was
racing all the time. He had all the symptoms of post-traumatic stress disorder. His mother seemed to
understand, although she wasnt happy, but Dianne could never take the hint and needled him constantly.
Once again, his Christmas was destroyed. He wondered, was there no end to the hell he was living?
He arrived back in San Francisco to questions from the receptionist, Julie, who wanted to know if the
woman whod come to the office had gotten a hold of him. Julie was prying, asking questions about the
woman because she had seemed so insistent about reaching Johnson and would give no information about
why. No woman can stand not knowing everything there is to know, even if its not good for her. Johnson,
as always, blew it off as nothing and just went back to work. He needed help; he knew it. But he didnt
know anyone he could talk to about this, so, like a good soldier, he did his duty and soldiered on.
 Chapter 33
Alaska Mud and Gucci Loafers
At Morgan Stanley, Perry Hall had made the brokers write yearly business plans. They were mostly fiction
except for Johnsons. He had been given an assignment, and he did his duty, spending hours writing a
document Perry hadnt cared about and promptly threw away. But now, as 1985 started, Johnson had no
idea how much in gross commissions he was going to do, and so he reverted back to writing a business
plan. Any such plan a broker writes is largely an exercise in mental masturbation. Its virtually impossible
to predict the direction of the markets with any degree of accuracy, and its the movement of markets that
creates the opportunity for commission sales.
Johnson thought hed increase revenues from existing clients by 15 percent and reactivate some older
accounts to bring in another 15 percent in assets. It was all bullshit, but Johnson was unwilling to accept
the fact that it was bullshit. What was worse, no one cared how he achieved it; all they cared about was the
number at the end of each month and each year. While he planned for traditional growth via clients and
assets what was awaiting him was something quite different.
The office seemed to be getting stranger by the day. Johnson, not for the last time, wondered if he was
working in an insane asylum. Charles Moskovitz, the tall redhead with the black facial hair, seemed to go
around the office visiting everybody, never doing business. He was a very strange duck. Johnson didnt like
being around him; there was just an ill feeling when he was. It turned out that Moskovitz was the office
drug salesman, and he didnt have to do any business. He knew dirty secrets and made a lot of money selling
dope. Stuart Reddick, who sat in the office next to Johnson and Donnellys, was always sending out
invitations to parties that always seemed to be on weeknights. Johnson couldnt figure out how anyone
could go out, drink, fool around on a weeknight, and then show up the next day at work. He might have
understood it if his own days had started at 9:00 or 10:00 a.m. rather than zero dark thirty.
There were a number of times he found people sleeping in their offices or under their desksonce,
under his own desk. In the sales meeting, he saw the bleary-eyed remains of last nights drunk on the faces
of various brokers. In the hallways and in the johns, hed hear stories of sexual conquests, drinking, and
how much fun the guys had had. Of course, like all people who get wasted, they couldnt remember most
of the details, but they were sure they had a good time. The office seemed more like a frat house than a
serious place of business.
Just as a brokers clients end up reflecting his personality, the same is true of office managers. Garys
personality was mercurial. He was screaming and yelling one day, and the next day hed be down and nasty.
His sales meetings began with their long discussions about how golf was a microcosm of life and then
launched into some long story about how he was playing golf and it taught him something. Johnson never
understood what it was, but it made a good story. Of course, when Gary was telling his stories, his
sycophants hung on every word. Johnson had come to realize that if he didnt understand something, most
other people didnt either, but rather than admit to it, they would posture as if they possessed all knowledge
about all things.
Johnson was getting asked by Indian tribes to do special projects for which they wanted to pay him
fees. You never do just one kind of business for a tribe. Johnson would be hired for investment management
or consulting, but the tribe would ask his opinion on the structure of an economic development project.
Like most oppressed minorities, the tribes were really good at making outsiders feel guilty. Due to that
guilt, they got lots of offers of help in various areas. Sometimes it came from Hollywood types. More than
once, Johnson had been on a reservation, following some Hollywood celebrity who had suddenly
discovered, in the midst of making a blatantly racist Western movie that Indians still existed. They would
troop up to the reservation in their Rodeo Drive clothing and try to become Indians. Usually, their journey
down the native path ended when their multithousand-dollar loafers contacted a wet cow patty or a baby
with fetal alcohol syndrome vomited on their horribly expensive clothing. They lived their lives in a fantasy
world, and when reality collided with it, they retreated back into fantasy. But for a short period, they wanted
to be taken seriously.
 Morgan Stanley had refused to allow him to accept fees even if he gave it the usual 60 percent. Bear
had no problem with this and made the usual arrangement: he gave them the house portion, and he got the
rest. He started to find this unacceptable. After all, he was paying the costs of going to the reservations, and
he did all the work. He wasnt asking Bear for any help on these deals, so why should he give them his
fees? So, life acted out a pun: he went off the reservation. He set up a sole proprietorship called Sweetwater
and wrote contracts with the tribes in its name, never mentioning Bear Stearns. This didnt skirt the law
it ran over it with a Zamboni! The law said that a broker was supposed to reveal outside business interests
so the firm could tell you that you couldnt do them or, if they did let you do them, they could take all the
money.
The modality of his income in 1985 appeared when he was asked to come to Juneau, Alaska, to speak
to a group of Alaska natives about investment opportunities. In this case, they wanted him to use the Bear
Stearns name. Most of his existing native clients were in the lower forty-eight states and were organized as
tribes. The Alaskan natives had a different structure. In the 1960s, the Alaska natives had sued the state and
the federal government over the unequal distribution of the states bounties. After long fight, Congress
passed the Alaska Native Claims Settlement Act (usually referred to by its acronym, ANCSA). The Act
transferred about 25 percent of the land mass of Alaska to the natives, who were organized into thirteen
regional corporations and a myriad of village corporations. The regional and village corporations were
given lands thick with Sitka spruce and other valuable timber. They were also given money, and this is
where the problem started.
The residents of the various villages were the shareholders of the village corporations, and the stock of
the corporations couldnt be sold for twenty-five years. The corporations had valuable resources and a
population that was more than anxious to receive the benefits. To dispense benefits, the natives had to make
their corporations function as businesses. They had two courses of action. They could actively manage
businesses, or they could invest the money passively. Most of the natives had no experience in business
management, and the cultural imperative made them unable to act as corporate managers.
A minority of the villages took the passive route, living off the benefits of others work. Most, however,
suddenly discovered they were business geniuses, confusing Congressional action with brains.
After the Prudhoe Bay oilfields were proven to be commercially viable, the problem became getting
the oil from the North Slope of Alaska to the ocean. The answer was the Trans-Alaska Pipeline. The pipeline
was unique. It covered incredible distances over truly harsh terrain and was faced with vicious
environmental challenges. The amount of money to be spent on it was like honey to all the construction
companies in the world. Equipment was purchased, workers hired, pipe laid, and fortunes created. The
amount of money involved became the stuff of myth and legend. At one point, Fairbanks had the fastest-
growing bank in the world because of the flood of money from the pipeline.
The timing of ANCSA and the villages slow path up the learning curve meant they had missed most
of the glory days of construction. When they got ready to spend their money, pipeline construction was
starting to wind down, and the construction firms were looking for exit strategies. Into this breach stepped
the village corporations with their newfound wealth. They were also being pressured by the shareholders
to do something to generate dividends. When youre dealing with people who live at a subsistence level,
money really burns holes in their pockets. Some of the village corporations had already suffered raids on
their money, sending chills down the spines of the other corporations.
While the native corporations, their shareholders, and directors had little experience with active
business management, they did understand where power came from. It came from money, and whoever
controlled the money controlled the votes: its really hard to vote against Santa Claus. Some of the natives
sitting on the boards of the corporations had worked in construction and thought they understood the
business. So native money started buying up construction companies involved in the pipeline. It was much
like the end of a bull market, where people buy nearly worthless assets at higher and higher prices.
They were buying expiring contracts and exhausted machinery and no long-term future. Politically
connected, nonnative Alaskans waved them on in their purchases, welcoming them as partners in the future
of the state. The construction companies got to sell equipment they were going to scrap; the nonnative,
politically connected Alaskans got rich off fees; and the natives were left with capital investments that
couldnt earn a return. By the early 1980s, many of the corporations were effectively insolvent. One would
logically have thought that that was the end of it, but Alaska, for all its huge size, has a small population.
The two US senators and the one congressional representative realized if they didnt do something, the
natives were likely to get restless and vote them out of office. The senior senator from Alaska, Ted Stevens,
and the states congressional representative, Don Young, were very senior in their parties and in the
Congress.
Ronald Reagan was president and was very dedicated to self-direction and self-determination. Uncle
Ted, as almost anyone in Alaska called Stevens, came up with a unique idea. The result of the purchases
of the dying businesses was that the village corporations and many of the regional corporations generated
losses while operating the business. These are called net operating losses, or NOLs. In a normal
circumstance, a business with NOLs has to use them against its own future earnings. Stevenss idea was to
allow the native corporations to sell their NOLs to firms that had tax bills. That way, the assets could be
converted into cash, which, of course, could be distributed to shareholders, making everyone look like a
genius and Uncle Ted a hero. So the village and regional corporations got to sell their NOLs and get liquid,
and they started looking for ways to invest the money.
Johnson had been asked if he could help the Tlingit Hiada Central Council, a governing body for the
tribes in Southeast Alaska, to refinance the mortgage on its headquarters via a municipal bond. The
transactions had failednot from anything Johnson did, but in his usual way, he was convinced the word
would spread and hed never do business with an Alaska group again. As usual, he overstated the problem
and, fresh off the failure of the bond transaction, hed got a call from Doug Luna, the lawyer for the Council.
The Council was going to put on a two-day seminar for its member corporations on investments and what
to do with the money from the NOL sales. Doug wondered if Johnson would be willing to be one of the
speakers. In all his presentations to the tribes, Johnson who never thought of himself as being gifted had
discovered he was more of a natural ham than hed thought and loved to speak to crowds, so he naturally
said yes.
Normally, a request for an employee of a brokerage house to speak at a gathering of investors is subject
to mind-numbing reviews by the firm compliance officers who, eager to justify their years of law school,
made approval as difficult as possible. After all, why allow expertise in the hands of a broker to attract new
customers? Brokerage-house compliance officers live with the windows closed so they wont be exposed
to any new ideas that might float in from the outside.
Johnson discovered that Ace Greenbergs description of the Bear Stearns attitude, that they were all
independent businesspeople who had chosen to make their offices at Bear, was more than just words.
Compliance was usually an afterthought. Johnson had been getting very jaded about compliance, so Aces
attitude was refreshing. He remembered a comment by George Bates at DuPuy: Get the business first and
worry about regulations later.
When the agenda arrived, he was listed as Phillip Johnson, Associate Director, Native American
Finance, Bear Stearns and Company with the topic, The Hustlers Best Friend: You.
Johnson decided he was going to attend the entire two days so he could network and steal others ideas.
He flew up to Juneau the night before and met Doug and a few others for dinner. The restaurant selection
in Juneau, a town with only forty-nine miles of paved roads, was limited, especially if you wanted edible
food. They went to the Fiddlehead because it was serving white king salmon, which was rarely found
outside Alaska or Seattle. Fiddlehead was a hippie place named after a type of fern that formed the basis of
its salads. The food was great. As Johnson was sipping his glass of wine, he found himself the only one
drinking. Everyone else was drinking iced tea or Diet Coke. It struck him that every one of these people
had in their pasts a problem with demon rum or had reason to fear they would have a problem with it later
in life. While he was fully aware of the horrific impact alcohol had on a group of people lacking enzymes
to properly process sugar, for some reason the abstinence of his dinner companions forced home the reality
of alcoholism in the native world.
The next morning, he showed up at the meeting room only to find it packed. Most Indian meetings start
late, as they operate on Indian time, which is almost always half an hour after the white mans time. There
were three groups represented: the village corporations who were the potential customers, the presenters
and their assorted hangers-on, and the opposition political parties of the corporations. In Alaska, when the
corporations went to a gathering, they sent large numbers of people, as everyone in Alaska wanted to travel
on the corporations corporate credit cardswhich were used like an infantryman does bullets in a firefight.
Of course, another benefit of the corporate cards was that the director or officer got to keep all the airline
miles.
Johnson understood the locals desire to travel. In the wintertime, Juneau was pitch dark until ten in the
morning and after three in the afternoon. Weather forecasts are very simple: it will rain. And rain it did
not hard, pelting rain; just a constant, cold shower that never seemed to let up, with an irritating way of
finding every gap in your rain gear and sending icy fingers down inside your shirt. To most Alaskans,
Seattle, which is overcast nine months of the year, was like the Sun Belt!
Doug had saved him a seat. The meeting started with a welcome by Ed Thomas, the chairman of the
Central Council. Ed was the typical Native American presenter. He went on far too long, saying virtually
nothing, while most of the audience read papers or chatted with their neighbors. While in white society
such an inattention would be considered rude, it was par for the course in the native world. The first
presentation was from a local lawyer who spent an hour telling the audience, the representatives of the
corporations, something they already knew: the history of ANCSA. The first real presenter was listed as
Ted Brent, whose bio said he was a Southern Cheyenne from Colorado, a leader in tribal business formation
and advisory. Johnson wondered how prominent Ted really was, as Johnson had never heard of him and
the native-advisory world was pretty small.
However, instead of Ted taking the rostrum, another fellow stood up, and he went on for three minutes
about something. Then he introduced Ted. He was Teds full-time introducer. It seemed a bit pompous to
bring someone to introduce you and praise you. When Ted got up, he immediately revealed the reason for
the pompous beginning. Ted was pompous. His first line was something like, Thank you for having me
here today. We were already here at the request of Ivan Gamble at Kootznoowoo Kootznoowoo, with
its representative Ivan Gamble, was considered one of the most progressive and successful of the native
corporations, so being associated with them implied credibility. This confirmed that not only was Ted
pompous but a name-dropper to boot.
Ted began his presentation about life insurance and told everyone that this was the program that Ivan
and Kootznoowoo were considering, once again borrowing credibility. The basic idea was that the
corporations would buy life insurance policies on their shareholders, particularly the elders. As the elders
died, the death benefits would provide capital to the corporation. Ted was pitching ordinary life rather than
the less costly term life. It ran through Johnsons increasingly sarcastic mind that the use of ordinary life
probably had nothing to do with the fact that it paid the selling agent a commission many multiples of that
on term. To pay for the life insurance, the corporations would use their NOL monies to buy annuities that
would kick off enough of a return to pay the premiums on the life insurance. The annuities were another
insurance product and also carried healthy commissions. Ted flashed up slide after slide prepared by an
insurance company showing the benefits of the plan and how wonderful it would be for all concerned.
Johnson leaned over to Doug and whispered that the actuarial assumptions on mortality didnt agree with
the real life-spans of the natives.
Life insurance in its simplest form transfers the risk of a premature death from your family to the
insurance company. If you die young, it provides the assets today that you wouldve developed over a
longer life-span. The insurance company makes its money by figuring out the odds of you dying at various
points. The longer you live, the better for them, since youll be paying premiums and theyll have longer to
invest the funds. The premium is the cost of the transfer and is set partly by the risk of the insureds life. A
history of alcohol or drug abuse, a hazardous profession, or a family history of cancer or other chronic
diseases skew the math away from the insurance companys benefit, and as the risk increases, so do the
premiums.
Indians in general have a good number of risk indicators such as a very high incidence of alcohol and
drug abuse, debilitating and fatal diseases, and work in high-risk professions. In Alaska, many worked in
forestry (logging), stevedoring, construction, and fishing, none of which are in the same risk class as the
job of a white-collar executive. Their life-spans also tended to be about ten years shorter than those of
nonnatives. This meant that the premium on any insurance was going to be very high.
The cash value aspect of ordinary life was the real point of Teds deal. Over time, ordinary life (often
called whole life) builds up cash in excess of premiums paid, and this cash is available to the policyholder
as a loan without tax consequences. In Teds idea, the corporation would be the policyholder, and, according
to him, the corporation could use the collective insurance cash value as a bank to fund corporate activities.
While in another setting this might have been brilliant, there were three things wrong with it.
With the changed actuarial life of the natives, the cash value would be affected. It wouldnt build up as
fast, and therefore assumptions of how much the corporation could borrow would also change. Second,
Indians tend to respect elders, and this plan had the corporation placing bets on the how long each of its
elders would live. The corporation actually did best if the insured died soon after the policy was written, as
it wouldve paid little premium but would get a large cash payment. The plan wasnt a cultural match, and
any respectable Indian, as Ted claimed to be, should have known that. Even as a white guy, Johnson knew
that. Finally, while loans against insurance policies are tax free to individuals, it wasnt at all clear that it
was true if the holder was a corporate entity. Without the favorable tax status, the cost of funds, which Ted
claimed would be low, might actually be ruinously high.
The slides that Tedactually, one of his flunkieswas so diligently flashing on the screen had been
calculated on the normal actuarial assumptions for a white male of normal health and outlook. Johnson said
to Doug, I wonder if the insurance company knows the difference in life-span between a white male and
a Native American Alaskan male logger? Doug nodded in that inscrutable way of a native and was silent.
Ted finished by once again reminding everyone that he and his crew had already been in the area
making this same presentation to Ivan and Kootznoowoo, and he opened the floor for questions. Johnson
was thinking of questioning the assumptions but demurred, feeling that as an invited guest and presenter, it
wasnt his place. Then Dougs hand shot up, and it was if Johnson were speaking. Doug asked in a tone
that at once was authoritative, demanding, and suspicious but at the same time questioning, I noticed that
all the assumptions were based on the insured living to seventy-seven years. The life-span among our people
is more like fifty-seven years. What would be the effect on the premium and cash buildup with the shorter
life-span?
There was silence. Few people in the room had heard the question, but those that understood it realized
that Doug had hit on the essential flaw of the reasoning. Ted looked as if someone had hit him between the
eyes with an axe and looked around for help from one of his flunkies. Then he made the fatal error that
pompous people make when theyre caught out. He lied.
Johnson sat there enraptured, because while it was a tough question, it should have been easy for
someone who knew his stuff. The correct answer was that each case would be different depending on the
number of insureds, their health, ages, and medical histories and that the slides had been based on an
example presented just to give the audience the sense of an alternative to other investments, and that he,
Ted, would be happy to meet privately with anyone who wanted more information. But Ted couldnt do
that.
He turned toward Doug and Johnson, his copper complexion getting redder. His black hair seemed to
bristle in its well-dressed, hair-sprayed arrangement, and with a voice dripping with anger, sarcasm, and
condescension, he reminded everyone that he was there because Ivan and Kootznoowoo had asked him to
be there and that this was the same program hed shown them and they were going to do it, as if to say so
was all the blessing anyone needed. Thinking hed beaten this upstart, he asked for other questions.
Johnson had never met Ivan Gamble and never would, and Johnson had never been to or done business
with Kootznoowoo. But in the investment business, you can tell a lot about people and organizations by the
reputations of their advisors. Kootznoowoo had good advisors, but Johnson was really tired of having this
jerk ramming their names up his nose every five minutes as if they were apostles of God.
Johnson turned to Doug with a theatrical aside loud enough to be heard over the roar of a jet engine.
What bullshit. If Ivan buys this, hes a fool! Teds head snapped around like a ball on a string, and he
fixed Johnson with a glare that wouldve curdled milk. Johnson got that sinking feeling that Ted was going
to hit him or explode, but he turned back to the poser of the last question and gave his answer. Then he
thanked everyone (thankfully not mentioning Ivan and Kootznoowoo) and left the podium as two flunkies
ran forward to gather up the slides.
The next presenter was an overstuffed young man from Delaware Investments who had been flying for
two days to get to Juneau. To a Philadelphian, a place with a name like Juneau had to be Canadian, so hed
flown to Toronto, then to Calgary, and on to Vancouver, British Columbia, where hed discovered that the
flight he was supposed to take to Juneau forty-five minutes after arrival at Vancouver actually left from
Seattle, three hours away by road. He had to fly to Seattle and clear customs, missing the last flight of the
day to Juneau. The next day, he got on the flight nicknamed the dawn patrol, which was delayed by fog
and arrived in Juneau twenty minutes before his presentation. While he was setting up and catching his
breath, the attendees took a stretch break, and Johnson was reminded that sin demands wages.
While he was talking to Doug and one of the other attendees, he could see in his peripheral vision honed
by years in the artillery that Ted and his flunkies were gesturing at him and giving him looks that didnt
mean they wanted to date him. Finally, the young fellow from Delaware was ready, and since he was talking
about asset allocationwhich would be an important challenge for all the attendeesJohnson wanted to
hear what he said. Just as he was getting started with the mandatory introduction, Ted appeared like an
avenging ghost. Do you have a problem with my presentation? he demanded in a normal conversational
voice shaking with anger and drowning out the speaker.
I thought it was bogus and didnt present the true facts, Johnson responded, in effect calling Ted a
liar, and the import wasnt lost. Ted bristled more and got angrier, his hair actually moving like the quills
on a porcupineindependent of each other and in all directions.
I wouldnt have tried to destroy your presentation, he replied, if youd been in the same situation.
He affected that moral high ground of false innocence thats common to criminals and the terminally wrong.
Not without a lot of asperity, Johnson replied, What did I do to destroy your presentation?
He didnt have the words out of his mouth when Ted said, You got this guy to ask that question. He
gestured at Doug, covering up Johnsons words the way its done when two people argue.
Johnson was getting a bit embarrassed. The speaker was trying to make a presentation, and his and
Teds voices were getting louder. Johnson really wanted to hear the presentation, and he didnt want to
come away from the conference known as the guy who got in a fight with Ted Brent.
Doug then piped in and said, I asked the question.
To which Ted shot back, He put you up to it, pointing at Johnson.
Doug replied, No, it was the same question I was going to ask, so blame me, not our invited guest.
By this point, everyone was staring, and the poor, exhausted presenter was about to lose it. Ted,
realizing that hed lost (or that he was making a total fool of himself), started walking away. Johnson
sometimes suffered from nearly terminal smartass disease and felt compelled to have the last word. And
usually, that word was sarcastic. As Ted moved off, Johnson said, Give my best to Ivan and
Kootznoowoo. Ted turned around, and for a moment, Johnson had a fight-or-flight response. Then Ted
shook his head and kept walking. As Johnson turned to sit down, he noticed a few members of the audience
smiling and nodding at him.
The overstuffed young fellow from Delaware finished his presentation, and, given what hed gone
through, it had been a good one and imparted a lot of useful information that decision-makers could use.
Johnson was putting some of his notes in his briefcase when a few of the other attendees came up to Doug
and congratulated him for puncturing Teds balloon. Doug, to his credit, told them that it had been Johnsons
question but hed just asked it, feeling it would be better coming from an Indian. Johnson was still not done
and looked around to see if Ted was there so he could continue the confrontation, but Ted seemed to have
left.
But, as Doug, Johnson, and the others left the meeting room, they ran into Ted and his flunkies in the
hallway. As they walked by, Ted glared at Johnson, and Johnson nodded his head and walked on.
One of the attendees said that theyd all realized Ted was selling something and that the numbers he
was tossing around didnt work, but they didnt know exactly what was wrong. Johnson replied that he
hoped that Ivan and Kootznoowoo wouldnt buy into it, and the fellow said, I doubt it. Ivan is pretty savvy.
What was said here today will be on the totem telegraph tonight, and Ivan will hear about it, so if Ted shows
up there again, hes likely to suffer the old Tlingit punishment.
Doug piped in, We used to take liars and stake them out on the beach at low tide. The race was to see
if they drowned or if the crabs ate them first.
Later that night in his hotel room, Johnson had the kind of letdown that happens after tremendous
exertion. It was a mixture of the relief of survival and recognition that the task was over. While he really
didnt care what Ted thought about him he knew he had embarrassed the man and that was never a good
idea in a small community were everyone knew everyone else.
The second day of the conference, remembering how fast the room filled up, he got there particularly
early. As he walked into the meeting room, he was waylaid by several people asking about Teds
presentation and their confrontation. He tried to explain with self-deprecation that he hadnt meant to
embarrass Ted but thought it important that the attendees understand that Teds solution was certainly not
the magic bullet hed implied it was. Many of them thanked and congratulated him and asked for his
business card. Maybe hed done the right thing for the wrong reasons.
There must really have been a totem telegraph operating, because when he got back to San Francisco,
he started getting phone calls from places like Kake, Sitka, and a host of other strangely named Alaskan
towns. They all wanted him to come and talk to them about investment management, how to hire managers,
and basically how to invest their money. So he started on what became an almost endless round of flights
back and forth to Alaska. The village corporations paid his airfare and expenses, so his only real loss was
the commission he wasnt doing back at the firm.
He did his job a bit too well. The investment industry is characterized, particularly on the brokerage
side, by rampant conflicts of interest. The first conflict is that when a broker is paid by commission, he is
not paid to make money; hes paid to move money. Second is that brokerage firms want to sell their own
products because they make more money on them. So they roll out unit trusts, tax shelters, limited
partnerships, and various other funds to dump on investors and collect bigger commissions. Johnson came
to recognize that there was conflict even in what he thought was the rarefied air of investment management.
There are several components to an investment plans administration team. The first is the custodian of
the assets, a large bank or brokerage firm that holds the assets and receives and settles trades made by the
second component of the plan. This second part is made up of the investment managers who are paid fees
based on the value of the assets, so they should be free of conflicts. The final component is the investment
consultant.
Investment consultants are like any other kind of consultant. They provide advice without having the
responsibility of executing on it. Investment consultants look at the clients goals, the assets, the cash flows
coming in or going out over time, and the clients risk appetite and then suggest an asset allocation to
accomplish those goals within the time allowed. Once the asset allocation is determined, the investment
consultant finds investment managers who can manage the assets. The investment consultant is also paid a
fee.
This arrangement should theoretically be free of conflicts since each part of the organization is getting
paid its own fee all calculated independently and paid independently. If it were only that simple! Nothing
in the investment business is pure. The consulting part of investment management is particularly dirty. All
investment pools (those owned by Native Americans or pension funds, for example) have to be concerned
about the costs of running the investments. The custodian might charge .07 percent plus a charge for each
trade processed, and the investment manager might charge three-quarters of 1 percent. The consultant
charges whatever he or she charges. The sum total is often in excess of 1 or 1.5 percent. There is naturally
some pushback about some of the fees.
The custodians usually dont get challenged on their fees, which are quite low anyway; plus, there are
few alternatives. The investment managers might get some pushback and usually give reduced fees for
larger sums of money, but there is general agreement that its worthwhile to pay what they ask if they
accomplish the goals set for them. So the pressure for lower fees falls on the consultants.
The consultants work on a sheer mass basis. The more money they control, the more fees they generate,
and the more likely it is that they get additional business. In addition, investment consulting is extremely
labor-intensive, requiring lots of brainpower to analyze data on all the investment types. A great number of
very bright people like to work in investment consulting, and they expect to be compensated well. So the
cost structure for the consultant is as high as the managers, but the fees used to be seen as leftovers after
the custodian and the managers were paid. Consultants eventually started working out arrangements
allowing them to get greater compensation. Many of them established trading desks at various brokerage
firms and then nudged investment managers, the way an NFL lineman nudges a running back, to trade on
those desks. That trading generated commissions that were then paid to the consultant.
Another way was to sell investment managers performance studies of how they ranked against their
peers. The managers didnt need this; they had pretty good ideas of how they ranked, but it was made clear
to them, in vague but definite language, that if they wanted to get additional money from the consultants,
theyd better buy the performance studies. This, of course, created huge conflicts of interest for both the
consultant and the investment manager.
Johnson ran into this incestuous arrangement the first time hed taken a Native American account to
outside managers. The tribe had approached a large consultant firm in Seattle, and the tribe wanted to hire
someone from it. Johnson attempted to argue them out of this, saying that he could do the job, but the tribe
wanted a big-name consultant. The tribe asked Johnson to be the interface between them and the consultant,
which he agreed to do.
On one of his trips back from Alaska, he stopped in Seattle to see the consultant. Wilson and Company
was located in one of the high-rises downtown with beautiful views of Elliott Bay and the Olympic
Mountains. When he arrived, he was introduced to one of the partners of the firm, who was in charge of the
tribes account. The partner was assisted by a number of analysts who would actually do the work. Johnson
explained the tribes situation, how theyd gotten the money, and a bit of history. The partner and his
analysts seemed to get bored after Johnson told them how much money was involved. The partner drawled
that Wilson normally didnt accept clients with less than five hundred million dollars but that they would
make an exception for this account, which was a mere fifty million. Johnson hated the guy almost
immediately.
After their trips to the tribal headquarters at tribal expense, the consultants put together an asset-
allocation plan that Johnson thought was immature. He talked to the tribal financial officers about his
concerns, and they told him to work it out with the consultant. The consultants people, of course, werent
going to listen to what they believed was a mere retail broker from Bear Stearns. Once Wilson was hired
and the plan underway with several investment managers engaged, Johnson dropped out of the picture.
Six months later, one of the managers called Johnson to ask him some background questions on the
tribe. The investment manager was great deal more phlegmatic than usual and let slip that they were paying
Wilson and Company for their valuation service and wanted to know if Johnson knew that they were paying
Wilson. Johnson replied no, and the manager made the point that the $30,000 a year they were paying
Wilson didnt seem to be delivering much value, but they thought they needed to do it to continue to get
money from Wilson. Johnson was outraged.
Not thinking about the consequences, he called the partner at Wilson and Company. He also called the
tribal attorney and the tribal finance officer and started a huge hairball. He didnt hear back from the tribal
finance officer or the attorney, but he did hear from the partner at Wilson. He chewed out the guy, calling
him a crook and using other intemperate language, swearing that hed get Wilson fired.
The tribe was no longer loyal to him; their loyalty had shifted to Wilson, and Wilson had done a good
job of making things so complex that the tribe wasnt comfortable ending the relationship. His threat to get
them fired turned out to be empty. The tribal attorney, who normally was pretty cranky about these sorts of
things, begged off because of other things he was doing for the tribe. The investment manager lost the tribal
account at the next review. It wasnt lost on Johnson that the manager, who hadnt done anything bad, was
paying the price for Johnsons rashness. Johnson swore hed never let another organization get between
him and his clients.
He was going to Alaska about every two weeks when the second round of NOL sales slapped him in
the head. Hed known about them but hadnt really understood the difference between the different types
and hadnt known how to get involved. The native corporation that had requested his service this time was
a small village out in the island archipelago off the mainland of Alaska. You flew to Ketchikan and took a
floatplane over this desolate but strikingly beautiful terrain to this little village perched on the edge of the
island hemmed in by nearly impenetrable forest. There was no hotel in Kake, so visitors stayed overnight
in the logging camp.
The first round of NOL sales had involved actual business operating losses, but somewhere, a group of
consultants, lawyers, and accountants had figured out another source of NOLs. When the ANCSA had
passed, the village corporations had been conveyed timberland. At the time of conveyance, the US economy
was experiencing high inflation. During periods of high inflation, real assets like timber become more
valuable in an investors eyes. The ANCSA conveyance had created a tax basis for the corporation. Ten
years later, inflation was dropping annually. The lawyers and accountants came up with the theory that
since the current price of the timber was lower than the tax basis, the difference was an operating loss.
With some pressure from Uncle Ted and a lot of hard work, they eventually proved their case, at least
within reasonable parameters. The bonanza would come from harvesting the timber, but the timber was
inaccessible to the lower forty-eight states because of high transportation costs. The people who were
interested, however, were the Japanese, who love wood and have little supply. The village corporations
sold their timber to the Japanese while retaining the right to harvest it. The harvesting and the loading of
the ships provided the perfect kind of work for the members of the corporation as it was seasonal, largely
cash based, and didnt require a long-term commitment. The corporations were looking at massive amounts
of money, dwarfing the first tranche of net operating losses. Johnson worked with Kake to set up an
investment plan for money theyd gotten from selling their cash NOLs. Now they approached him about
the far larger sale.
Johnson didnt fully understand the mechanisms and needed to study them before he could do anything,
but he wasnt going to tell them he didnt understand the process. He changed his flights so that he could
spend the next day and a half in Seattle and meet with some attorneys who were working with the native
corporations. Their explanations of what was going on were way over his head, but he gleaned enough
information that when he got back to San Francisco, he felt comfortable about approaching Bear Stearnss
investment bankers.
Porter Sesnon ran investment banking in San Francisco. He was a very typical investment banker: tall,
thin, dressed well but not flashily; he was perpetually anxious and couldnt stand delays. Anyone whos
ever worked in a tall building knows that it can be frustrating to ride down in an elevator during rush hours.
At those times, it seems to stop at every floor, and when Porter was in one like that, he made a noise of
disapproval every time it stopped. The first time Johnson heard that, he thought Porter had a sinus infection.
Porter wasnt the kind of guy who got excited about much. He was a pillar of Protestant iciness. His
most common gesture was to look at you with his head down and eyes swiveled up to the top of his glasses.
Johnson, at that point in time, thought investment bankers were actually smart and to be respected. Given
that background and Johnsons feeling of inferiority because he was only a broker, he had approached
Porter carefully.
One of Johnsons faults was that he always wanted to explain everything to everyone. He believed that
he had superior knowledge and that once he imparted that knowledge, everyone would come to see the
wisdom of his position. The experience with Porter on the elevator should have been a warning. He wasnt
going to listen to a long story. Johnson began their meeting by giving a brief history of the situation in
Alaska that had led to the development of the NOLs. He was about halfway through it when Porter
interrupted him. Whats the transaction here! The question was asked with a good deal of anger and
impatience.
I have a corporation that has generated two hundred million dollars worth of NOLs from their timber
sale and wants to sell them to a corporation that has a big tax bill.
You cant sell NOLs, sneered Porter.
You can these! said Johnson. These are special. I know that you normally cant sell them, but theres
been special law passed that allows native corporations to sell their NOLs.
 Porter sat there looking at Johnson like he was out of his mind. It was obvious he didnt believe the
story. Ive never heard of such a thing, and it violates all the accounting standards Ive ever heard of. And
even if it can be done, Im not sure a corporation can purchase them without an IRS action.
Im certainly not an expert in this area, said Johnson, but Ive spent some time with a number of
attorneys and accountants who have been working on this and in fact developed the idea. They say it can
be done, and if you want, I can give you their names. You can call them directly.
Well, Porter drawled, We cant be making decisions about transactions because some country
lawyer comes up with a legal theory. The corporations that might buy these are going to have the best legal
talent in the world, and theyre not going to believe some cock-and-bull story about a bunch of Indians in
Alaska being able to do something no one else can do.
Johnson was getting a little pissed at this jerks condescension. Indians have been doing things that
people said they couldnt do for hundreds of years. They live in a special legal situation that means special
rights, and this is one of them. Ive spent enough time around tribes to know that some pretty weird things
can happen, and in this case, one of the most powerful US senators pushed a bill through giving these tribes
the right to sell these NOLs. You might want to check. There were a number of NOLs sold a few years ago.
They were actual cash losses, and a lot of big corporations purchased them.
Porter seemed to be interested now. One of the things Johnson was to come to realize was that in the
investment banking world, there is actually very little innovation. If someone elses done it, then its OK
for everybody else to do it. One of the oldest sayings in investment banking is, You have eyes; plagiarize.
OK. Give me the names of a couple of these lawyers you talked to, and Ill make a call and see if the
firm has any interest. Thats the best I can do for you.
Thats fair enough. Im sure youre going to find what Ive said is true. But lets talk about another
thing. Johnson was about to tread into the most difficult area of the relationship between brokers and
investment bankers. The only reason that Bear Stearns is getting a chance at this sale is because of my
relationship with the village corporation and the fact that Ive spent thousands of my own dollars flying
back and forth to Alaska. Up to this point, Bear Stearns has done nothing, so I will expect Ill get a good
share of the fees when we do something.
Porter sat there and looked at Johnson with disbelief. You think you can come in here and dictate to
me what fees you get paid? How do you know that I wouldnt have discovered this on my own? We dont
need you trying to jump the gun. Youre a long way from getting any kind of fee, if theres any fee for you
at all. This stuff about Bear Stearns not doing any work is bullshit. We hired you when no one else would,
and you work for the firm. Therefore, you owe the firm a lot, and for you to be concerned about your fee is
disloyal!
Johnson had always been impressed when people could read other people well and so quickly and know
exactly how to hurt them. Porter obviously had developed this talent over the years, because there was no
more serious charge against Johnson than disloyalty. After Porters comments, he felt terrible that hed
overstepped his bounds and he almost apologized, but his good sense and rapidly rising cynicism stopped
him. You do what you want, Porter, but the client is mine, and if I tell them not to do business with Bear
because you screwed me on my fee, theyre not going to do business with you. It was obvious at this point
that the meeting was over and that further discussion would get more hostile, so Johnson got up and left.
It took about a week, but they figured out that Johnson knew what he was talking about and that there
was about $200 million worth of NOLs for sale. Bear Stearns had done business for a long time with the
Del Webb Company, the developer of large-scale resorts. The resorts were starting to generate lots of
taxable cash flow, and Del Webb was interested in reducing its tax liability.
As in all transactions of some complexity, the first step is that the various parties get retained by the
principals. Kake had retained Johnson, but the contract wasnt in Bear Stearnss name; it was in
Sweetwaters name. Johnson had to go back to them and get them to sign a new contract recognizing him
as a Bear Stearns representative. Hed represent the corporation and be paid a fee based on hourly work
plus expenses, plus a bonus if the transaction resulted in more than $60 million. Bear was retained by Del
Webb, and then both Kake and Webb retained lawyers. So, the big furball of fees was in place. Johnson
had failed in his first duty, however, because he only knew that he was getting a fee from Kake but not
necessarily a fee from Bear Stearns.
After studying the issue (at great expense, no doubt), the Del Webb lawyers realized that the deal could
in fact be done and advised their client to go ahead. That advice could have been summed up in one
sentence, but, of course, the lawyers had to go on for about three hundred pages. Del Webbs management
worked on the old, racist idea that if you get the savages to come to civilization, you can impress them and
theyll be putty in your hands. They first tried to get Kakes board to come to Phoenix, but Johnson and the
corporations attorney decided to make Webbs management uncomfortable. They pushed for the first face-
to-face meeting to be in Kake on the grounds that the villagers and other shareholders needed to meet
Webbs management and it would be too expensive to fly the entire village to Phoenix. It was all bullshit,
of course, but it sounded good.
So, on the appointed date and time, Del Webbs corporate jet took off from Sky Harbor Airport and
flew to Ketchikan. There was no place for the jet to land near Kake, so the corporate executives and other
hangers-on had to get off the sumptuous vehicle and onto a series of floatplanes. It was pretty obvious that
none of the executives had ever been to Alaska. They came dressed in suits, ties, and Gucci loafers, carrying
expensive briefcases. A few of them must have checked the weather report, though, because they brought
raincoats.
It took four de Havilland Beavers to fly everyone over to Kake, and Johnson was sure that some of the
executives felt more than a little concerned as they looked out the windows of the rattling, fifty-year-old
aircraft. The landing off Kake was rugged, as the wind was kicking up small waves, and the floatplanes
slammed into them a number of times before finally settling into the water. The planes taxied over to the
dock that was normally used for fishing boats, and the executives unfolded themselves.
The dock wasnt exactly the safest place in the world, as the wood was worn and the harsh weather had
deteriorated a number of the boards. It was also slick with rain and the mold that grows in those parts of the
world due to the constant wetness. What was worse wasnt the dock, it was the walk from the dock to the
headquarters building. It was about a hundred yards over bare ground that had turned into mud. The people
at Kake never had a problem, because they wore boots, but the executives Gucci loafers slipped in the
mud, and the mud clung to the expensive leather like leeches.
Johnson looked over at Norm Peterson, the accountant for Kake, and muttered, I guess that answers a
question: which will last the longest, Gucci loafers or Alaskan mud?
Norm smiled and replied, You should have told these guys to wear more appropriate clothing.
Fuck them. Its good for them to see how other people live.
The meeting went well. The executives did a good job presenting their company, and the natives were
open, good-humored, and seemed not to be angry at anyone. It gets dark early in that part of the world, and
everyone was concerned with the rising wind, wondering if they might not be able to get home on time.
Naturally, the Indians began telling all sorts of horror stories about what happened to people who hadnt
been able to get their flights back to Ketchikan. It was mostly myth, but the weather could get nasty. Johnson
himself had had to spend several unplanned nights at Kake because of bad weather.
Into the early darkness came the roar of 700 hp rotary engines sounding a lot like a World War II movie,
and down came the Beavers to take everyone home. The executives boarded their jet and were away to the
Valley of the Sun. Johnson stayed overnight in Ketchikan and caught the early-morning plane to Seattle
and then back to San Francisco.
About a week later, Del Webbs management asked that everyone come down to Phoenix to work on
the terms of the deal. This didnt involve any of the shareholders or the management of Kake; it was just
the lawyers, investment bankers, and Johnson. Because it was going to be a large group, Webb had booked
a large meeting room in one of the local hotels.
They all arrived and entered the room, and Johnson spotted a person over by the windows with his back
turned. As Del Webbs management filed in, it went over and huddled around the figure by the windows.
When the huddle finally broke, Johnson was looking into the face of Ted Brent. There was a flash of
recognition between the two of them that wasnt one of friendliness, but the meeting began, and they
couldnt continue their argument.
 It turned out that Del Webb felt it needed an Indian guide, so the team had looked around and come up
with Ted. Ted was introduced, said hello, and was silent for the rest the meeting. Ted and Johnson were the
two most useless people there. But Kakes management had insisted Johnson be there, and since Ted was
obviously working for Del Webb, he was doing his job.
During one of the breaks, Johnson was talking to one of the Del Webb people when Ted walked up. He
turned his back to Johnson and broke into the conversation without even an Excuse me. It was a classic
passive-aggressive method of humiliating a person you didnt like. That was the last interaction Johnson
had with Ted. The meeting broke up and Johnson hurried back to Sky Harbor to catch his flight to San
Francisco. The deal seem to go dead after that. He heard nothing from anyone about the progress, and he
began to fear that the deal had collapsed. It was like all of his fears: overdone and irrational. The deal was
just taking time.
Sixty days later, he was invited to fly up to Seattle for the closing. Del Webb had bought Kakes entire
NOL amount for $78 million, which was a huge coup. He could taste the money he was going to get. His
fee billings to Kake were already in excess of $40,000, and now he was going to collect a fee from Bear
Stearns. There was a dinner with lots of wine, champagne, speeches, toasts, and jokes. Everyone was happy.
Kake had come up with a bunch of money, Del Webb had reduced its taxes, and all the advisors had made
nice fees. Johnson noticed that Ted wasnt there, and he asked one of the Del Webb people where he was.
The Del Webb man told him that Ted had been hired for the one meeting in Phoenix just to give Webb
some credibility with the natives. Johnson found out later that Ted had been paid $375,000 for that one
meeting. It infuriated him that this imposter made that kind of money just because his skin had a red tone
to it.
When they got back to San Francisco, there was the final accounting of the fees. Bear Stearns took a
fee of 8 percent of the money raised, and out of that Johnson was supposed to get a portion. He worried for
days about what they were going to do to him, because with that kind of money on the table, the knives
were going to be out. He had the chairman of Kake and the attorney call Porter to remind him that the only
reason the transaction had come to Bear was because of Johnson.
In the end, Bear Stearns figured out how to screw Johnson. He had originated transaction and
shepherded it through all the doubts; several times, he had interfaced between various parties so they could
understand the transaction. Hed spent long hours on airplanes, cold nights in logging camps, slept in cheap
hotels, put up with a lot of insults, and generally done what a factotum would do to get a transaction
complete. For all of this, Bear Stearns first offered him $100,000 out of their $5.7 million. Johnson was
outraged and let everyone know it was plain unfair. Porter and the investment bankers argued that he had
been retained by Kake and, being paid fees by them, he had no right to any of the firms fees. Johnson found
a strange ally in Gary, who stood to benefit from Johnsons fee.
Finally, with a lot of argument and the required screaming and yelling, Johnsons fee went up to
$250,000. He considered fighting for more and actually talked to an attorney about bringing suit. The
attorney convinced him that the firm held all the cards here and that his relationship with Kake could get
him in trouble with the regulatory bodies, not to mention that the lawsuit would cost a lot of money and
really poison the well at Bear Stearns.
He ultimately lost his courage and rationalized that there would be another time and another place to
fight this battle. He accepted the money and went on, but not without a lot of ill will in his heart. Given that
he had a big mouth, he naturally told everyone what had happened and how much he was paid. A brokerage
house is filled with loose lips, and his unhappiness over the situation got back to both Gary and Porter. He
could feel his relationships with both of them cooling off rapidly.
The business plan that he had put together at the beginning the year proved absolutely worthless. His
gross commissions from his clients fell because he was on the road so much, but his income itself increased
because of the fees from the Kake transaction. So, in the end, he thought he was OK. The pipeline of new
business in the brokerage industry has to be constantly filled, but he hadnt been filling his pipeline and
now it was empty. Clients had left, and he had nothing to make up the drop in future income. Regardless of
what he did with investment bankers, he was still going to be judged on his gross commissions. Hed lost
sight of what he was there to dogenerate commissionsand while the Kake transaction had been
remunerative, it had hurt his business in a way that would take years to fix.
In order to get the Kake deal done and to service the other Alaskan natives in the first part of 1985,
Johnson had traveled nearly all the time. Yes, it had paid off and money had rolled in, but not as much as
hed have liked or thought he deserved. It was a lot of money, nonetheless. The influx didnt go unnoticed
by the great consumer, Dianne, whose estimation of her place in life elevated with each larger check.
At midyear, Dianne convinced him that hed been working very hardin fact, too hard, and started
militating for a vacation. Johnson had all the tendencies of a workaholic. He could work for long periods
under fairly high stress and never seemed to really need a vacation. It was all false, of course. What he
couldnt see was that his efficiency declined and his attitude and patience disappeared. It took a lot to get
him to take a vacation, because he felt he was irreplaceable. A little success can make an ordinary person
think hes superior.
Dianne decided they should go to England. Shed been toying with the idea of becoming a travel agent
and in fact had gotten her license. She was lousy at it. But he used her because she viewed it as an expression
of confidence in both her and their marriage. So hed started booking his frequent flights with her. In this
case, she was able to secure a good fare from San Francisco to London. They took ten days and went around
the island clockwise. His favorite was the Lake District. Its steep mountains, long, blue lakes, and
picturesque villages with names like Windermere, Keswick on the Derwentwater, reminded him of
Tolkiens descriptions of Middle Earth.
After they got back, he had to dig out from ten days of mail and messages. He was jet-lagged, tired,
and very frustrated by what he found when he returned one of the calls from an investment banker working
on a new NOL deal for Gold Belt Corporation in Juneau The banker told him that in all the documentation,
Johnson wasnt mentioned at all, and Porter was taking full credit for bringing the deal to the firm. This
was an injustice, one of the things Johnson hated most. At least in his own mind, hed been treated unjustly
for most of his life. He wasnt going to let this stand; he began making phone calls to the village corporation,
the attorneys, and accountants for the corporation. They, in turn, called Porter and Bear Stearns about their
concerns that Johnson wasnt getting full credit for the deal. This, of course, interrupted the feeding pattern
of the Bear Stearns vultures.
Not everyone at Bear Stearns was a rapacious bastard. There were some who actually liked Johnson
and recognized that his expertise was creating the string of deals. When Johnson got upset like this, he
never thought out who he might hurt or what might be in progress before he acted. Politics are a big part of
investment banking, and Johnson wasnt political. He began talking to his friends about how he was being
screwed by the people in New York on a deal that hed brought to the firm. At some point, even though
hed deny it and have no memory of it, he probably unleashed some anti-Semitic comments about the people
he was working with and the firm in general. This was just plain stupid, as it made it impossible for those
who were his allies to help him.
In every organization, theres an apparent power structure and a hidden one. The hidden structure is
often the more powerful. In investment banking, while the partners made all the noise and got all the credit
and the lions share of the money, their ability to do so depended upon associates. Normally a nice guy,
Johnson had impressed the underlings with his sincerity, and most of them liked him. He tried to treat them
all as equals, unlike the partners, who treated the associates like garbage.
The associates had a reason to be involved. While they had more lofty titles, they were in many ways
just like the brokers. Their pay and bonuses depended upon how much revenue they brought in, and every
year, the counter went back to zero. Like the brokers, everyone in the investment banking anthill would
take full credit for every deal despite the fact that they were only minor players. It was a fiction that was
winked at on Wall Street, but everyone knew that everyones resume was inflated and that the real story
came from back channels.
In his anger and his wild statements, Johnson had undercut members of his own team who had seen the
injustice that was being done to him and were in the process of correcting it. Johnsons big mouth actually
was hurting him, not only on this deal but on future transactions. Hed tried to be careful because he knew
that they were out for him as they were for everyone, but his anger over this particular injustice led him
over the line and into a meat grinder he didnt want to be in. His remarks had apparently filtered back to
Fred Gans and Gary. They called him into Garys office. Of course, they couldnt outright accuse him, so
they did it in a backhanded way.
Look, Phil, said Gary, were all one family here at Bear Stearns. We fight like brothers and sisters,
but were all trying to accomplish the same thing. We all work together, play together, celebrate together.
Theres no difference between us.
This was Garys way of saying that he had heard Johnson make anti-Semitic remarks (or what had been
deemed to be). Johnsons temper flared like gas being burned off an oil rig. He was furious at anyone who
would accuse him of being anti-Semitic. He didnt feel he had a prejudiced bone in his body. But like all
people whod grown up in the forties and fifties, hed been exposed to rampant racism. Hed heard all the
stories about how Jews stole money from everyone and that black people were lazy and really didnt want
to work. Hed heard all the stories about the supposed cabal of Jews who really ran the world. At one point,
he had believed them, but at the time, he was stupid. As hed grown older and had experience with other
races, his outright racism had faded. Now he saw himself as unprejudiced and nondiscriminatory.
Yeah, I know that everybody heres all the same, he spat back at Gary, but you know theres real
money on the table, and Im not getting fucked by anybody. I dont care who they are.
Phil, you were overheard making anti-Semitic remarks about one of the partners. Those kind of
remarks have no place here. This was Gans looking up at him through his filthy glasses with a goofy smile
on his face.
This just fired up Johnson more. Im not anti-Semitic!
Well, you made comments that certainly have been taken as anti-Semitic, and you need to stop.
I cant be anti-Semitic. I like Arabs! was his reply to the shocked faces of Gary and Fred. He turned
on his heel and left.
That afternoon, he got a call from Judy Esposito, one of the associates working on the latest deal. She
asked him if he could leave the office and call her from a pay phone. He walked out to the street and dialed
the number shed given him, which wasnt a Bear Stearns internal line either.
Phil, youve really screwed up this deal with your remarks. Its all over New York that youre an anti-
Semitic maniac, and everyone here wants you fired. Johnson started to say something, but Esposito wasnt
done. Weve been trying to make sure you got your fees. We know who brought this to us and whos
behind it, but we cant do anything now that youve poisoned the well with your comments. Youre going
to get hosed on this deal. You should be getting about half a mil, but now youre going to get about a
hundred thou. I had to call you from outside the office because if they hear me talking to you, theyll fire
me.
Johnson was sweating because he was embarrassed and frightened. He might have endangered the job
and career of this woman and perhaps others because his mouth had run away with him. He did what most
people do when caught in a situation like this. He attempted to apologize, but it was as about effective as a
rattlesnakes apology for biting someone. No words were going to heal these wounds. They finished the
conversation. He took a quick walk around the block to cool down.
The evidence of his mess-up didnt stop with Espositos call. The deal was successfully completed and
Johnson got his hundred thousand dollars, but that was the last NOL deal that Bear Stearns did. So what
could have been a virtual lifetime annuity was cut short, all because of his big mouth.
The depression that followed was really only one part of Johnsons complex of behaviors. There was
the self-deprecation that was overlaid with an unspecified, deep-seated anger. It wasnt the superficial anger
at the situation, it was deepersomething like a demon inside him. It was anger for what he saw as his
stupidity; it was anger at allowing himself to lose his temper, anger at having been maneuvered into playing
a game he couldnt win. It was all anger at himself. And as it bounded through his mind, it got worse and
worse, and of course the only answer was that he was totally at fault. He looked for solutions, and the only
one was to quit. Not for the last time, he again contemplated suicide as a way out of his sea of troubles. It
was all very Hamletish but not nearly as interesting.
When he was in this kind of a mood, as usual he deprecated all the successes hed had in the past. He
looked at the fact that hed been in the lower half of his flight school class and almost flunked out three
times. He focused on his alcoholism, his erstwhile hospital opiate addiction, and that he wasnt the number
one producer in the office. Instead of positive self-talk, he negatively reinforced his own fears and lack of
confidence. He eventually went back to work, and no one said anything. Hed expected to walk into the
office and find someone from the Anti-Defamation League sitting at his desk with a lawsuit or have a couple
of the Jewish guys take him outside and beat the crap out of him. Instead, people just said hello, and off he
went.
Hed killed the golden goose, so now he had to go back to the hard grind of developing new business.
The agony of cold calling for new accounts was so severe that he tried to avoid it at all costs. He was left
with a handful of options. One was to work the accounts faster, generating more commissions, or try to get
existing clients to refer others to him. He could have gotten involved with service clubs or other
organizations, but Johnson really didnt like people very much. He was acting when he tried to get new
clients, and the service clubs would require lots of human interchange. Johnson found most people boring.
Johnson was afraid of asking for referrals because in his mind, it showed him to be a greedy bastard
and told clients that they were only as important as the number of referrals they gave. So this left Johnson
with the activity mode. Activity in a clients account is dangerous, particularly in a secular bull market,
where the best thing to do is to leave things alone as the tide raises all boats. It was particularly dangerous
for Johnson, since he wasnt a good trader and most of the moves he made resulted in losses to the client.
He told himself that it was only for a short time and that hed make up the losses, but that time never came.
He was killing his book by a thousand trades.
It wasnt as if he was starving; he was still making a good living. But he wasnt taking home the amounts
he had in the past. Hed banked a lot of the money from the year of fat times, and the money built up in the
joint savings account until it attracted the family opportunist. At first, shed spend small amountsa few
hundred here and there for clothes or trips to see her sisters, which kept her out of his hair. As always
happens with spending, the amounts got larger, and finally he confronted her in the kitchen after dinner and
the kids were upstairs.
Honey, Ive noticed youre writing a lot of checks and that some of them are pretty large. Can we talk
about the spending?
Oh, those were just some emergency things. It wont happen again, was the reply.
But it did happen again, and the checks got even largerfrom a few hundred to the thousand-dollar
range. So he confronted her again but waited until he could get her alone and without distraction, this time
he went at it with considerable energy, trying to communicate his concern. Honey, the checks are getting
larger, and I dont see what youre buying. I want you to have money for day-to-day expenses and stuff like
that, but last month after food and gas and stuff, you took out almost ten grand. Whats going on?
She responded with a lightning strike. What do you do, spend all your time watching my spending? I
know what Im doing. The money belongs to both of us. Its as much mine as yours!
Dianne, that might be true legally, but I put that money aside to pay for the lawsuit, for emergencies,
and for trips for the two of us. He thought the last was good, as it played to her greed. He was wrong.
Im thirty-four years old, the mother of two children! I slave every day to keep your kids going, to
keep your house clean, and to make sure you have a wife you can be proud of. I dont spend any money
that isnt necessary. So what if I spend money on myself occasionally? Im the one cooped up here all day
with no one to talk to while youre in the business world. She paused for breath. He had to admit that when
she got mad, she got sexier. But that was quickly driven away by her continued rant. Ive always been
interested in the business world, Phil. I was once going to be a broker, and I wouldve been a good one, but
I married you because I loved you, and now youre mad at me because I want a few dollars. This is only a
fair wage for all the stuff I do for you!
But, Dianne, this money is for retirement She wouldnt let him finish.
You always have some reason not to spend money, and all the money does is sit there! Its no good if
you dont use it, and Im using it for all of us!
As anyone who looked at the checkbook could tell, it was no benefit to them if she gave money to her
older sister or to her nieces, nephews, or brothers, most of whom were wastrels and borderline criminals.
He couldnt see how it benefitted the family for her to be spending money almost daily on makeup and
vitamins. She had so many pills she was taking that all she created was vitamin-rich poop and pee. Not
realizing that shed stepped him away from any connection with conventional logic, however tenuous, into
the realm of pure Dianne-logical constructs, he moved to the negotiating phase.
Well, lets look at the spending and see if we can come an agreement about what well spend money
on, OK? He was trying not to be dictatorial and not to make a unilateral decision in a multilateral
environment.
I dont have time. Everything I spend money for is essential for my health and for the children. You
may not think so, but I know whats best for me and the kids. We arent like you, Phil. We cant work all
the time, we have to have rest. I cant work eight hours a day. I cant take it! Her eyes were bright with
anger and the beginning of tears. Tears: the most effective argument-winner women ever developed. Turn
on the faucets, and any man was instantly on the defensive.
Hang on for a second, dont cry. Im just trying to understand whats going on with the finances, thats
all. I didnt recognize that you were so unhappy and overworked. Weve been taking vacations and
weekends off. What else can I do?
You think its enough? Its not. My thing is that of being able to connect with myself, and you arent
letting me have enough time. You dont go skiing with me. You know I love skiing and would love to have
you with me, but no, you dont ski because of growing up in Pennsylvania and the fact your father was
never home. Johnson couldnt figure out how those went together. He didnt ski because he didnt like
snow. She continued, We should go out on a date once a week, go away once a month, and on a vacation
every two months for at least a week. She obviously hadnt done the math on that formula.
You think Im an idiot, Phil, because I didnt go to college, but Im not. I have a very intelligent brain
and I know a lot of dumb people who went to college. When I was in grade school, they had a class for
those who were going to college and my parents couldnt afford it, so I got placed in another class. They
thought we were all dumb, but we showed them that having money and going to college didnt make you
smart. Hed heard this story a thousand times, and like all her self-aggrandizing crap, it made no sense,
and she never explained how theyd shown them.
Look, look. He tried to be conciliatory. He didnt want to deal with the ice age that descended on the
house when she was mad. Look, he said for the third time. It was one too many.
Dont keep saying Look! I dont want to look! Say what you have to say! For a guy whos so smart,
you have no common sense. You really act dumb!
OK, just give me an idea once a week about what youre spending money on or plan to so I can make
sure the money is there. OK?
Im going to pray for you, Phil. You really dont understand me at all. You really need help. Youve
never been right since you came home from the war. How she knew this was beyond him, since shed only
known him after he was back. But when husband and wife argue, facts and logic are the first two casualties.
Ive spent all my life working and working hard, and now I deserve a better life. I sacrifice for everyone
and never get anything for myself. I remember holding my father back when he was going to beat my
mother, and I remember him trying to get me to eat peas, which I hate, and I didnt eat them, and he lost
that one. How this related to the current situation was beyond Johnsons 145 IQ. All I ask is for some
sympathy and understanding of how hard Ive struggled. All you do is downput me!
Talking to Dianne was tedious. There was a point in all this, he was sure. There usually was. The
question was, would he be able to recognize it when it finally rolled around? More important, would he be
able to stay awake that long? OK, what is it you want? Tell me and Ill get it done. This was his ingrained
problem-solving method, but there was no problem to solve. She just wanted to vent. But that didnt stop
her from one last blast.
I want you to love and respect me for that of my brains, and I want you to trust me, and you dont.
There was no answer to that type of statement. He was so confused by all the various lines of faulty
logic that he could imagine his brain cells looking at each other as the synapses fired, asking, and What
the fuck was that? It felt like hed been in an argument for hours, but he looked at his watch, and it had
only been fifteen minutes. The act of looking at the time was enough to start another blast.
 You have something to do or someplace to go? Are you bored? He wanted to admit the truth, but he
dared not. You never have time for any of us! This had some truth to it. And you went out and bought
that watch and never asked me before you spent all that money.
Honey, the watch cost eighty-five dollars. You spent two-fifty sending that piece of shit you bought
in Switzerland back only to find out it couldnt be fixed. Wrong! Tears came like rain.
All I want, she sniffed, is a good watch, and that one means so much to me, I bought it in 71 when
I was in Europe with my sister and cousin. He knew he had to end this before he endured another recital
on the famous Europe trip, which would morph into a rehearsal of her few foreign-language phrases.
Luckily, the phone rang.
After the call, Dianne sat there, looking like thunder needing a place to be loud. So he decided on the
spot to buy her off. So, if I was to place some money in a special account in your name only so youd
control it and be able to write checks and spend it for whatever, would that make you happy? That way, I
wouldnt be looking over your shoulder, which you seem to dislike so much.
I dont dislike your looking over my shoulder. I never said you cant be involved. But yes, that would
be nice.
He dickered with her on the amount. Should it be monthly? And she finally won the day. She got a
lump sum of $50,000 to spend as she willed, but she wouldnt raid the joint checking. Shed hit the jackpot.
On reflection, Johnson still didnt know how he could be so calculating and precise in business but so easily
rolled at home.
 Chapter 34
The Illusion
Throughout 1985, Johnson had been working with the public-finance department of Bear Stearns to issue
tax-exempt bonds for some of the tribes. The firm had been offered a deal from a tribe in North Carolina to
use tribally issued tax-exempt bonds to finance the purchase of a mirror-manufacturing company. The offer
had come from a hippie-looking lawyer turned financier named Tom Tureen. Johnson had met him a few
times and theyd crossed swords, with Johnson usually on the losing end.
It was a very difficult deal, and several times he tried to convince Bear to abandon it, as he felt there
were too many problems. Hed come to realize, in the three years hed been active in the Native markets,
something that was generally true in finance. Good deals took on a momentum of their own and couldnt
be stopped; bad deals told you they were bad by the amount of trouble they caused. Bear overrode his
advice.
No one had ever done what they were attempting. Here was a tribe that few people even knew existed,
living in the mountains of western North Carolina, with no credit rating and no history of capital-market
activity. They were proposing to issue bonds that would be tax exempt, but the proceeds were to be used to
purchase a for-profit enterprise. It was being pushed by a lawyer who was full of himself, as most lawyers
are, and who had been a public advocate prior to becoming a financier. He gave rise to a lawyer joke:
Whats the difference between a lawyer and God? God doesnt think hes a lawyer.
They got it done by wrapping the bonds in two layers of bank-issued letters of credit, but the cost of
the money was so high that even an untrained eye like Johnsons could see that paying the debt was going
to eat up any profit to be gained by making mirrors. He tried to warn everyone involved and was given a
strict rebuke by the firm for trying to sabotage a deal. He was right; it didnt work. But it took time for it
not to work, and in the meantime, the stupidity multiplied with the deals supposed success.
Having found a willing partner in Bear Stearns, Tureen came back with another deal. This time, a tribe
in Arizona was going to buy the local cement plant. On the surface, the idea looked inspired. The tribe
owned valuable land that wasnt held in trust by the government, so it could be pledged as security. The
Phoenix market was growing rapidly as snowbirds moved south, so the demand was there. Cement is heavy
and hard to transport, meaning that it needed to be made near the market that would consume it. The plant
used a lot of energy from coal that came from the Navajo reservation, so it looked like a win-win situation.
At some point, though, the owners of the plant got a better offer from a Mexican cement company.
Theyd already agreed to sell it to the tribe, but the Mexican offer could be closed faster, and being greedy,
they took the offer. Bear Stearns found out about the double cross quite accidentally when they were asked
by the Mexican company to lead a junk-bond offering to finance the acquisition of American cement assets.
One of the associates in New York started asking questions. The owners of the Phoenix plant admitted
theyd pulled a switcheroo, and they couldnt break the current deal as the Mexicans would put very high
penalties on them if it didnt close. In short, the tribe was fucked.
Johnson was in Phoenix calling on a different tribal client and drove by the plant. He saw the signs for
the new owners, the Mexicans, and he set records, for the number and repetition of his swear words. When
got to his hotel he grabbed the phone.
He had home phone numbers of some of the Bear Stearns team. He called several of them and got the
full story. Their supposed ally, Tureen, had been promised a larger fee by the Mexicans than hed get from
the tribe. He convinced the tribe that there were problems with the plant and they should let the Mexicans
have the headache. Johnson got on the phone to the chairman of the tribe buying the plant, whom hed come
to know well, and explained what hed heard. The tribe, based on Tureens story, had dropped the deal, but
when they were faced with his duplicity, they were angry and wanted the deal back.
Johnson asked the chairman, If I could get the plant back, would you still want to do the deal? Johnson
confirmed to the chairman that Bear was ready to underwrite the tribes bonds. He stewed on the problem
all night. The next day was Friday and he was scheduled to fly home. Hed called Dianne late Thursday
and had her FedEx a clean suit, shirts and underwear telling her he had to stay in Phoenix for a few more
days. Sunday, he bought a one-way ticket to Monterey, Mexico, the home of the cement company.
He spoke no Spanish other than a few swear words and the usual gracias and buenos dias. He had no
idea what hed say to the Mexicans to change their minds, and he knew he was walking way on the wild
side since he wasnt an official representative of Bear Stearns. He had few options since there was a deal
in place. He decided to bluff and go big.
Somewhere, hed heard that Mexican men are very macho, and respect can come from a confrontation
in which one man is seen as having bigger cojones. He determined hed out macho them. On Monday he
called the Mexican cement company and, after being rebuffed several times, managed to reach someone in
the department handling the US operations (and who luckily spoke excellent English). He made an
appointment for the next day. Hed suggested 7:00 a.m. and was told that no one would be in the office
until 9:00 a.m. at the earliest.
The next day, he got up early. The night before, hed successfully resisted the urge to drink and the
advances of a very attractive prostitute. He started rehearsing what hed say and how hed say it and how
hed act. A lot would depend on how he was first perceived, so he made sure his suit was free of lint, his
shirt unwrinkled, and his tie unstained. He decided hed have his shoes shined at the standoff the lobby. He
bought a small can of hairspray to hold his unruly hair in place and shaved very closely.
He was working on the assumption that the Mexicans didnt know about the deal with the tribe and that
Tureen had betrayed his own client. He also made a very safe bet that the Mexicans knew little about the
legal status of Indian tribes in the United States, and from those two slender reeds, he crafted his strategy.
He decided to enter the building like he fucking owned the place or soon would. He needed to carry off
the air of a person totally in control and avoid what he expected would be a tactic of long discussion with
little substance and even less accomplishment. He had the hotel concierge arrange for a Rolls Royce
limousine to take him to CEMEXs headquarters even though it was only two blocks away. The car was
immaculate, as was the liveried driver, and there was no indication it was a hired car.
After he got in the backseat, the driver said, Senor, you are going to meet with CEMEX? After getting
an affirmative from Johnson, he asked, Do you have sunglasses?
It wasnt particularly sunny, so Johnson hadnt brought any. No, I didnt bring a pair, Manuel.
Johnson had asked the drivers name on greeting him, figuring that it would be more believable if he called
the driver by name as if he were Johnsons employee.
Sometimes, in working with Mexican businesses, its wise to maintain an air of mystery and not let
the other side see your eyes, because the eyes are the window to the soul. With that bon mot, he took his
own glasses off and handed them to Johnson. For luck, senor.
Manuel was very clever and managed the traffic in such a way that the car wheeled into the semicircular
drive at the front of the building at the same time the sidewalk was filled with men in suits greeting each
other before entering. He cut off a Cadillac limo that honked mightily. All eyes were on the Rolls as it came
to a stop. Johnson almost made the first mistake by opening his own door, but Manuel saved him by rushing
around and opening it first, giving Johnson a half salute as he emerged.
He didnt thank Manuel but airily and a bit loudly said, Manuel, I should be about two hours. Then
well go and see the American consul. Manuel tried hard not to smile. He just saluted again and walked
slowly back to the drivers door. The pace of his movement engendered more angry honks from the Caddy,
which had so far been unable to disgorge its passengers.
Johnson didnt touch his tie or his hair as most men would have; he acted as if they wouldnt dare to be
out of place. Looking neither left nor right, he walked purposefully toward the doors, aiming to walk right
through the largest group of men. Johnson wasnt overly tall, but he had shoulders far broader than usual
of a man his size. He had long legs and took long steps. He was stocky rather than elegant, but the
combination of his long stride, big shoulders, and somewhat duckfooted walk made him look determined
and intimidating. Hed been told many times that he just looked like he was in charge. It served him well
now as the men parted like grass before a mower.
 Inside, he was greeted by a pretty young woman with huge, black eyes and that glorious, black-as-a-
ravens-wing hair. Before she could speak, he authoritatively said without an attempt at an accent, Im
here to see Senor Rios Diaz, He didnt give his name.
Yes, sir, was her reply without a hint of irritation. Do you have an appointment?
Of course I do. Why else would I be here? He was rude in both tone and action, looking constantly
away from her as if she was a fly not to be bothered with.
Im sorry, sir, I didnt get your name.
I didnt give it to you. I am Phillip Johnson. He was proud of the way this came outit had a bit of
sneering mixed with dismissivenessand because he didnt give his company name, he conveyed that
everyone should know who he was.
The young woman dialed a number and spoke rapid Spanish. This was when Johnson wished he had
some knowledge of the language so he could get perspective on whether his act was working. This was so
out of character for him that it was making him tired and very nervous. He was beginning to feel sweat
under his arms and hoped his deodorant would hold up.
Another very attractive woman came to escort him past the security guard, who Johnsons constant
scanning had discovered was armed, to the elevators. They rode in silence, and when the door opened, the
woman moved out quickly. To Johnsons eyes, she seemed to put a little extra shake in her booty. They
walked down a long hall, and near the end, he was greeted by Diaz. Diaz was about forty, well dressed, and
thin, about four inches taller than Johnson. He extended his hand with a greeting in Spanish that Johnson
didnt understand.
Johnson returned the greeting with simply, Phillip Johnson.
Diazs office was well appointed, and they took their places on the various seats. Johnson was
particularly pushy, sitting in a chair facing a couch rather than sitting on the couch as Diaz had indicated.
Whether the chair was higher than the couch was unimportant. It felt like the command chair.
With unexpected directness, Diaz asked, What can we do for you, senor?
Johnson decided to reply in kind. CEMEX recently bought a cement plant in Glendale, Arizona, from
Gilford Industries. It was a statement, not a question. Youre going to have to reverse the purchase. He
wasnt on script. In his mental rehearsal, hed used the word rescind, which he thought sounded more
authoritative, but hed stumbled. The word reverse had just popped out.
Why would we have to do that? Even if we would consider itwhich were not. We have a valid
contract with the owners, weve paid money in down payment, we have assurance from our local counsel
that the property is free of encumbrance and the sale complies with the law. Were notifying your
Department of Commerce of the purchase right now.
That is all well and good, senor, but the plant was not free to be sold. Diazs eyebrow twitched.
There was a prior agreement between Gilford and the Pima Maricopa Indian Community for the tribe to
purchase the plant. The agreement predates your agreement. Gilford was not free to sell the plant.
Johnson still had Manuels sunglasses on and could see that Diaz was uncomfortable not being able to
see his eyes. Johnson decided to let him stew a bit.
Diaz said, Well, we would disagree. Mr. Tureen told us the tribe had decided not to purchase the plant,
and hes their lawyer.
Mr. Tureen sold out his own client because he was getting a better fee from you and Gilford than from
the tribe. He violated his fiduciary duty of loyalty. My client is considering legal action, which of course
would include CEMEX and Gilford. Diaz was getting nervous, so Johnson decided to stick the knife in
again. You may not be aware of the legal status of an Indian tribe, but theyre sovereign entities with a
standing higher than one of our states but less than the federal government. That means that the legal actions
will start and continue in federal, not Arizona, courts. Johnson pulled off the sunglasses and swung them
by the temple piece as he allowed his blue eyes to flash their warning of danger to come in a mano-a-mano
confrontation. I can promise you long and costly court fights and tons of negative publicity.
Diaz was clearly discomforted, but to his credit, he didnt lose his cool. He asked Johnson if hed like
a coffee, which Johnson declined. He asked for the mens room. Diaz ordered coffee for himself and,
apparently, while Johnson was in the bathroom, called someone else and convinced them to come to his
office. So, Johnson was confronted by two men when he returned.
The new man was Jamie Eschevra. As closely as Johnson could discern, hed been the point man on
the deal. He was even more discomforted than Diaz and asked a lot of questions about the tribe, Tureen,
and what would happen if the deal wasnt broken. Johnson assured him that the deal would be broken one
way or the other and that the better course was to do it without legal hassles. Johnson decided that he had
nothing else to say and that the longer he stayed, the more likely hed get involved in some long meeting
that unfortunately couldnt be held for several days and would be asked if hed like to know good places
for dinner, and all that crap.
He airily looked at his watch and said, I have an appointment with the American consul in twenty
minutes to notify him of whats going on. It was an outright lie, but it seemed to stiffen the Mexicans a
bit. Ill be heading back to San Francisco tonight. Please let me know your decision. Hed given them the
name of a lawyer in Albuquerque who practiced Indian law so they could verify his story; he figured it
would give him credibility.
He quickly stood, buttoned his suit coat, picked up his briefcase, and said, Thank you, gentlemen, for
the time. Ill find my way out. He walked out the door and realized he had no idea how to get out. Of
course, he turned the wrong way, and when he finally realized hed gone wrong, he had to backtrack past
Diazs office, feeling like a total fool.
In the lobby, he looked at the large clock over the reception desk and was surprised to see that the entire
performance had taken two hours and ten minutes. There, at the front door, was the Rolls, and Manuel was
chatting up the security guard. Manuel rushed over to open the door, because Johnson was walking directly
at it like it would magically open. If Manuel hadnt done that, hed have had to break his walk, which hed
calculated to make it seem like he was too important to deal with opening doors.
He slipped into the leather womb of the Rolls. It had smelled good on the way over, but now, with a
couple of hours of sun on it, the leather smelled of oil and earth. It was heady. After theyd gone several
blocks, far enough to be hidden from prying eyes, Manual swung the car in a long circle that ended back at
the hotel. Johnson gave him his sunglasses and a monster tip and left him smiling like an idiot at the curb.
He got a flight from Monterey to LA, where he knew he could get a PSA flight to San Francisco. He
called Dianne and told her when he would be returning and asked if she could pick him up at the airport. .
She agreed to pick him up after giving him a ration of shit about flying off and not telling her what was
going on. He realized that his call to her on Friday had been very short and dictatorial, as it had been colored
with his anger. He apologized, but hed learned enough from all his experiences not to discuss details of
transactions in elevators, mens rooms, or airports with all their unfriendly ears.
The next day, when people asked where hed been, he lied and told them hed been sick. He wasnt
going to talk about what hed done. He was convinced that if the powers that were at Bear learned of his
unendorsed action, hed be fired, so hed risked it all, as Kipling had said, on one turn of pitch-and-toss.
Now he had to wait and see how it turned out. In the meantime, he had another business to run.
Regardless of the results of the cement-plant deal, there were a lot of other things going on in the
financial world. For a few years, there had been a great deal of dissent and trouble in the Philippines, and
it was clear that President Marcos was in real danger of being booted out of office. From a geopolitical
standpoint, this was big trouble for the United States, as there were large air-force and navy bases in the
country. The United States had virtually created the modern Philippines after World War II and was
associated with the regime, good or bad.
Capital always will and always has sought the highest returns with the most safety. Knowledgeable
Filipinos started to move money in 1984 and this was called flight capital. The pace was quickening as the
demonstrations against Marcos grew. This was called flight money and flow of funds from what was to be
the first of a series of popular revolutions around the world would nearly ruin one broker at Bear, start the
path to ultimate ruin for another, and almost snag Johnson.
Somewhere along the line, Johnsons office mate, Jerry Donnelly, and Mick Doherty made the
acquaintance of a lawyer who worked with many Filipinos. He had a rather strange name: Al Ranuch
(pronounced wrench), which, of course, led to endless puns. Ranuch had introduced Jerry to the
Philippine ambassador to Brazil, who was frequently in San Francisco where he and his wife owned a
house. At first this seemed strange to Johnson, but then he started to realize that there really couldnt be
much for the ambassador to do in Braslia. How many Filipinos were there in the country?
In any case, the ambassador and Ranuch started to introduce Donnelly to Filipinos around the Bay
Area. Ranuch, like most lawyers, had an agenda. He was promoting a couple of private deals, and he wanted
Donnelly to give them credence so the Filipinos would invest. This was dangerous ground, but Donnelly
was impressed by the novelty of the people and the money involved and believed hed be smart enough to
get out before there was trouble.
Johnson tried to warn Donnelly a number of times that what Ranuch was doing sounded funny and to
be careful, and every time, Donnelly blew him off with, Yeah, but look at Raunch. He drives a bigger
Mercedes than youll ever drive, and it all came from flipping the Filipinos. Johnson suspected that
Raunch had quite a complaint history with the California Bar, but Donnelly didnt care. The concept of
getting an edge, of having what seemed to be an endless supply of Filipino money in the hands of people
he could manipulate, was over whelming to Donnelly.
At the same time but via a different source Mick Doherty got involved with the same crowd. He was
closer to the situation and was actually introducing the Filipinos to people who could help them translate
their money from pesos into dollars and then to securities and back again to dollars. It was plain and simple
selling away, since he was referring people to other brokers and outside products, which, according to the
always-late-to-the-party SEC, was in effect blessing the products with the Bear Stearns name.
Donnelly dragged Johnson along on a couple of his visits to the targets. He introduced Johnson as the
smartest guy youll ever meet, which was embarrassing even if it had been true. At one of the meetings,
he met a lady named Chana Lopez who was married, about forty, and beautiful. The jewels in one of her
earrings wouldve paid his mortgage off. He had the distinct impression that Chana was hot for him. She
was always touching him, and when she stood up, shed thrust her chest out and tuck her already tight
blouse into her skirt.
Johnson, with the clarity that he sometimes saw things, realized that all this was flight money that was
going to keep flyingwhich was why Ranuch was selling illiquid private deals to the Filipinos. He revealed
his conclusions to Donnelly and Doherty at lunch one day.
We dont care what they do. Were not liable for what happens. If the firm doesnt like the accounts,
why dont they refuse to open them? asked Donnelly, of course incorrectly. The broker was liable if the
investment recommendation wasnt suitable for the client. These clients were perfect plaintiffs. Most were
Asian women supposedly fleeing persecution and tyranny, their English broken, and many alone with their
husbands in distant lands.
Doherty offered, Besides, you ought to see the fees that are involved. The guys at Prudential take this
Marcos flight money, and they buy bonds issued by Prudentials London bank paying twelve percent. The
broker gets a commission on the original purchase and the buy of the currencies, and they get it both ways.
A huna hundred thousand dollarsof these bonds generates about five grand in commission at first
and about ten grand all in. All the stuff theyre doing is offered by the firm, so there is no compliance issue.
Even if there was, interjected Donnelly, you do enough commission, and you can sleep with Aces
daughter and it will be OK. While crudely put, it was true. Johnson decided to give up actually trying to
save them from getting into problems, but he also decided he wouldnt play their game. So for the next few
months, there was an endless parade of middle-aged, Asian women clad in beautiful clothing and gorgeous
jewelry in and out of the office, which Donnelly and Doherty suddenly became the heroes of.
He had been back from Monterey about a month and received a call from Deke Freeman, who was one
of the ladies working with him on some of the Native American deals. Deke was thirty years old, five foot
ten, and beautiful, with a huge mane of unruly, black hair and a body that turned heads, and she knew it.
She often wore translucent silk blouses that buttoned farther down than normal, giving everyone who
lookedand that was everyonea hint of her black bra. Like other women of her age, most of her height
was in a pair of long, beautifully shaped legs, which she offset by wearing short skirts. It was quite a
package.
 Psychologically, she was about as unstable as nitroglycerin and made no secret that she was under the
care of various therapists. She was good at what she did, however, usually charming any males who were
involved in the decisions. She was dangerous to take to the tribes, though, because the women were in many
cases the decision-makers, and they instantly hated her because she was so attractive.
Deke let him know that somehow (surprise, surprise), the Mexicans had backed out of the cement-plant
deal in Arizona and the tribe had contacted New York about completing the deal. She had no idea that
Johnson had gone to Monterey, so she innocently asked if he had any idea why they would back out of the
deal theyd already paid money on. Johnson mumbled something about recognizing the superiority of the
tribes position and that perhaps it was blowback from Tom Tureens betrayal of them but yes, it was good
news.
In due course, the transaction was completed, the tribe bought the cement plant, Bear Stearns collected
its feesome of which went to Johnson (not enough, in his mind)and everyone seemed happy. Except,
of course, Tom Tureen.
It had been a hard year for Johnson. Family life was tough. His son was continuing to act badly; Dianne
made things tougher by continuing to defend him. Johnson was working very hard but not getting anywhere.
Or so it seemed.
Its almost a staple of life that in a brokerage office, competition is highlighted. Those who succeed are
lionized, and others are disparaged. Oftentimes, the disparagement is subtle (and largely in the mind of the
person being disparaged). Johnson was doing fine by his clients. He was making them money; they were
being treated correctly and not getting raped by the high-fee products the firm was pushing. He should have
been satisfied, but he wasnt. There were people in the office who were just plain stupidthere was no
other word for itbut did well, and, in fact, it seemed that the stupider they were, the more successful they
were. And, of course, theres another relationship of qualities. If they were stupid and successful, they were
also assholes, and the more successful they became, the bigger the assholes they were.
The summer was glorious in the East Bay. Hot every day with temperatures above ninety, it was an
endless round of weekend parties, going down to the shore to get cool, fighting off allergies, and horrendous
utility bills from air conditioning. It wasnt as enjoyable as it could have been because the Johnsons were
still involved with the lawsuit on the house, and two years had passed since theyd filed. Hed paid out
between five and ten thousand a month for almost two years, and he was still being told that they were
twelve months from seeing the inside of a courtroom.
There had been so many houses damaged by the rains in 1982 that the courts were backlogged, so they
established a procedure of having pretrial settlement conferences to see if solutions could be reached prior
to court appearances. At the first of these, everyone had been represented. Frumenti had sued all of his
subcontractors, as had Johnson, so all their lawyers were there. Johnson and his attorney, along with the
lawyer representing his insurance company, USAA, were there. In addition, Frumentis insurance company
was there, and representatives of the mortgage companies, and, it seemed, everyone else who had nothing
to do that day. They met in a large room in the Contra Costa County courthouse, and Johnson looked around
at the nineteen lawyers. He pulled out his HP 12C calculator and had begun punching in numbers when the
administrative officer looked over at him and said, Mr. Johnson, this is your case. Id think youd want to
be paying more attention and not just running calculations.
Well, Your Honor, I was just looking at all these attorneys and trying to calculate what this is costing
me per hour since Im paying all these people, eventually, if I lose this case. I was just hoping that maybe
we can accomplish something rather just flapping our gums. It was disrespectful, but luckily the admin
officer didnt have the ability to cite him for contempt.
It was obvious that Frumenti was going to try to starve Johnson out. The damage to the house had
stopped getting worse, primarily because the rains not been as bad as that first terrible year. Johnson had
hired a very expensive set of consulting engineers, who had drilled several holes to determine the amount
of water present in the ground and ground movement. Faced with the reality of a court appearance suddenly,
all the bravado around being able to prove the damage turned into a pile of weasel words. Theyd not put
any of their earlier statements in writing, so there was no way he could hold them to what theyd said.
 In the middle of August, when things were usually slow, Johnson got a call from a Doug Luna, who
had recently become legal counsel to the Tulalip Tribes north of Seattle. The tribe was looking to purchase
a building on the reservation and wanted to use tax-exempt bonds to fund it and some other land purchases.
Johnson flew up to Seattle and stayed at his favorite hotel, the Sorrento. In all of his travels to Seattle,
hed become aware that people there were more willing to trust you if they thought you were a local. Hed
started reading the Seattle Times and making notes about restaurants and other items that would appear to
give him a residents knowledge of the town. Of course, his golden, all over California tan made him stand
out in Seattle like a black guy at a Ku Klux Klan rally.
Hed noted a restaurant called the House of Hong in the International District and, after looking at a
map, realized that he could walk there. He had an excellent dinner and then walked back to the hotel. It was
a longer walk back since he had to climb all the hills. At the hotel, he was leaving instructions for a wake-
up call and mentioned that hed walked to the International District. His revelation was met with shocked
glances by the desk staff, who told him that it was not a good idea to walk alone to that area at night. There
had been several incidents between tourists and an Asian gang, resulting in the tourists visiting another
Seattle landmark: Swedish Hospital. Two years earlier, three Chinese guys had committed a mass murder
at an illegal gambling club in the International District, and there was still a fair element of concern about
gang violence. He feigned nonchalance at the fears of the desk crew, saying that he could take care of
himself. He was so stupid that way. For all hed gone through, he had no more chance of coming out alive
after a confrontation with an armed gang of the sort that had murdered thirteen people at the Wa Ming club
than he did of flying like a bird.
Hed heard sirens on the streets downhill from the Sorrento but thought nothing of it. With the proximity
of the hospital, sirens were a fact of life. On KING-TV, channel 5, was a story that a three-alarm fire was
burning in the International District. The cutaway took him to a reporter who breathlessly stated that the
fire was consuming the House of Hong Restaurant on South Jackson Street! He felt a moment of cold sweat
as he contemplated that he might have been there for the fire if hed arrived there later or stayed longer.
The Tulalip tribes reservation was only thirty five miles north of Seattle, but the terrible traffic made
the drive take over an hour. Like a lot of the tribes, the Tulalip Tribe wasnt a single tribe; rather, the full
name was the Confederated Tribes of the Tulalip Reservation. The reservation fronted on I-5 and was about
an hour south of Canada. Hed commented before that this would be an ideal spot for one of the casinos
that were starting the long legal battle to operate on tribal lands.
The current item of interest, however, was the empty former Hewlett Packard building, lands adjacent
to tribal lands, and some land near Puget Sound slated to be a new tribal headquarters. Like a lot of
reservations, this one was a checkerboard of different ownerships. There was land owned by the tribe but
held in trust by the federal government; there was land owned by the tribe in fee, land owned by individual
Indians in fee, and land owned by non-Indians in fee but surrounded by tribal lands. The tribe had a goal to
reduce the checkerboard by purchasing non-Indian-owned land.
The tribes finance department had decided to finance the purchases with a tax-exempt bond. The
sovereign nature of the tribe prevented them from perfecting a security interest in the land, though, and
tribes had some history of not paying loans, so no bank would make the mortgage. In reality, the bond issue
would be a mortgage packaged as a bond.
Johnson couldnt like the Tulalips. They seemed fractious and a bit unprepossessing. He did, however,
like Doug and viewed him as a straight shooter. They talked through lunch, and Johnson collected data on
the lands in question and, more important, what revenues the tribe had to pledge in repayment of the bonds.
There was a good deal of unencumbered cash flow available. He agreed to lay the project before his team
and the Bear Stearns partners who ran the municipal-bond business.
He arrived home to find Dianne looking like a cat that ate a bird. She informed him with much glee
that her mother had decided that the next den of iniquity and sin she needed to visit was Lafayette, CA, and
shed decided to spread her mission of family breakup, disharmony, and destruction of others well-being
to his house. There were a lot of times he thought about going back to drinking, and this was one of them.
He headed for the bar hearing the chorus, Thats right, just go drink. Theres something wrong with you
that you have to come home and go to the bar. You need help. He thought, What I really need is a wife
with no vocal chords.
The next day at work, he faxed the information on the Tulalip deal to the partners in New York, and it
was about a week before he got any feedback. The firm was willing to go the next step and negotiate an
underwriting contract. They suggested strongly that the tribal representative come to San Francisco, and
Johnson called Doug and got that process underway.
It was several weeks before the meeting could take place, but eventually, the date arrived. Doug, a
representative of the tribal council, and one of the finance team named Dell Moss were shown to the
conference room where the San Francisco municipal-bond team greeted them.
Johnson was late. When he walked in and looked at the people it was as if a dark veil had dropped on
his head.
 Chapter 35
Balls-High Burst
To start off the new year of 1972, the South Vietnamese Army launched a major campaign against the
North Vietnamese Army in I Corp area along the Laos border aimed at destroying a major terminus point
for the Ho Chi Minh Trail. The Army of the Republic of Vietnam or the ARVN committed three full
divisions to the attackalmost forty-five thousand men. Given the head-to-tail ratio of four support
personnel for each one at the tip of the spear, almost two hundred thousand people were ultimately involved.
The American units tasked with supporting the operation were largely aviation, artillery, and transportation
units. One of the artillery units was the Third Battalion, 198 Field Artillery, which was Johnsons nominal
unit before hed been seconded to the 101st Airborne, aviation.
After the vomiting episode with the assistant division commander, the flight surgeon had grounded
him. It was the wrong week to be a field artillery officer not actively employed. The battalion was made up
of three batteries of four guns each. In each battery, two were 175 mm guns with a range of twenty miles,
and two were eight-inch howitzers with a range of twelve miles. The battalion had moved to three firebases
parallel and three miles east of the Laotian border.
The executive officer of B Battery (called Bravo Battery) was Chuck Marcelin, who had been one class
ahead of Johnson at officer-candidate school. Marcelin had scored a two-week rest-and-recuperation leave
for the week after Christmas and met his wife in Hawaii. There, theyd been involved in a car accident, and
his wife was hospitalized. His leave was extended, and Bravo was without an exec. The exec is the key
officer in an artillery battery and responsible for the functioning of the guns and their ability to perform;
hes personally responsible for every round that goes downrange. If any go astray, hell be called upon to
answer why. Now, Bravo was going into battle without this key officer.
Johnsons bad luck was continuing. Hed been grounded at exactly the time the battalion needed another
officer, and he was the only one available. Hed flown so much that hed forgotten that while he had wings
on his left breast, he had the crossed cannons of the field artillery on his collar. In short order, hed been
shifted from the aviation sections back to the battalion. From supply, he drew a steel helmet, a .45-caliber
pistol, a sleeping bag, and a gas mask. He asked for an M16, but they told him that he wasnt authorized
one. The last item the supply sergeant handed him was a flak vest.
There were two kinds of vests. One was like a real vest, with a zipper up the front and no arms. It
wouldnt stop a bullet dead-on but would deflect shrapnel. The other the one now in Johnsons hands was
the chicken plate. It was two ceramic plates worn on the chest and back and looked a lot like the chest
protectors baseball umpires wore. It was heavy, cumbersome, and very hotnot that the other one was
cool, but you could unzip it and get air. The chicken plate was supposed to be standard for pilots and
officers, but the guy who came up with that idea obviously had never been in combat. It was impossible to
fly with the chicken plate on. You couldnt move your arms enough, and the seat belts didnt fit properly.
The three firebases had been hacked out of the jungle and hills by the South Vietnamese and American
engineers. The whole arrangement looked like a capital T. The vertical stroke was the road from the rear-
support areas to the horizontal stroke leading to the batteries. North to south, the horizontal was ten miles
long. At the northern end was A (Alpha) Battery, at the south, C (Charlie), and in the middle, Bravo. Bravo
was about two miles south of the junction of the vertical and horizontal and Charlie about four miles farther.
Alpha was almost six miles north of Bravo. They couldnt see each other, but they did have radio and wire
communications. Each battery could fire on the others if that level of defense became necessary.
The vertical stroke was a nine-mile stretch and the route by which the infantry and armor would move
up to the battle, so it was supposed to be secure.
The S-2, Major Dennis, gave Johnson signal operating instructions (an SOI) with the radio frequencies
of all the units in the operation. He was to wear it around his neck and to destroy it if capture looked
imminent. The tactical situation was pretty clear. The ARVN troops had gone forward of a line formed by
his and two other US battalions and were being directly supported by their own light and medium artillery.
The heavy artillery of the three US battalions were to reinforce the fire of the ARVN guns.
 After his briefing, he was introduced to his driver, a rough-looking character named Douglas who wore
a dirty set of fatigues, a flak vest, and a steel pot. He was driving a jeep that looked as if it had been in every
war since the Revolution. It was early afternoon in the rainy season, meaning it would be a slow trip, and
the dark came quickly. No one wanted to be on the road after dark. Johnson threw his bag with a few
changes of clothes and his sleeping bag in the back of the jeep and sat in the front passenger seat. Out of
habit, he fastened the so-called DR strap, a web belt that formed a barrier to the passenger being thrown out
in a hard turn.
Sir, began Douglas, if we have to unass this thing, youre not gonna want to have the piece-of-shit
strap up. It wasnt said sarcastically, as if he had meant, Hey, dumb shit, I know what Im doing and
youre just some asshole officer I have to risk my life for. No, it was just a flat statement that left no
argument, basically meaning, I gave you some advice. Take it or leave it.
They left the rear area on local roads through the villages with mamasans carrying whatever in buckets
attached to poles over their shoulders. They passed pretty Vietnamese girls in the traditional ao dai and men
in white, baggy cotton shirts and pants, past naked kids in the rice paddies, and water buffalo grazing on
the roadside. For a few miles, it was possible to believe there was no war. Soon, they began to see long
columns of two-and-a-half-ton and five-ton trucks coming back either empty or carrying wounded troops.
They passed columns of tanks, jeeps, armored personnel carriers, and trucks towing artillery parked along
the shoulders of the road, waiting to be deployed.
They passed a checkpoint, and immediately Johnson got nervous. The road had been blasted and
bulldozed through forest largely defoliated by Agent Orange, artillery fire, tactical bombing, and the
awesome B-52 arc-light missions that shook the earth and lit the skies. What was left was a tangle of
undergrowth. It could be a perfect ambush site. Johnson pulled his .45 and ejected the magazine, checking
that it was full of seven rounds. He worked the slide to make sure it was functional and returned the
magazine. Douglas had been watching and, without taking his eyes off the road rutted by the passage of
tracked vehicles, he handed Johnson an M16. Johnson got it ready and laid it across his lap.
Sir, if you dont mind a suggestion, Id keep the microphone of the radio in your lap. If we get hit, that
M16 and your pistol wont be worth a lick of spit, but that radio could get us support if you can make the
call. Youre going to have to, because Im going to be driving like hell.
Good idea, Sergeant, Johnson replied.
I aint no sergeant, sir. Used to be, but no more, was Douglass reply.
Johnson was interested in Douglas; he was so black, he looked like a parody of a black man from the
Amos and Andy days. The whites of his eyes and his teeth shone like ivory in the coal-black face. Douglas
reminded him of Andy DeForest, who had been the foreman of Lambs number-two mine in Pennsylvania
and blacker than the soft coal they mined. When the Colonel had found out that Johnson didnt want to go
to college, he arranged for his son to get a job in the mine. It took a week under the stern tutelage of Andy,
and Johnson was on his way to college. Douglas didnt affect the street talk or the black-power handshakes
and greetings of a lot of the other black troops. His voice didnt betray what Johnson called Negroisms
the dropped g at the end of words, the frequent use of motherfucker or mofo. He was a contradiction.
As they raced along, Johnson started to think about the fates that had brought them together in the middle
of this jungle on a road to nowhere.
Just as he started to think, Douglas gave the jeep a violent right wrench and then one back to the left.
The turns bounced Johnson all over, and he almost fell out. Jesus, sir. Did you see that?
No. I was too busy trying to stay in the jeep. What did you see?
There was a big, fucking hole in the road, sir, too big to be a pothole. It was either a shell hole or mine
hole.
A shell hole meant the bad guys maybe had mortars and rockets, a mine hole that the road might be
mined. Mines were everyone on the grounds biggest fear. Some were small and would only blow your foot
off; some hopped out of the ground and exploded about waist high. The antivehicle mines had fifty pounds
of explosive and could take out a tank. Hit an antivehicle mine, and your parents would get a log in the
coffin the army sent home, because they would never find enough of you to bury.
 Just past the hole, the road got really rough, and their speed dropped. If it was going to happen, this is
where it would be. Johnson opened his SOI and found the frequency for Bravo Battery. The battalion rear
area was already set on the radio. He set the Bravo frequency on the other preset button and then made a
commo check with both units. Hed been following their course on the map, and he radioed both units their
location and expected time of arrival at Bravo. If they were late, someone would know it.
You know, sir, said Douglas when they told me that some rotor head was coming out to Bravo to
be exec, I thought hed be an idiot that didnt know his ass from a hat. Then I found out that it was the
legendary lieutenant who barfed on that prick General Hillss boots, and I thought, Poor Bravo. Im
impressed; you seem to know your way around, sir.
My father was a career artillery officer in World War II and Korea. I was an artilleryman before flight
school, and I spent some time at Fort Ord training infantry troops, so I have a pretty good education behind
me. You dont like Gen Hills?
No, sir. Hes really a clown. I was a sergeant with an FOa forward observerin the second of the
five-oh-first, and he dropped in one day when wed been on patrol for thirty days. We hadnt been shaving
because we were short of water, and when he saw us he demanded we shave. The company CO ordered us
into a rice paddy to shave. Two days later, the entire company had to be pulled out because our faces were
infected! What an asshole.
They bucketed on in silence for a few miles, and then they saw the horizontal stroke of the T. Douglas
slid the jeep around the corner almost on two wheels. Two miles to the comparative safety of the battery.
Johnson called the battery to tell them he was close and ask that they relay to the battalion rear. They found
the road up to the battery, and they drove about seventy yards before they were halted by a thoroughly
miserable-looking soldier on guard duty. After a successful password challenge and response, they passed
into the battery area.
The footprint of the battery was small, and Johnson was surprised there was no infantry support. There
are few things as defenseless as a heavy-artillery battery, yet here was one sitting near the border of bad-
guy land with only its organic weapons as defense. The battery was firing the two eight-inch howitzers, and
their deep bark was evident before they actually reached the battery. The two 175 mm guns were silent.
As Johnsons jeep stopped, a worn-looking sergeant first class approached and said with a southern
accent that Johnson had come to associate with the cracker class of people, Yall the new exec?
Sir, Johnson added, looking the sergeant straight in the eye with the challenge of responding or
getting off on the wrong foot.
Sir, came the grudging response.
Yes, Im Lieutenant Johnson.
Sir, Im the chief of smoke, Sergeant Danton. Welcome to Bravo. Chief of smoke was the designation
of the senior noncommissioned officer directly involved with the firing of the guns. He was the battery
executives assistant, but that relationship was never mentioned out loud. Thanks, Smoke. I wonder if
someone could take Sergeant Douglas in hand and arrange a bunk for him for tonight?
Sir, I was going to go back, said Douglas.
It will be dark by the time you get to the checkpoint. Youd be a sitting duck, Douglas.
Maybe, sir, but I have to drive one of the colonels tomorrow early, so I better get going.
Smoke, you have anyone that needs to go to the rear who could ride shotgun with Douglas? Getting
a negative head shake, Johnson said good-bye to Douglas and saw him on his way.
He humped his bag up to the fire direction center (FDC) and met the assistant executive officer on duty,
asking him to send a radio message to the rear about Douglas leaving. Then he and Smoke went on a tour
of the battery area. They were joined by the first sergeant, a grizzled, old veteran named Bronaslaw.
The battery had been well set up, generally in a circle; it was tight quarters, which made it easier for
the limited number of troops to defend. The trade-off was that a lucky mortar or rocket could cause a lot of
damage. The guns seemed well maintained and the crews attentive. Ammo was stored as well as it could
be under the circumstances. There was no mess hall; the troops were eating C rations and getting hot meals
twice a week by helicopter. His two concerns were that the pads where the twenty-eight-ton guns sat were
turning into dust bowls from the force of the recoil and the guns tracks tearing up the ground and that the
troops didnt seem to have adequate protection against mortar and rocket attack.
They humped around the battery area until it was just beginning to get truly dark. The troops were
making trips to the latrine and checking to make sure that lights werent visible from their hasty bunkers.
In the near-perfect darkness of the Vietnamese winter, a small light could be seen for miles and drew enemy
fire like flies to shit. After the tour, Johnson asked Smoke to have all the section chiefs meet him in the
FDC.
Staff Sergeant Vick was from Georgia and had gun two, a 175 mm; Staff Sergeant Masters had gun
four, an eight-inch, and they impressed him as steady and competent. They had all their gear and were silent
and watchful. The other two were unknown quantities. Smith, of gun three, the other eight-inch, was from
New York and a buck sergeant. He seemed ill at ease and unsure. He was dirtynot just his fatigues, but
his person, and while its always difficult to stay clean in combat, it was apparent that the others were
attempting it but Smith wasnt. It said something to Johnson about Smith, and a gun crew reflects its leader.
The fourth was Staff Sergeant Fenstermacher, and one look told Johnson that his 175 mm would be the
trouble gun. Fenstermacher was the tallest of the four and had several days beard. He was dirty, and he
wore a soft cap, not a steel helmet, and no shirt or T-shirt under his flak jacket. He was greasy up to his
elbows and, judging from the distance the FDC crew and the other chiefs maintained, probably stunk to
high heaven.
Johnson introduced himself and told them that while hed been an aviator since hed been in-country,
he was a second-generation artillery officer, and while he hadnt been in a battery for a while, he hoped
they would help him past the rough spots. He made the usual bullshit statements about always being
available, and they were free to come to him with issues, and that he looked forward to getting to know
each of them better.
They asked him when Lt. Marcelin would be back, which Johnson took as a shot across the bow that
he was just a visitor there. They asked about any news on how much longer they were going to be there,
but he had none to give them and told them so. The senior sergeant in the FDC asked him if hed been at
Fort Ord before he came over. Johnson replied affirmatively and asked the sergeant if hed been there.
Yes, sir. I was in CDEC, he replied, using the acronym for the Combat Development Experimental
Command. Are you the same Lieutenant Johnson that
Johnson knew immediately where that was going and cut him off with, Yes, that was me, hoping that
would be an end to it but also knowing with a sinking feeling that the first hot news of the day would be
racing around within minutes.
Outside in the darkness, he could see vague shapes moving around and the loom of the monster guns,
now lumps in the dark. He was standing with the smoke and top sergeant when the field phone next to them
buzzed. Johnson hadnt seen it. Smoke picked it up, listened, and said, Fire mission, sir, and they were
off to the races. His honeymoon was over.
The next week followed a pattern. During the daylight hours, the eight-inch howitzers would fire in
support of the ARVN, and at night, the 175 mm would crank up. The eight-inches were usually firing on
actual targets identified by observers, but the 175 mm fired what were called harassment and interdiction
(H&I) missions. H&I were targets generated by aircraft, mechanical sensors, or intelligence reports.
Johnson had a feeling they were mostly empty fields or places where trails crossed since the nature of the
target was never identified.
The 175 mm gun was a monster of twenty-eight tons with a barrel of thirty-two feet. The breech where
the shell and powder were loaded weighed six tons by itself. The gun was so powerful it could throw its
150-pound shell over twenty miles and went so high they had to post warning data to airliners flying at
thirty thousand feet! The round took so long, even at 990 meters per second that the Fire Direction Center
(FDC) had to calculate the rotation of the earth to be sure the round landed correctly. Almost all the rounds
the 175s fired were with maximum charge, and the tubes could only fire twelve hundred rounds at full
charge before they had to be changed.
When the guns fired, it was a dance. The command of fire mission reached the FDC via radio, and then
the exec was told. Hed go to the aiming circle, a mechanical, optical device used to get all the guns pointed
in the right direction. The FDC would transmit an azimuth, and the drivers of the guns would maneuver
them to the correct direction. After the FDC calculated the data that would direct the rounds to target, they
would phone it to the guns. The exec listened in on the phone by the aiming circle.
The gunners would set the deflection, which was the difference between the azimuth and the computed
direction on their telescopes, and traverse the gun to align the data with fixed aiming points. The FDC
would then transmit the type of shell to be used and the fuse type. These commands would be shouted by
the section chief to the men in the bunkers who prepared the deadly, bottle-shaped projectiles and the
powder charges and set the fuses. The shell would be carried to the gun and raised to the breech; a hydraulic
ram would then slam it into the breach. The assistant gunner would take the sixty-pound powder charge
and swing it into the breach behind the shell and close the breech block. Then the FDC would transmit a
command of quadrant, the number of degrees the barrel had to be elevated for the projectile to reach the
target.
After all of that, the section chief would read the data on deflection and quadrant back to the FDC as a
check, with Johnson still listening. If no one had made an error, Johnson would command, Fire. When
the gun fired, the barrel recoiled seventy inches, and the entire twenty-eight tons would leap off the ground
despite a large plow device at the rear designed to soften recoil and the lockout cylinders that kept the tracks
from moving. The pressure wave was so severe that he could feel it pounding into his ears. They would
ring for hours, a bit longer each time.
On night, someone had left a gallon can of white paint near the muzzle of gun one. The muzzle blast
lifted the sealed can off the ground, pulled the top off, sucked all the paint out, and crushed the can. There
were twelve men on each gun crew, each moving according to his part in the dance in the darkness. There
were red-toned flashlights in the ammo bunkers so those men could read the labels on the cans or set the
fuses. The gun itself was mostly dark, with only faint, internal light showing from the sights. Johnson
marveled at the teams efficiency and their lack of accidents.
It was in this stygian dance that the quality of the section chiefs began to show. Sgt. Vicks crew on
number two could fire twice as fast as number one, such that the gun got the nickname Big Duster after
a fast-firing antiaircraft gun. Number one was always having problems mechanically, or the gunner couldnt
find the aiming point, the powder charge was wrong, or the projectile crew took too long with the shell.
Each morning, Johnson would endure a chewing out by the operations section in the rear because number
one hadnt fired all the targets it was assigned.
The same was true, to a lesser extent, with numbers three and four, the two eight-inch howitzers. Sgt.
Masters number four was clean, the gun pit policed of trash. Each morning, number fours crew crawled
all over the gun looking for hydraulic leaks or things broken. Like number two, they disassembled their
breech daily and cleaned it; they lubricated and greased and polished. Number one spent most of its off-
duty hours with the two mechanics elbow deep in grease and filth, trying to get the gun running again.
Neither Fenstermacher nor Smith seemed able to maintain the level of readiness of Vick and Masters.
Johnson was only sleeping about two hours a day. Each night, he was up with 175 mm guns, and then
in the morning, there were maintenance paperwork and ammo inventories to check and reports to be radioed
back to the rear. Smoke helped as much as he wished, but a lot of it was on him alone. Luckily, he didnt
have to deal with the personnel issues, although he did have to break up the occasional fight between
members of different gun crews.
The first three days, the weather was clear, but sometime in the witching hours of Wednesday, it started
to rain. It rained like it only can in the tropicsno wind, straight down like a sheet. It soaked everything in
minutes. It also changed the way they fired. The 175 mms muzzle velocity was so high that if it was fired
in the rain with the normal, point-detonating fuse, the shell would explode half a second after emerging
from the tube from a collision with a raindrop. They had to fire with variable-time fuses that would only
arm after a set period. It also slowed down the process. The ground became slippery mud, and the sleek,
ballistic shapes of the shells made them difficult to handle when wet. It was, if possible, darker, which
reduced the visual safety checks.
They fired every night, but even as they did so, they realized that they were shooting in vain and that
the only thing they were hitting with any consistency was the earth. The rain brought on some accidents.
One night, it started to rain just when they got a fire mission. Johnson had laid the guns, and they fired a
few rounds before the heavens really demonstrated that Mother Nature was not their friend. The rain was
so thick that he couldnt see the gunners or the end of his aiming line. Suddenly, there was the cry of cease-
fire from number one, and he looked up to see the crew clustered around.
He jumped down from the platform that held the aiming circle and walked over to find one of the guns
crew lying in the mud. He was bleeding from the head and out cold. They called for the medics, and Johnson
asked what had happened. The story emerged that they were short one man, and the soldier who was
carrying the projectile alone had put the shell the carrier and closed the retaining band, but either he didnt
get a good closure or the band broke, and the shell fell out. The full weight of the 150 pounds had hit him
in the head and right shoulder and then fell on him as he collapsed unconscious in the mud. Hed been
extraordinarily lucky that the shell didnt crack his skull or break his collarbone or arm and that the mud
provided a soft place to land so it didnt break his ribs. He was sore and bruised and had a scalp wound, but
he was the toast of the battery as the only man to ever take a direct hit from a 175 mm round and survive.
It rained almost constantly from Wednesday of his first week to Sunday except for a brief period on
Friday when two Chinook helicopters flew up with a five-hundred-gallon rubber blivet of diesel fuel and
more C rations. The downblast of the blades blew mud and water all over and turned over the latrine. That,
in turn, spilled shit and pee, which was then blown by the blades. As the copter flew away, one of the
cannoners looked up at them. Fucking assholes! I bet they enjoy doing that. Fuckers! as he attempted to
wipe the crap off his uniform.
Now you know why theyre called Shithooks, was Johnsons reply, to gales of laughter.
The weather lifted a bit on Monday, and it became obvious that something had changed. They were
getting calls from the rear for more frequent counts of ammunition and asked for reports on the amounts of
small-arms ammo, food, and petroleum products. With the ceilings lifted, the air support returned, and
Johnson couldnt say for sure, but it seemed like the number of strikes was greater. Usually, there was a
convoy to one of the batteries every day with artillery rounds, powder, fuses, and primers. They would
bring up personnel from the rear and take back the sick and injured or those who had business there; they
also backhauled the garbage. Sometime over the weekend, the schedule had changed, and the convoys were
arriving later in the day. On Sunday, which was usually a day for hot food, it didnt arrive. One of the execs
jobs along with the first sergeant was to prepare for the defense of the battery if they were attacked, and
after the Sunday convoy failure, he stepped up his work in that area.
They had a tracked ammo carrier called a 548. There was supposed to be one for each gun, but three
were gone. But what was most important about the 548 was that it had a ring-mounted .50-caliber machine
gun. The unit organized a rapid-reaction force around the 548; they up armored the weak cast aluminum of
the vehicle with pierced steel planking held on with telephone wire. They tied sandbags onto the slope in
front of the driver and loaded the back with ammo for the big gun, small-arms ammo and hand grenades.
They had a few claymore mines, which they placed at likely avenues of attack, and ran the detonators back
into the gun pits that were surrounded by an earth berm. Two men of each crew were designated as the
defense force of each gun. All the extra personnelthe medics, mechanics, commo, and FDC guyswere
in the reaction force. It wasnt much, but it made him feel better.
War is a messy thing, and dirty. No army can fight without there being some mark. In the clear weather
of the first week, they could see some of the marks of fighting: smoke rising from burning foliage, the dust
of vehicles moving, and the gray clouds from bomb explosions. Theyd seen wave after wave of helicopters
headed west, and the vertical of the T road had been active with convoys bringing up troops. It had once all
been distant, just like the rumble of explosions. Now they could plainly see the effects of the fighting. It
was closer to them, which everyone read as meaning that the ARVN were being pushed back or were
retreating.
On Monday, there was a net radio call from battalion headquarters telling all three batteries to
coordinate between themselves to fire in defensive targets around the battery areas. These were targets
preplanned and actually identified by fire, so the data had a good chance of directing the rounds to a hit.
They were there to protect the batteries from attack. It wasnt a good sign. On Tuesday, the firing picked
up. The eight-inches were in action almost all day, firing at shorter ranges than before and using a lot of
timed and variable-time fuses, meaning they were shooting at people. The only time the guns didnt fire
was when the increasing number of air strikes were going in with bombs, rockets, and napalm.
That afternoon, Johnson showed the effect of his fathers tutelage. It started with a radio in the FDC
showing a light indicating incoming traffic, but there was no voice. The light went out, only to come back
a second later with a whispered voice. Angel Rock Two-Three, this is Gallant Hand Four-Five. Over.
Gallant Hand was the call sign for one of the ARVN infantry battalions, and four-five was the American
serving with them.
Lt. Dave Siminoyi, the officer at the FDC, picked up the handset. Gallant Hand Four-Five, this is
Angel Rock Two-Three. We hear you weak, send your traffic more loudly, over.
Rock Two-Three, Hand Four-Five. No can do. NVA less than a hundred meters away. Fire mission.
Over. There are few commands in the military that get as much respect as fire mission.
Instantly, the door of the FDC flew open and one of the FDC operators yelled, Fire mission! to the
battery. Everyone froze for a second. Then all members of every gun crew ran to their guns, pulling on flak
jackets and steel pots, since no one knew who would fire. Johnson, who had been sitting by the first
sergeants hut, jumped up and ran to the FDC.
By the time he got there, Siminoyi had responded to the observer and had taken down the observers
idea of the location. By comparing the grid to the large map, they had a preliminary range to the target eight
thousand meters away. Johnson looked up and saw that gun four was up and running, but gun three was
still down, bore sighting. He told the FDC, Three and four, and picked up the telephone to tell Sergeant
Smith he had five minutes to get the gun up. There was nothing left for Johnson to do in the FDC, so he ran
to the aiming circle and started to lay gun four. Two minutes after receiving the first call, gun four was
loading a round, and four minutes after the call, they pumped a two-hundred-pound high-explosive shell
out of the tube toward the target. Then he was busy laying three. Smith had responded well, and when the
first adjustments from the observer had been converted to gun data, four hundred pounds of explosives went
downrange.
They fired one more brace of rounds before Johnson heard the FDC say to him, Observer calls danger
close, meaning the enemy was within fifty meters of his position. Siminoyi told him they couldnt fire
those coordinates because the chance of hitting friendlies was too high. Johnson wasnt going to be denied,
though, and told the FDC to fire it high angle.
Artillery guns have a maximum range, usually achieved with the gun tube elevated at forty-five degrees.
One of the counterintuitive concepts is that any target that can be hit with an elevation at forty-five degrees
or less can be engaged at forty-five degrees or higher. The round goes in a high arc, and its descent is almost
straight down. Due to the steep descent, high-angle rounds can be used in situations where collateral damage
needs to be avoided or when the target is very close to friendly forces.
The FDC refigured the data and told the observer they were shooting high angle, so the time of flight
would be longer. Johnson was listening on the phone when the FDC told the guns to load high-explosive
shells with point-detonation fuses; he broke in on the orders and ordered variable-time fuses set at fifty
seconds. Variable-time fuses were originally antiaircraft weapons and were equipped with radio emitters
that set the shell off when it was in proximity to the target. In the field artillery, they were used to engage
ground troops because they would detonate at twenty meters up, showering the troops with deadly
fragments.
Johnson had once heard his father and some of his cronies talking about shooting VT fuses on high
angle and had asked his father to explain it. Somewhere, someone had realized that the steep descent of the
round would make the round go off at a lower point. Johnson heard the FDC tell the observer that the roads
had been fired, and then sixty seconds later tell him Splash, meaning the rounds were five seconds from
impact.
The observer was quiet for some time, longer than it wouldve taken to send adjustment. Finally, the
radio light lit up, and he came through in full voice. Rock, this is Hand. I dont know what you did, but
you just blew the crap out of those guys! The rounds just blew them apart, just about at their balls! There
isnt enough to scrape up! The mission became instantly known as Balls-High Burst.
 The day continued with the eight-inch guns of all three batteries firing almost constantly. That could
be a good or bad sign, but in this case, everyone had the sinking feeling that it was bad. When the roar of
the cannons stopped, the mutter of artillery explosions a great way off was heard along with the sad sound
of jet engines as the fighter bombers brought loads of death to the targets. The convoys were coming along
the road and going back to the rear, loaded with troops.
That evening, Johnson was trying to take a nap before the nights firing started when he was awakened
by the insistent pushing of the radio operator, Nick Santori. There was an important radio call for him in
the FDC. The call was from the battalion HQ, and it was done in green, meaning it had been scrambled by
a green box of coded switches. The call was to tell all three batteries that they were to pull back the next
day. So now, it was sure the ARVN were in retreat. A question was asked if the batteries were to RSOP (an
acronym for reconnaissance, selection, and occupation of position), and if the answer was yes, it meant that
there were no prepared positions for the battery and hed have to send an advance party to find one. This
was normally done by the battery commander, but Johnson hadnt seen him since hed arrived.
The answer was that there wasnt a need to RSOP; they would be pulling back to first Camp Evans and
then perhaps to Camp Eagle. The question was raised as to who of the three executives was the senior
officer and would therefore command the movement. There was some hesitation, and dates of rank were
given. Of course, Johnson, with the least time as an artillery officer, was senior. He squirmed and tried to
pass it to Lt. Sipiora of A Battery, but the CO ended that discussion.
They worked out a plan to have A Battery leave first, as it had the longest drive and had one gun that
was having engine problems and would slow them down. C and B Batteries would be prepared to fire in
support of A until it turned onto the vertical of the T. C would leave second, and B would fire in support.
And when the last element of C passed, Bravo would move out.
It worked until Bravo started to assemble for the march and number-one guns engine quit. Johnson ran
up to the gun as they were trying to start the diesel to no avail. Johnson yelled at Smoke to get the mechanics
and then ran to number two to get Howard Puff, who was a savant on these engines. The minutes ticked by.
Charlies dust was fading, leaving Bravo alone. Johnson considered blowing the gun up, but that would
earn him no good will; plus, he was nominally financially responsible for the piece of shit. He was just
about to order that they disconnect the final drive and hook it up to number four for towing when the engine
caught. It took a few more minutes to get the engine hatches back in place, but then they were ready.
His jeep driver, a cop named Dow from Syracuse, New York, maneuvered up the road and was next to
number one, so Johnson stepped aboard. He waved his arm to move out and sat down as Dow accelerated.
Johnson made the call to Battalion that they were moving, and the battery almost seemed to hurry down the
hill to the horizontal of the T. As they turned up the road, the radio crackled with the call sign of the FDC
van near the rear. The message told him to look back at the battery area. He could see explosions of either
rockets or mortar fire where theyd been ten minutes before.
There was now almost a thirty-minute gap between the rear of Charlie and Johnsons jeep. Alpha should
be on the final stretch by now. Just he reached the turn to the vertical, Johnson got a radio call telling them
to halt. He asked why and was told that there had been enemy action on the road and the infantry was
moving up to clear and hold the road open. They sat in the middle of the road, engines running and crews
mounted, as the minutes passed. Time slows down in various scenarios, but its never slower than when
youre waiting to have danger removed. After thirty more minutes, he ordered all the troops excepting the
drivers out of the vehicles and into the slash at the edges of the road. It was a pitiful attempt at defense, but
Johnson felt that if the attack came, it would focus on the vehicles first.
Another thirty minutes grudgingly passed, and he made repeated radio calls asking for situation reports
but got no good answer. The crew chiefs were coming up with a myriad of questions: How much longer
would it be, because the engines of the guns might overheat? Should the troops eat, as it was approaching
noon? What were they to do if the increasingly heavy mortar fire crept down on them? He had no good
answers, but Sgt. Vick pointed out that if the road ahead had been under attack, it wouldnt be long until
they were surrounded and cut off. He and the first sergeant urged Johnson to form a final defensive position
in case of attack.
 One of the advantages of being around the army for a long time is that if one is observant and open to
learning, he comes to respect the wealth of knowledge contained in the collective experience of the
noncommissioned officers. Johnsons father had told him never to dismiss the advice of senior NCOs, as
they were both more experienced and closer to the troops. So Johnson took the advice and told them to start
planning. He took his jeep and drove back along the column, talking to the troops and trying to show the
assurance he didnt feel.
It was another twenty minutes before he got back, and in that time, the NCO had pretty much developed
a plan. He listened and was impressed. He made a few changes and suggestionssome because he saw
things they didnt and others because he needed to show that he was still in charge. There was some debate,
but he cut it off and told them to start the plan in motion.
As they started to move vehicles and troops around, he took his binoculars and began to glass out the
hills and forest lines. He had to assume they were under observation, and he hoped to catch a glimpse of
the enemy and thus divine their intentions. He also had his map spread out on the hood of the jeep and
began to locate places he could direct artillery fire, which was his assignment in the defense plan. He and
Dow worked up four targets to the west: one each to the north and south, three to the east. And, without
Dows knowledge, he worked out one right on top of themselves that would be the final act. He called one
of the FDC sergeants up and told him to begin coding the data, as his men didnt have access to the code
machines.
They were about halfway through the maneuvers to set up the defensive perimeter when he got a radio
call that the infantry had cleared the road and would give an all clear in a few minutes. Johnson was stupid
in a lot of ways, but theyd been sitting on the side of this fucking road for ninety minutes now in what was
supposed to have been a quick clearance, so he had no faith they would be moving soon. He was right. It
was another thirty minutes before he got an update, and only after some dickhead in the rear wanted him to
supply a fuel-and-ammo status. They continued taking defensive measures for another forty-five minutes
before the call came to move out.
They had worked out an order of march that had him leading, with number four directly behind, then
several trucks, number one, more trucks, number three, more trucks, the FDC van, number two with the
548 and the reaction team second to last, and one of the FDC officers and the chief of smoke in a radio-
equipped jeep at the rear. No one needed any encouragement. Everyones foot was on the gas. Dow was
very nervous and kept speeding up and slowing down, and Johnson ordered him to maintain a steady fifteen
miles per hour. They turned onto the vertical and immediately had to slow down. The passage of the other
batteries and the convoys over the past ten days, along with the rain, had made the road rough, rutted, and
slippery. He called to the rear and had Smoke drive up the column and tell all the drivers to switch to all-
wheel drive. The tracked vehicles could do the road fine, but the wheels might have trouble.
They were about a mile and a half down the road when it happened. He heard an explosion behind him
and turned to see smoke emerging from the track of number four. The gun was still moving, but as he
watched, there was another explosion and he could see eyes of the driver and some of the crew go wide
with fear. The road was mined! Dow was scared and started to go slower, and Johnson, in one of those
futile acts people do in time of emotional distress, tried to reason with him.
Dow, keep the speed up!
LT, there are mines in the road!
Going slower isnt going to change that or make them not go off! Theyre only antipersonnel mines.
They cant hurt us! If we stop, were dead!
He was lying. An antipersonnel mine might not destroy one of the guns, but it could blow a wheel off
a jeep or truck and shower shrapnel around. Dow was unconvinced and continued to slow down. Johnson
ordered him to stop and change seats. Johnson took the drivers seat and told Dow to call the rear and tell
them there were mines on the road. Then Johnson started to drive tight loops from the middle of the road
to its right edge. He was deliberately trying to set off the mines to show the people behind that it was clear.
He heard Smoke, telling the drivers to stay directly in the tracks of the gun ahead.
There were a few more explosions but no damage, and it seemed like the clearance team had missed a
few mineswhich could happen. Just as he was starting to feel good, one of the trucks between number
one and number three gun exploded, and a distinct smoke trail passed in front of his jeep. The rocket-
propelled grenade, or RPG, that the Russians had developed was a fearsome weapon against light armor
and vehicles. RPGs were being fired, and one had hit the truck, turning it into a funeral pyre for the driver
and four soldiers. It was here that Johnson saw something the NCOs had planned but not told him about.
As he turned around to set a frequency on the radio to call for fire support, he noticed the crew of
number four scrambling around the breech of the gun. Then he saw the assistant gunner drop into his seat
on the right of the tube and the tube begin to level. Then he saw number three doing the same thing, and
then both guns turned at right angles to the line of march and roared toward the ambush. They went about
ten yards and stopped. All the crews were firing into the jungle, and the 548 came racing up the line with
its big .50-caliber, shredding the cover. Then two eight-inches fired.
During the long wait at the battery area, the NCOs had decided on an unorthodox defense move. Theyd
loaded full powder charges into the guns and then put second ones behind them. When they fired, the
charges caught fire, shooting out thirty-yard tongues of flame. The powder had been shaped into small
cylinders, and as they exited the tubes, they looked for all the world like the old-fashioned grapeshot of the
Civil War. The effect was amazing. Any leaves left on the trees were shredded, and the underbrush was on
fire. The RPGs stopped coming, and the small-arms fire that had been increasing suddenly ceased.
The crews on all the guns and trucks were firing into the jungle in a disorderly and unprofessional way.
An infantryman wouldve had a heart attack. But they had their blood up, and NCOs were working to slow
down the fire and to get them resupplied with ammo. The 548 turned in front of the burning truck, and one
of the reaction force jumped out and hooked a cable around its still-intact bumper. Then Johnson saw Smoke
standing up in his jeep, giving him the move-out sign.
He and Dow needed no further urging. Guns three and four were turning back into the line, and the
now-disordered heap started down the road, the 548 hauling the still-burning truck.
Sir, what about the mines? Dow asked.
Damn the torpedoes. Full speed ahead! he bellowed, stealing a line from Admiral Farragut at Mobile
Bay.
The radio was alive with calls, since the explosions and firing had been heard at the checkpoint further
down the road. He was too busy trying to be sure he had all his convoy to answer. He took a glance at the
speedometer, and they were going thirty-five over a road that made washboards look flat. Number four was
right on his tail, and everyone else was keeping up. Black smoke was pouring out of the exhaust stacks of
the trucks and guns. He was concerned that they would leave someone behind, so he told Dow to turn out
of the line and waved number four to take the lead. They sat there counting vehicles, and while some were
sporting new holes in their doors and sides, they were all there.
Smoke passed him, and Dow fell in behind them. He didnt need to be at the front. Masters and the
other NCOs wouldnt let them slow until they reached the safety of the checkpoint a mile and half farther
on. His only fear was that one of them would stall or have an accident. The guys manning the checkpoint
werent expecting a heavy artillery battery to come roaring at them and hadnt gotten the barriers out of the
way before number fours twenty-eight tons traveling thirty-five miles per hour smashed them out of the
way. The battery was still in line on the road, and he could see an infantry company on the sides of the road.
He dismounted his jeep and started walking up the line of trucks and vehicles, talking to each of the
troops and congratulating them on surviving. The NCOs were doing the same, and they met in the middle.
Sir, the first sergeant protested, you took us down a road that wasnt cleared. We could have all been
killed!
Top, Johnson replied, I got a radio message that there had been some enemy action on the road but
the infantry had cleared it, and we were cleared to move. Lets talk to the infantry guys and see what they
have to say.
The infantry were lounging along the sides of the road, not being very attentive or interested in what
was going on. The artillery contingent walked over and asked the first NCO they could find what had
happened. The sergeant shrugged his shoulders and pointed vaguely up the road. They all turned and started
to walk toward the head of the battery. They finally found a lieutenant, and he told them they should talk
to the CO. He pointed at a man standing about ten yards away.
 They walked over, and the CO turned toward them. He was about six foot two, and his name tag
identified him as Mahoney. The two joined, white bars on his steel pot told the world he was Captain
Mahoney. Most combat officers didnt wear their ranks prominently displayed, as they made wonderful
aiming points for enemy snipers. He was also wearing a chicken-plate flak vest instead of the vest type
worn by almost everyone else. Johnson was getting the impression that Mahoney was a newbie, and that
sense was heightened by the fact that he was holding his M16 by the stock behind the pistol grip with the
barrel shroud resting on his shoulder, the thirty-round banana clip pointing up.
Hey, LT, good work getting down the road. Looks like you had some trouble. He took the M16 off
his shoulder and pointed the barrel at the side of the road. The truck that had taken the RPG hit was sitting
there. The fire had burned out, leaving a red-hot shell of steel that contained the bodies of five of his troops.
Yeah, we got hit by an ambush about three miles up the road, and we ran into mines, Johnson was
mystified by the COs lackadaisical attitude.
Yeah, we got hit, sir, dont you mean, Lieutenant? replied Mahoney.
Yeah, whatever, Johnson fired back, the tension of the march, the attack, and the two hours of sleep
per day leaking into his voice. We got hit, we lost five men and a truck, and we almost got stopped on the
road and wiped out!
Lieutenant! Mahoney shouted, When you talk to me, you will stand at attention and address me as
Captain or sir. Do you understand me, mister?
Lt. Porter, the other FDC officer stepped in, Sir, we were told that the infantry were going to clear the
road, and it obviously hadnt been cleared. What Lieutenant Johnson would like to know, sir, is why it
wasnt clearedwhich resulted in five casualties?
At least someone in your unit has a semblance of military discipline, said Mahoney in a self-righteous
tone. We were tasked with the road clearance, but when we arrived, I determined that the risk to my troops
was too great. He said this with such a dismissive tone that everyone was speechless.
Johnson was the first to react, and he did so with all the passion he felt. Are you telling me that you
didnt clear the road?
Thats what I said.
So who told our battalion HQ the road was clear? the chief of smoke asked with an ugly tone in his
voice and a nasty look in his eyes.
I sent my people a few hundred yards up the road, but I wasnt going to get my people killed uselessly.
There wasnt a lot of risk to you, so I told them it was OK for you to move.
What the fuck! screamed Johnson. Not a lot of risk! Five guys got killed! Thats not a lot of risk?
What the fuck is a lot of risk to you?
Lieutenant, I really dont have to explain myself to you, and I really dont like your tone of voice.
And, once again, youre forgetting that youre talking to a superior officer! Mahoney shot back, lowering
the M16 to hang by his side.
Listen, fuckhead! Youre as chicken as those chicken plates youre wearing! He was losing focus,
and his vision was descending to blackness. He couldnt see Mahoney or anyone else, but suddenly he felt
strong arms grabbing his right arm and surrounding his chest. He struggled, but there were too many arms
that were too strong, and he felt himself lifted off his feet and turned around. He struggled more, and finally
his vision cleared and the blackness of his anger faded in the fruitless struggle.
Sergeant Fenstermacher wasnt a very good section chief, but he was tall and strong and had his arms
around Johnsons lower chest at the elbow level. The chief of smoke had hold of his right arm and was
twisting it and his drawn .45 pistol behind his back.
You dare pull a pistol on a superior officer and threaten him? Mahoney bellowed. Ill have you
court-martialed, and youll spend the rest of your life in Leavenworth, you miserable excuse for an officer!
You must be a reserve officer. No regular would dare act that way!
At this point, one of Mahoneys NCOs came over and told the captain he had a radio call that was
urgent. It was obvious they were trying to defuse the situation, just as Johnsons NCOs were doing. The
first sergeant went to the head of the battery to get it started moving to its base while Smoke, Vick, and
Masters frog-marched Johnson the other way.
 5
The black veil of his remembrance of that terrible time lifted as the story ran out in his head and his clarity
began to return. Johnson had been ready to shoot Mahoney and swore that if he ever saw him again, hed
finish the act. And now, at the foot of the conference-room table in the Bear Stearns office in San Francisco
stood Mahoney! There was no mistaking himthe same tall jerk with a dismissive look on his face, giving
off an air of condescension. Johnsons recognition was confirmed by the slack-jawed look on Mahoneys
face. He knew he was in the presence of person who might kill him and could surely discredit him.
Johnson turned on his heel and left the conference room and the office. He took nothing with him, just
went down into the Montgomery Street BART station and home, where he collapsed into bed and lay in a
fetal position for the rest of the day and night.
The Tulalip deal died. Doug Luna, who was a navy veteran although hed never served in combat,
called to check in on Johnson, and Johnson gave Doug the broad strokes. That was all it took. For all the
abuse Indians have taken at the hands of the United States, theyre patriotic and respectful of the military.
EF Hutton was fired and told exactly why. The tribe sent a letter to Bear telling them they were going
another direction, and that was that. Mahoney left EF Hutton. The rumor mill reported that hed joined a
Catholic religious community and was spending his time promoting peace. Regardless, Johnson still wanted
to kill him.
 Chapter 36
Comedy and Blood
The incident with Mahoney had thrown Johnson back into post-traumatic stress. He became listless, startled
easily, was crankier than normal, never smiledwell, that wasnt newhe had trouble focusing on tasks
and was hyper vigilant. PTSD was just beginning to be understood. In the old days, it had been called battle
fatigue, and the older vets thought the Vietnam guys were a bunch of weenies. Even though 20 percent of
the Vietnam veterans were homeless or unemployed, the Veterans Administration denied PTSD was an
issue.
Johnson didnt fully understand his affliction and was himself dismissive of the growing wave of
medical and psychological complaints of his fellow veterans. He had issues, but in an industry where any
show of weakness could be a death sentence, nothing short of an apocalyptic meltdown was going to get
him to admit his problem publicly. Hed spent years and tremendous amounts of energy holding in the
terror of seeing twenty-five young men die. He told no one. Men didnt talk about such things, particularly
men who had been in combat. His father had seen more combat than Johnson, and hed never talked. What
right did his son have to complain? Thats how he viewed it: as a complaint.
The US economy was booming. There was a new spirit in the nation, exemplified by a book that had a
powerful effect on Johnsons thinking: Wealth and Poverty, by George Gilder. After he realized the
fruitlessness and hypocrisy of radical campus politics and the aimlessness of other leftist radicals, he
steadily became more conservative socially and politically. The Democratic Party seemed to be making a
fool of itself, chasing all sorts of weird causes and every group claiming victimhood who showed up. In
San Francisco, someone actually tried to form a union for the hookers. The irony of collective bargaining
for the practitioners of a crime was lost.
The economies of Europe werent doing well. Seventy years of the type of creeping socialism practiced
by the governing elite of Europe had sucked the animal spirits out of the populace, leaving the veneer of a
better life. European currencies plunged to new lows against the dollar, which, to the angst of the Europeans,
unleashed herds of American tourists. The world seemed to be changing gears politically, with conservative
or at least center-right governments taking power in most of the Western nations, which seemed to offer
hope that the headlong march to fiscal and social destruction might be stopped.
The stock market in 1985 had its best year since 1975 as more and more institutions gave up waiting
for inflation to return. The Dow Jones hit 1,300 for the first time, more than doubling from its bear-market
bottom of 1974. The market seemed to dance by the obvious dangers in the world: the rash of airplane
hijackings, kidnappings, torture and death in Lebanon, airplane bombings, and even the hijacking of a cruise
ship. These were all signs that things were disturbed, at best. Still, the markets moved higher.
At midyear, Johnson had started working with his longtime friend Geoffrey Standing Bear on a
potential bond deal for the Navajo. The Navajo were the largest tribe in the country (though the delightfully
named Wilma Mankiller of the Cherokee disagreed), and being their underwriter would open a lot more
doors. Geoffrey was an Osage from Oklahoma and was the legal counsel to the Navajo chairman, Peter
McDonald. It would be the largest Indian deal anyone had done.
He never knew how it happened, but one day in September, he was approached by Garys assistant, Pat
Hagen, and the office cashier, Sylvia Blacker. They explained that they were in charge of planning the
Christmas party and wanted to talk to Johnson about his participation. He was leery for several reasons, but
mostly because he had found the last party very low class and sleazy. After the party, Dianne had told him
that some guy had confronted her near the elevators and propositioned her by grabbing his crotch. Dianne
couldnt describe him in any detail, and even though everyone had a name tag, couldnt remember his name.
For the first time in their marriage, Diannes porous memory had a positive effect. It kept Johnson from
killing whoever it was.
The two ladies had observed that during the 5 percent of the time when Johnson was in a good mood,
he had good comic sense, quick wit, and the ability to extemporize. Over the year, theyd collected pictures
of happenings in the office, and they wanted him to narrate a slide show. Johnson loved having his ego
stroked, and being in control it made him feel wanted. For brief periods and in certain circumstances, he
didnt mind making a fool of himself if it got a laugh. He loved it when someone else recognized that he
had a talent.
The challenge he faced was that as an introvert, he could only be outgoing for short bursts. Hed go to
a party, and the interaction tired him, and he had to have time to recover. He had to resist Diannes love of
parties, because if he didnt have time to himself over the weekend to recover, he was tired and grumpier
on Monday. He liked being alone or with the family or in small groups. Even the small groups could be
tedious, because there just werent that many interesting people. His success on the vacations he and Dianne
had taken was usually based in his being buzzed or downright drunk a good portion of the time. He didnt
do well in prepared, heavily rehearsed or structured presentations. He was best off the cuff and seemed to
have a talent for saying exactly the right things at exactly the right times to change the tone of a presentation,
bail someone out of a tight place, or deflate some pompous bloviator. He could be and often was very
sarcastic, but the sarcasm was also usually funny.
The Christmas party was a roaring successat least his part of it. Gary and the rest of the office had
had no idea what the entertainment would be, so closely did Pat and Sylvia hold the secret. Hed written
most of the patter and had it by memory. The night of the party, he was decked out in a tux, and Dianne
looked smashing in a tight gown with a plunging neckline. There was the usual horseplay before dinner,
with the younger brokers getting steadily more drunk and stoned. Since there was no evidence of a band in
the ballroom, ugly talk started about the party being cut back.
A few minutes after dessert had been served, Johnson inhaled his and walked across the dance floor.
No one seemed to notice. He had the remote for the slide projector in one hand and took the microphone
from the stage. He had to roam a bit to be funny. He got everyones attention and said, Gary, all night
youve been wondering what the entertainment was. Well, your worst nightmare is here. Im the
entertainment!
There were a few catcalls, like Take it off! and Leave it on! and Please dont sing! They died
away with some laughter, and he launched into the show. It was hilarious, even though the people in the
office were the subjects of the pictures. Theyd forgotten them, and having them pop up on a big screen
was unexpected, fulfilling one of the required elements of humor. Hed worked up some slashing
comments, and the laughter of the crowd added to the fuel of lower inhibitions stoked by wine and booze.
He got a standing ovation and a lot of hugs and back slaps. Gary was even impressed. He was temporarily
stoked by the adulation, but the effort tired him out, and he and Dianne slipped away early, supposedly to
relieve the babysitter.
As 1985 slid to a close with the stock market seemingly on its way to the moon and everyone feeling
happy and content, something happened that partly restored Johnsons rapidly declining faith in humanity.
It came from a court ruling in Texas that ended the Getty Oil buyout saga. Johnson had known Getty
for a long time; he had a client who was a senior vice-president. Getty was a legendary company founded
by J. Paul Getty, who at one point was the richest man in the world. Gettys management had had a
dismissive and superior attitude about the energy industry that could be surprising.
One of the boondoggles of the Carter Administration was the Synfuel Corporation. With the rise in oil
prices in the 1970s, the United States decided it needed a way to break the hold of the camel jockeys, as
one pundit indelicately put it, on the industry. The fact that a bunch of people in countries that didnt even
have a McDonalds and who a generation before were pounding copper pots in a souk could force red-
blooded Americans to wait in gas lines to fill up their five-mile-per gallon cars was intolerable. The solution
was to find a way to use coal and oil shale to create synthetic fuels. The economics were shaky from the
beginning, but the advocates promised that if we invested now, prices would fall in the future, and we would
be awash in cheap fuel. The flaw in the logic was that if the United States was willing to pay fifty dollars a
barrel for synfuel, the Arabs would price their real oil at forty-five dollars, and since they could lower prices
to buy the market and the Synfuel Corporations costs prevented them from being truly competitive, the
Arabs were still in control.
In the failing years of a failed administration, the bill passed, authorizing billions in spending with a
great thumping of chests about doing the right thing. In due course (like immediately), Wall Street
recognized that there were billions floating around with no home. So, out of the kindness of their hearts,
the Wall Street firms vowed to find it onein their pockets. The first step was to show they cared, so they
assigned research analysts on the bottom of the pecking order (usually women) to write reports on Synfuel.
Johnsons client at Getty Oil was a hugely fat man who filled his desk chair to capacity. Johnson
wondered if the guy had a catheter, because getting up to go to the john wouldve required the assistance
of a crane and a truck. The report Morgan Stanley finally produced was four hundred pages long, and he
mailed it to his contact at Getty. A few weeks later, Johnson was in LA on business and stopped to see the
fellow. They chatted, and then Johnson asked him if hed seen the Synfuel report.
Yeah I saw it. A lot of trees died to produce it, was the reply.
Do you think it has any merit? asked Johnson, using one of the sales techniques he liked, which was
asking the client a question that allowed him to demonstrate his expertise.
The client cleared his throat, shuffled some papers, and looked up. I didnt think it was worth a bucket
of warm piss.
Really? responded Johnson.
Too long, the economics are all wrong, her projections are way off, the processes wont work, and
besides, what does a cunt know about oil?
The remark was unexpected both in its crudity and the fact that it was issued in an office with women
in close proximity, Johnson had never heard a senior executive of a company use such language before, but
there it was. That was the Getty way: direct, from the hip or shoulder, and unapologetic, saying, Were
Getty, were the best, and fuck you if you dont like it.
When J. Paul Getty had died, the leadership (or at least the largest blocks of shares) devolved on the
Getty Museum and Gordon Getty, J. Pauls son. If there was a more unlikely oil company board chairman
than Gordon Getty, he had yet to be born. Gordons qualifications were that he was a San Francisco socialite
and famously unknown music composer. Gordons music was the opposite of Mark Twains famous line
that Richard Wagners music was better than it sounded, Gordons was worse that it sounded.
Gordon soon fell into the dominate theme of Wall Street, improving shareholder return, and began
to talk, without authorization by the board of directors, to some of the now infamous corporate raiders who
were taking advantage of cheap money to take over and dismember firms. Gordon set off a war for Getty
that would last from 1982 to 1984. In the end, Texaco bought Getty even though the board had a deal in
place with Pennzoil. It was the ruling on that lawsuit that renewed Johnsons faith a bit.
The Texas court had ruled that Texaco had illegally interfered with a contract, an offense called tortuous
interference, and Pennzoil should be paid $11 billion plus interest in compensation. There was no appeal
possible, and the settlement drove Texaco into a bankruptcy. The Getty deal was one of the stupidest
transactions ever done on Wall Street, and thats a high bar. It showed all of Wall Streets dirty laundry. It
showed that loyalty, which is basic to the fiduciary relationship, was an illusion; loyalty was to the dollar,
not the clientfuck the client if you can get higher fees. The herd instinct was evident; everyone had
worshipped Getty for its sagacity and success, and then suddenly, everyone on Wall Street, most of whom
had never run anything more complex than their yachts, was convinced that Getty was managed by fools
(which happened to be the case but was merely coincidental).
What this did for Johnson was raise the issue of whether his moral compass and that of his industry
were in alignment. It was, for Johnson, a demonstration that the honor and wisdom and genuineness of the
legendary Wall Street had been replaced by a group of amoral jerks. It drove another nail in the coffin that
Wall Street was constructing for its business model and demonstrated that building a company wasnt the
way things were done any longer; the way to wealth was buying and selling them using other peoples
money.
Two weeks before Christmas, Johnson had received an all-black Christmas card from Dick Evans
widow, and he was congratulating himself that it hadnt been worse, thinking maybe she was getting it
under control. Johnson had a fairly highly developed sense of situational awareness. He swiveled his head
a lot, looking for threats and routes of escape. Like most people, he looked mostly to the right.
As he walked out past the receptionist, he could see no threat to his front or the right, but he hadnt
cleared his left. Out of a short hallway leading to a fire escape, the woman ran with an open container in
her hand. Johnson saw the movement peripherally, but his reactions were slowed by time and distance from
danger. At two feet, the Ghost of Christmas Past launched a quart of red fluid, and her aim was dead-on.
He was splashed over his head, face, and hair; his blue suit was now red, as was his brown briefcase.
She screamed as she ran across the elevator lobby. Thats the blood of my husband, you fucking
murderer! Another Christmas ruined.
 Chapter 37
Duty, Commitment, and the .357 Vasectomy
The year 1985 had ended with the bang of the attack by the Ghost of Christmas Past, which had added to
the legend. The cleanup of the blood-red paint took days. Johnsons $800 suit was ruined; his briefcase
looked like it had been used by a grave robber to transport body parts. The floor and the hall of the office
had to be recarpeted and repainted. Someone had reported the paint as blood, and with the fear of AIDS,
the public-health people had camped in the elevator lobby for several days.
Johnson was changing. He didnt know how or why, and he wasnt sure he liked it. It was the change
that comes to all from age, collected experience, cynicism, disappointment, and having hopes dashed. It
was change forced on him by changes in those around him. Their reactions to stimuli changed, forcing
Johnson to compensate. Even if he resisted the changes in interpersonal actions, he couldnt resist the
changes due to his environment. Hed chosen to live in interesting times, and the world around him was
morphing. If he was to survive, he had to change, to adapt, and that eventually forced changes in his beliefs
and actions. Times of great change are times of great discovery and great opportunity. Regardless of the
opportunities, the discoveries Johnson made were of more and more of his faultsor what he saw as his
faults. He knew he had a lot of them, but just when he thought he knew them all Dianne would help him
find more. He apparently had so many faults, it was hard to see how hed survived this long. They were so
numerous, there was no room for any of his erstwhile gifts.
The changes in society were increasing in number, frequency, and magnitude. Communism was on the
run, combated by a muscular foreign policy; the gay community was changing the way people viewed the
most elemental aspect of their livessexuality; feminism was exposing centuries of discrimination and
creating a permanently angry class of people who saw wrongs in every action regardless of how benign;
medicine was advancing in all areas, from test-tube babies to artificial hearts, angioplasty, joint
replacements, and less invasive surgery.
The world was experiencing a great moderation in inflation, and with it, increased investment returns.
Companies were ending pension plans that promised defined benefits, replacing them with plans of defined
contribution and employee self-management. The failures of the brokerage houses and banks during the
bear market had consolidated the industry into fewer, larger hands that had more impact on the economy.
The world was changing from the geopolitical orientation prevalent since the end of World War II toward
a world of geo-economics and increasingly American homogeny.
Advances in technology were increasing the speed of communication and the rate at which enormous
amounts of data could be analyzed. It was making it possible to transmit pages of a document almost
instantaneously and almost legibly via facsimile machines. Telecommunications satellites were driving the
costs of long distance and international calling to the floor. Cable television allowed options beyond the
alphabet networks and fostered the proliferation of special-content programming such as all news or
financial news.
With the increased attrition of the boomers parents, the morality, ethics, and beliefs of the older
generation came under attack as too restrictive and not with it. In the aftermath of the great American
tragedy of Vietnam, the concepts of service and sacrifice became targets of derision. Personal responsibility
came under attack in a rising culture of narcissism and self-interest. AIDS and feminism unleashed the
cancerous concepts of affinity politics and victimhood. The press became captive of journalism professors
who were spear carriers for the antiwar, pro-victim philosophy, and with the passage of Huntley, Brinkley,
Reasoner, and Morrow, it became steadily sensationalist and youth-and-beauty oriented and less objective.
The public, after long absence from the financial markets, was returning, and with it came a need for
more and more brokers. More companies were issuing stock and bonds in greater amounts, and all the banks
and brokers needed a way to sell it all, so the employee counts in the finance sector skyrocketed, as did
profits and abuse. The declining interest rates and inflation made money cheaper than it had been in a
generation, and the concentration of banks and brokers made capital more available to more people. Big
companies change slowly, so many hadnt recovered from the effects of the downturn and became targets
of those who could access the available and low-cost money.
When Johnson had started in the industry, stockbrokers and finance folk were accorded the same respect
as turds in punch bowls, but now, just over a decade later, brokers were sought out for their wisdom, and
financiers were being lionized as the new face of industry. It was all illusion, of course, but at its base, the
financial sector sold illusion at very fancy prices.
In such an environment, any person wouldve been tugged and pulled to change, and regardless of
desire for it, people would be changed. The forces were that great. Those who thought little and planned
less were most successful adapting to the changes, as they presupposed that living life was done in the
present moment with little concern for either the past or the future. It must have been a million times, after
Johnson had tried to supply historical perspective to someone, that he heard the line, That was the past.
Things are different, and you cant live life based on history and myth. As if what they were doing wasnt
a worse kind of myth.
One of the fruits of a lonely, introverted childhood was that Johnson had read deeply, and because what
he was reading was weighty, he had learned to think deeply and long about concepts. He had a nearly
unquenchable thirst to understand and accumulate all the knowledge about a subject. By the end of high
school, hed read Das Kapital and The Communist Manifesto trying to understand communism and to
pronounce it nonsense.
Hed looked into religion but rejected formal, institutional religion in favor of something formless and
self-focusedthe exact opposite of what religion was about. He read Plato, Aristotle, Cicero, and Cato and
a number of the European philosophers such as Heidegger, Camus, and Sartre. Hed been exposed to
Voltaire, Rousseau, and Montesquieu, and hed made a start on Kant and Nietzsche. He was familiar by the
end of college with Mill, Locke, Hume, Hobbes, Burke, and the other giants of English thought.
Hed read widely of Benjamin Franklin, Jefferson, Washington, Lincoln, Adams, and Monroe. He
couldnt just be exposed. If it interested him, off he went into study, self-directed. Then hed think about
what hed read and mash it up into pieces with stuff hed gotten elsewhere, and then hed synthesize it into
something he could believe in.
He was always running from a goblin of his mind: he feared that he wasnt studying the thoughts of
these men with integrity; it was a tumultuary process. He felt he was taking what he wanted and leaving the
more difficult and troubling aspects of their thought alone. Somehow, that seemed wrong. To him, at this
time, gray wasnt a color on his spectrum of thought. It was yes or no; it was Johnson or no. There was
nothing in between. He didnt know the term for it, but he was constructing a binary world around his own
understanding of very challenging concepts.
Still, he felt inadequate: not smart enough, not knowledgeable enough, not handsome, athletic, suave,
and sophisticated enough. He wasnt good enough. So he spent time trying to prove himself to others. He
was so shallow that he believed others opinions of him mattered. The only one who could affect his future
now was Dianne, and she was doing her level best to make sure it was cloudy. To be a salesperson, you
have to believebelieve in the product or be able to convince others that you do, regardless of your true
state of mind. Believe in yourself, because ultimately, that was all you had. You had to be like the Little
Engine That Could. I think I can, I think I can, had to be a constant affirmation. Some people had always
believed in themselves and the future; they could withstand the constant negative hammering. But not
Johnson.
He was conflicted in the extreme. While he gave off the aura of being self-contained, a rock long on
strength and short on emotion, it was a pose. On one hand, he wanted to be caressed and chucked under the
chin and told he was valuable and good; on the other, he felt that being out front was arrogant and selfish.
So he tended not to place himself in those positions, choosing rather to be quiet and then do what he was
supposed to do. He began to worry about himself and his emotional makeup. He wondered if hed become
so inured to death and so cynical from the investment business that he couldnt feel emotion as others did.
This came home in late January 1986, when the space shuttle exploded on blastoff. One of the new
innovations was the addition of television screens to the trading rooms. Since the bull market had started,
a few financial shows were being broadcast, and so powerful had they become in passing on the rumors of
the day that everyone watched them.
It was midmorning when the explosion occurred. Johnson was up on the institutional floor, talking with
Bob Muh about a deal that was pending. One of the institutional traders popped his head into the office and
said, The space shuttle exploded! Both Johnson and Muh sat stunned for a couple of seconds. Then they
both leaped up and ran to the trading room. Everyone was standing up, looking at what was then a giant
television of twenty-nine inches, showing the replay. The world had stopped. The phones, the lifeblood of
the brokerage industry, lay silent. There was no talking in the otherwise noisy room. Everyone was glued
to the TV.
Then the phones started to ring. It wasnt a ring of commerce. Through the phones flowed every
tasteless, sophomoric joke ever heard.
Hey, what does NASA stand for? Need another seven astronauts! Gotta hop.
You hear that all the astronauts had blue eyes? Yeah. One blew left and the other right.
Of course, the salesmen and women had to repeat the lines to their friends and customers, so they spread
like a plague. It went on for days. Finally, after the twentieth repeat, they stopped being worthy of listening
to. There were some who were saddened by the loss of the seven, and focus fell on the civilian teacher,
Christa McAuliffe, particularly. There were those who were glum and downbeat, but not Johnson, he felt
nothing. No grief, no concern, not even a care for the families of the dead. He was worried about that.
He asked himself if he should feel grief after all seven people died and children were made orphan and
women widowed. The president called for a day of mourning; the news media was filled with pictures of
grieving children and parents and saddened public officials. Johnson was unmoved. He cared not a whit.
He knew none of the dead or their families. They had been volunteers and knew the risks, so why the grief?
He actually got mad because no one had grieved for him and his struggles or for those close to him he had
lost. He was so emotionally delinquent that he didnt recognize that his anger and unwillingness to become
emotionally involved were, in fact, grief.
He was once again hiding the true emotion. He was becoming quite emotional and passionate about
things, but he didnt respect the force of passion. He was so stuck in his fact-based selling and investment
method that he failed to recognize that not expressing his passion was the one thing that kept him from
really launching his career to new highs. Instead, he was afraid of his passions and was driven by the idea
that passionate people were in some way demented. He bottled it up and buried it deep. Even if hed wanted
to show his passion, he was constrained. Dianne was eager for him to be passionate in bed and about her
causes. She confused his passion for causes of the mind with those of libido and couldnt understand why
he wasnt jumping her bones four or five times a day.
Several times, he attempted to have a conversation with Dianne about his conflicts and struggles, and
she had a simple answer. Dianne was a rabid Roman Catholic. Diannes mother was a zealous, unforgiving,
judgmental Catholic who saw everything in terms of venal or moral sin. Most of Diannes siblings stayed
nominally Catholic, but werent really practitioners if there was a good reason not to practicelike football
on TV or hunting or washing their hair. No, the adamant one was Dianne. She was in this way very much
her mothers daughter. Logic and reason were sacrificed on the altar of her belief in Catholic theology. She
was usually wrong about what it was, but that never stopped her or her mother from preaching endlessly.
All Johnson needed to do was to give it up to God, in her words, and become a Catholic. She couldnt
conceive that her husband was struggling with the first element of Francis Bacons statement: that a little
knowledge drives a man from God but a great deal of knowledge brings him back. Her belief was
instinctual, basic, and infallible. He needed intellectual anchors and integrated theology.
There is little more dangerous than an untrained mind delving into the realms of either psychology or
philosophy. The untrained mind is like the college freshman who, having taken an introductory psychology
course, can suddenly diagnose paranoia, catatonia, and other mental illness. They find these conditions in
blinding numbers, and for a while, all is defined by their untutored enthusiasm. Johnson had noticed this in
his association with Alcoholics Anonymous: AAs methods became the total focus of the recovering
alcoholics life, and its proponents were constantly telling people they needed to go back and work through
number six, or nine, or something.
 Johnson was looking for something that he couldnt find because it didnt exist. He wanted a framework
of ancient birth that would provide a way to define and understand everything he was experiencing. He
looked high and low for a school of thought that would work, and because he didnt have anyone he could
talk to in order to gain perspective and to challenge his thinking, he had to do it himself. Hed tried to
explain to Dianne what was going on, and her answer was for him to devote more time to her and the kids.
She also suggested that if he made love to her more often, it would help him. Oh, and by the way, he should
just give it up to God.
Another acquaintance told him to stop trying and being unhappy. He should just get over it. Another
asked him why he couldnt just accept what was going on. Both answers were incorrect for himthe first
because it reflected no consideration of his quest, and the second because he just couldnt. It wasnt like he
could go to the top of some mountain with the hippies and other debris of society to find enlightenment. He
had to sandwich it in between duty at the office, duty at home, and the other responsibilities of an
increasingly fast-paced world.
It was a period of reflection in his life that occurs more or less in introverts depending on their degree
of introversion. He never did find the one universal school before he was called back to the reality of the
world he was in, but not before he began to think about a set of questions that would haunt him for the rest
of his life. What was duty, and what was commitment? How did they differ? And what were the edges of
each construct?
He was now thirteen years into his marriage and his career, and not totally happy in either. He wondered
if hed even been in love with Dianne, or was it that shed paid attention to a person starving for approbation,
and hed confused that with love? Certainly, she was challenging on many levels to him.
He was unable to have what he thought of as a frank or deep conversation with her. Shed start on some
story that wouldve tested the patience of Job to listen to. Or shed demean his concerns or his thoughts
with a fundamentalist religiosity that left little doubt and less understanding. Or shed diverge into some
dissertation on Edgar Cayce and how, instead of reading philosophy, he should just read Cayce, and all
would be revealed. The irony of the fact that Cayces beliefs were largely anti Catholic never entered her
mind. In the depths of his intellectual struggle, he almost admired her simplicity and lack of depth. He
found it also in those he worked with. He wished he could just accept and go on and be malleable to the
winds of change.
Somewhere hed read that commitment was duty given action, just as ministry was faith in action. But
that didnt seem satisfactory to him. He felt a sense of duty to Dianne and the children; he felt hed taken
on a moral commitment in marriage to provide for them and to love them always. He observed that there
were two types of love, one expressed as I love you the other as Im in love with you The first was the
kind that developed with mutual respect and reciprocity and acceptance of each, the other the love seen
during the honeymoon period where the two chewed on each other constantly. Johnson wondered if he was
always committed to discharge his duty once he agreed to take it on.
Cicero had written a long essay on duty and talked about its sources, and the kind of duty that seemed
to go directly to Johnsons turmoil was that which arose from ones moral expectations of himself. Hed
always thought of himself as highly moral; given his background, it wouldve been hard not to be, and his
high moral standard imposed a duty on himself to always be morally better than others. Because he prided
himself on a high moral sense, he expected that hed always follow its more difficult path, and his
conception of his duty as moral demanded that he be perfect.
He was not and never would be, but he had always wanted to be perfect in thought, action, and deed.
He punished himself mentally (and physically, via IBS) when he felt hed failed. His sense of duty required
him, he thought, to accept abuse. That was the reason he hadnt quit Morgan Stanley during the Insel mess.
He couldnt impose his moral standards on clients; after all, they paid his living, but he could and did judge
others who he thought were of no consequence in his life. In this, hed failed to understand the teaching of
the Buddha that every person one meets, regardless of how seemingly unimportant, is significant.
Johnsons version of the moral high ground led him to hurt others. He was always ready with a judgment
or an opinion on someones conduct, and he wanted to be seen as smart and witty. His chosen tactic was
the cheapest of all methods: sarcasm. When motivated, hed be nasty and really hurtful. Bear Stearns had a
female bond analyst named Nancy Havens-Hasty, and Johnson didnt value her work. One morning, during
the sales meeting, a report shed written on the credit quality of the bonds of the Mary Kay Cosmetics
company had been discussed by one of the brokers Johnson considered loathsome. Johnson had read the
report and had a very low opinion of the rigor behind it. When the broker had finished waxing in admiration
as a way to sell some bonds, Johnson raised his hand and said, Anyone who has seen Nancy Havens-Hasty
knows that she knows nothing about cosmetics.
It got one of his desired effects. There was huge laughter; it also shut the other broker up. But it had
several undesired results as well. Someone at the meeting apparently told Havens-Hasty about the comment,
which she resented greatly, and she stopped being willing to talk to brokers who wanted to sell junk bonds.
That hurt others who werent the intended target. In the army, that was called collateral damage. It also
lessened respect for Johnson in the office.
He could have been a beloved figure. He was probably smarter than almost anyone there, although he
himself wouldve denied it. He now had a wealth of experience the younger, more impressionable brokers
lacked. On the rare occasions when he decided to share with the office an idea hed researched, his
colleagues hung on his every word. If hed turned his gifts to the good, he could have had the acceptance
hed always wanted. But he turned them instead to meanness.
Of course, Johnson would never admit to meanness. His self-dialogue justified the mean-spirited
attacks as puncturing the arrogance of others and exposing stupidity before it did more damage. He was
Phil Johnson, crusader forsomething. In the end, it was all bullshit. No one cared what he thought, and
all he did with his mean spirit was drive others away and make his life more difficult. It was impossible to
turn it off when he left the office, and he turned it on Dianne, the children, and everyone who dared dispute
with him.
Part of Johnsons difficulty was his unhappiness with Bear Stearns. He was out of his element in a shop
that focused on transactions and turning over clients. He cared too much about his clients to treat them the
way Bear brokers treated people. He was committed to treat them right, because theyd come to him and
had stayed with him, so he developed a sense of duty that was ultimately related to self-interestwhich
meant it wasnt duty at all, but necessity. He felt a duty to Bear Stearns, since it was they who had rescued
him from failure, which was always a good way to get Johnson hooked: do something for him in a moment
of need. Bear, of course, felt no duty to him and wouldve rejected the concept. It was all self-interest. But
Johnson felt he owed Bear a duty to stay with the firm, regardless of his personal unhappiness.
Johnson never considered duty to be reciprocal, which made him easy to manipulate. All someone had
to do was phrase something in a way that made it sound noble for him to do something, and Johnson was a
goner. He never asked the other person to be dutiful to him. Anyone was free to do whatever, and if it hurt
Johnson, that was too bad. It was the price of duty, just as the possibility of dying for your country was.
The year 1986 continued along, with the market hitting record levels almost monthly. March brought
news that the laughter of January about the space shuttle had been misplaced. The crew hadnt died
instantly. Navy divers found the crew compartment and the bodies; they had probably suffered horribly. A
few days after this sobering event, Microsoft of Redmond, Washington, a town no one had ever heard of
before, did a public offering of its shares. Johnson was somewhat of a brief celebrity because hed actually
visited the company and knew where Redmond was.
All this reflection and personal anguish were placed against the backdrop of a world seemingly out of
control. The central-casting villain Kaddafi went too far, and Ronald Reagan ordered a bombing strike. The
F111 bombers werent allowed to pass through French airspace. Johnson was the reigning military expert
in the office and was asked his opinion of the mission. He got very jingoistic and reminded them that Mark
Twain had said there were three reasons not to believe in Godthe simultaneous existence of houseflies,
the US Congress, and the French. Johnson bathed in the brief glory of stealing someone elses wit. The
Russians fucked up and melted down a nuclear reactor in Chernobyl, another place no one had heard of,
but the TV had legions of pundits who all seemed to know all about it. A spy was caught and presented a
real problem. Jonathan Pollard wasnt spying for Russia or China or Korea or the places that hated the
United States; he was spying for Israel, supposedly our strongest Middle East ally.
 The tech revolution continued, with further proliferation of personal computers. Their spread and
usefulness was improved when something called a LISTSERV was invented. It was a program that allowed
something called e-mail to be sent and tracked. It was also the beginning of the end for the US Postal
Service.
Three new terms joined the language. The first was going postal. A postal worker entered a mail-
processing center in Oklahoma and shot fourteen of his fellow workers and himself. It was a shock to find
out that postal workers were under stress. Compared to the brokerage industry, it seemed to be the least
stressful job in existence. After all, everyone in the brokerage industry knew that only losers worked at the
post office. The second was the creation of The Economist magazine (which the Brits called a newspaper)
and the Big Mac Index, which demonstrated purchasing power parity by comparing the cost of a
McDonalds Big Mac at various places in the world. The final term was Oprahafter Oprah Winfrey.
The Bear Stearns office was the great catchers mitt of the San Francisco brokerage community. It
seemed as if all the flotsam and jetsam of the town came to work there. Johnson had to remind himself that
he had once been a piece of flotsam. He watched in amusement as Gary staffed the office. The idiots who
had been there were still there and being coddled and caressed, but there was new influx of idiots. There
was one guy who, literally three months before, had been a house painter. Hed been painting Garys house
and theyd started talking, and now, here he was, a fully-fledged stockbroker out ripping off clients.
There was a Mexican guy who arrived out of seemingly nowhere. His name was Memo Margolis. Those
in the know pronounced the first name Meemo, and the rest called him the word for a kind of letter. Johnson
couldnt figure the guy out. He seemed nice enough, but there were times that he was manic in his
excitement. He didnt seem to do businessor, at least, his business seemed to come effortlesslyand he
was quickly one of Garys favorites. There was a very overweight guy who turned out to be a rabbi. He was
a nice enough fellow but a real putz. Then there were the refugees from one of the failed brokerages.
The small firm had gone under in a sea of controversy, which is hard to do in a bull market, but they
accomplished it. From the mess, Bear ended up with three brokers. The one that stuck out most prominently
was Peter Vandermarch. Tall, dark haired and bearded, he dressed well and seemed to be a nice guy. Early
on, hed reached out to Johnson for some information and ideas and seemed to be genuinely grateful for
the help. It turned out in the end that Peter was like most things in the brokerage industry: an illusion. He
fell from grace in an avalanche of claims of churning accounts, unauthorized discretion, and misapplying
client funds. He just disappeared one day.
Gary Wollin was an incumbent Bear Stearns broker who strutted around the office like he was the cock
of the walk. He was an active member of the Rotary. Since his office was next to the municipal bond office,
Johnson had to have contact with him. He was always talking loudly on the phone in a tone, pitch, and
volume designed to attract attention, calling someone from some Rotary directory and telling people he was
a Paul Harris fellow, whatever that meant.
When you turned left from Johnson and Donnellys office, there was a long corridor that ended with a
ninety-degree turn to another corridor. To the left just before the right angle was the muni department, and
jogged to the right was Wollins office, which looked down the corridor toward Donnellys office where
Johnson sat. One day, Johnson was walking to the muni office while looking at some offering sheets. He
looked up to correct his course, and he noticed a reflection off something steel coming from Wollins hole.
Johnsons long stride brought him five feet closer in two steps, and it was then he realized what he was
seeing.
Over the last year a radical rabbi had arisen by focusing on Jewish self-protection the motto of his
movement was, Every Jew a twenty-two, referring to a small-caliber weapon. The caliber had obviously
been chosen for its alliteration, since a .22 was pretty useless in a real gunfight. Wollin had taken the rabbis
message as a mission, and what Johnson had seen was the sun glinting off a chrome-plated .357 Magnum
pistol with which Wollin had been tracking Johnsons movement down the hall.
PTSD and training often combine in some unusual ways. Johnson yelled, Gun! and dropped behind
one of the sales assistants desks, getting a nice shot of her upper legs (and potentially panties, if shed been
wearing any). Then he began to move in a duck walk to his right, keeping the return arm of her desk in
front of him. He was convinced that Wollin was going postal. Why else would you wave a gun around a
crowded office? Johnson worked his way around the return arm and into the area of another sales assistant.
Like most people in a real-life shooting incident, at his shout of Gun! everyone had frozen and was
looking around like a bunch of seagulls at a feast. They should have all been under the desks. Johnson was
convinced that they were all casualties, but he didnt care. That was their choice. He was determined to try
to take out the shooter. There had been no gunfire, so Johnson took advantage of that to move up the next
return arm. He was now six feet or so from the door to Wollins office. There was no way he could rush the
office unseen; the front wall of it was all glass. Johnson decided to stay low and break to the front of the
office next to Wollins. Unless the idiot was standing up, the angle of the shot would be wrong for a good
one.
Just as he was about to make the move, he heard laughter. He looked behind him, and a crowd of
brokers and sales assistants were standing in a group, laughing and pointingat him. Get down, you
assholes! he bellowed, waving his arm for them to get down. They laughed harder. He said to himself,
Fuck them. Let them get killed. He looked up to reconnoiter one more time, and he saw the muni guys
standing in their doorway and Wollin, gun held down by his right leg, standing in his door.
Johnson got up from his crouch, knees reminding him why combat was a young mans game, and
moved toward Wollin, ready to pounce if the gun came up. He moved up to Wollin slowly, who looked
back at him through wire-rimmed glasses, at once perplexed and contemptuous.
Do you realize how close you came to getting killed, Wollin? What are you doing, waving a gun
around the office and tracking someone down a hallway, you fucking idiot!
Meir Kahane said that every Jew should be armed. If Jews had guns, Kristallnacht and the Holocaust
couldnt have happened. No one is going to put me in an oven! The look on his face was so arrogant. He
was convinced he was rightthat Johnson wanted to take the gun away from him and shove it down his
throat.
Johnson moved closer to Wollin and said, I really dont like having guns pointed at me. For ten years,
people did that, trying to kill me, and the last thing I need is some untrained asshole with a new gun backed
with some stupid self-preservation philosophy pointing one at me.
Whats the big deal? It isnt even loaded.
Johnson could see that the safety was off, and Wollins finger was still inside the trigger guard and
resting on the trigger. Johnson was grateful that the gun required a good, strong pull on the trigger to fire.
More people get killed with unloaded guns than loaded ones every year. Can I see it? Like any untrained
fool, Wollin brought the gun up and pointed it at Johnson barrel first and was about let it swivel around his
index finger. Johnson just about shit himself. As the gun came up and was about level, Johnson reached out
and grabbed it around the cylinder to keep it from firing. Wollin gave it up.
Johnson immediately clicked the safety on and pointed the muzzle up to the ceiling. He noticed that the
crowd wasnt laughing any more, whether they realized the stupidity of Wollins actions or that Johnson
might be going postal. Johnson reached under the barrel and pulled the cylinder release. He then pressed
the extractor, and six live rounds were ejected onto the carpet.
He looked Wollin straight in the eye with a look that wouldve killed most idiots in a similar situation
and said, Now its unloaded, asshole. You may be trying to defend Jews, but you wouldnt last five minutes
in a real gunfight! Jabbing his finger in Wollins chest, he added, Dont even point a gun at me or anyone
ever again unless you intend to shoot, and if youre going to shoot, you need to be ready to kill. You point
it at me again, and you wont live to the next Sabbath, shit for brains!
Johnson glared at the assembled crowd, which scattered like the heap of cockroaches it was, and he
stormed off to the mens room, where he vomited for about ten minutes. He was jumpy for the rest of the
day. When anyone surprised him, he jumped, his muscles going taut, heart rate increasing, and sweat
beading up on his forehead. That night, Dianne woke up to find him gone from bed, and after searching the
house, she found him in one of the closets huddled behind a pile of suitcases hed arranged like a bunker
with a firing slit.
For the next few days, the story of Johnson disarming the idiot bounded around the office, each retelling
reflecting the speakers viewpoint. Those who supported Wollin and his crackbrained philosophy said that
Johnson had jumped Wollin, who had tried to explain that hed just bought the gun for defense and that as
a Jew, he had every reason to be afraid, that it was an inbred memory in Jews. Johnson was afraid of an
armed Jew (left unsaid was the insinuation that he was anti-Semitic) and had jumped him and beat the shit
out of this poor sap with a pistol, a two-by-four, and the butt end of a golf club.
Johnsons supporters told the story differently, but doing Johnson no honor. In their tale, Wollin not
only had the pistol but a rifle, two hand grenades, three claymore mines, and a machete. Johnson had bravely
disarmed an obvious risk and saved everyone. Johnson was a Protestant hero defending others against some
insane Jew.
Johnson heard so many variants of the story that he stopped listening. But he never stopped noticing
that everyone was uncomfortable when he was around. About a week after the disarming, Wollin came to
Johnsons office. Johnson was busy working on a proposal to a client. Phil, have you got a minute? Wollin
began tentatively.
Not really, Gary, I have a proposal to a potential new client I have to have ready tomorrow, and unless
this is really important, can we talk another time? He looked up at Wollin, his face betraying impatience
and frustration at the interruption.
I just want to know one thing, asked Wollin, not getting enough negative response from Johnson. He
carried on, Did you know the gun was loaded before you started ducking for cover, or didnt you care?
Johnson threw his pen down. He was still not past the PTSD from the incident, and he knew he was on
dangerous ground and barely in control of his emotions. I figured that any asshole who would bring a gun
to the office had to be stupid enough not to know if it was loaded or unloaded. I also figured out that youre
such a dickhead that you probably didnt know how to operate the weapon, which made you a danger to
yourself and everyone else. Johnson was getting worked up. My training and my stress disorder kicked
in and made me go into combat mode. If Id been armed, I probably wouldve shot you!
Wollin looked shocked, as he should have, and was blinking rapidly behind his glasses. His normally
superior attitude wasnt in evidence.
Gary, remember what I told you. Dont point a gun at me again, or Ill use it to give you a .357-caliber
vasectomy!
Donnelly, at the next desk, had been sipping a cup of coffee when Phil delivered this last line with all
the considerable menace he could muster. He spat coffee all over his desk and then coughed madly as he
tried to simultaneously laugh, spit, and breathe.
Wollin stood for a moment in his humiliation and then turned and left. Johnson picked up his pen and
went back to work, feeling immensely better that hed finally gotten the last word.
 Chapter 38
The Beginning of the End (or the End of the Beginning of the End)
The year 1986 started to move to its inevitable conclusion. The fall in San Francisco brings a change to the
weather and some of the best days of the summer. The omnipresent fog that hangs off the coast is often
completely gone, leaving views out to the Farallon Islands. Normally, in San Francisco, the comfort level
ends with the sunset, but in the fall, the nights stay warm and inviting, and the streets are thronged with
tourists and the assorted San Francisco weirdos.
It had been a deeply unhappy year for Johnson. He felt like he was out of phase with everything. His
level of gross commissions, the one measure of his worth as a human in the system, was stagnant, the loss-
carry-forward sales in Alaska were done; his insurance company client had sold out to Transamerica, and
so he lost that revenue. The only potential bright spot was that he seemed to be getting some momentum
with issuing municipal bonds for the tribes.
Johnsons friend Geoffrey Standing Bear had guided them to the winners circle at Navajo, and they
were in line to underwrite a $300 million deal. It hadnt been easy. Twice, Johnson had saved the day. It
had also cost him a couple of hangovers, as the reservation was dry, and Geoffrey would ask Johnson to
stop at the supermarket off the reservation and buy one or two bottles of booze carefully disguised in a
larger bag to hide it from the tribal police who patrolled the parking lot. Johnson didnt know what authority
the tribal police would have over a non-Indian, but he wasnt about to chance an arrest.
He and Geoffrey would sit in his room at the Navajo Inn, drink, and talk strategy. One of the
conversations they had over and over was about the fees to the various parties. As the finder, Johnson was
entitled to a portion of Bears fees, and because it was a big deal the fee would be large. And though Johnson
might look stupid, he wasnt, and hed negotiated his share before theyd really even started competing for
the deal. When the deal went through, hed get $300,000. Where Johnson was stupid was in running his
mouth. Hed told Eric Mecham, a mutual friend of his and Geoffreys, what the payout would be, and
Mecham told Geoffrey.
Eric says that if we do this deal, you get three hundred K.
Yeah, thats the finders fee.
You know I make about eighty-five K a year, and I cant go up. I maintain a house for the wife and
kids in Oklahoma and one here and fly back and forth. Ive got kids getting ready for college. I dont know
whats going on. With this, he got up and started to walk around the room.
Johnson had been around Geoffrey and Indians enough to know that they rarely came right out and said
what they wanted. In this, they were, for all their warrior image, a lot like women. Johnson knew what was
coming next, and he wasnt going to volunteer to give up any of the fee. But that was what he was being
asked to do. This was going to be the stepping stone to something else Johnson was planning.
I bring you in on the deal, and I grease the skids with Andrew Benaly, Geoffrey went on. Andrew
was the project manager. I introduce you to the chief justice of the Tribal Supreme Court, whos a big
wheel on the council, and I make eighty-five K a year. I just dont know, I just dont know. The last lines
were delivered with the drunkards slur and a shaking of the head. Geoffrey was clearly drunk;drunker
than Johnson, who had shepherded his intake all night.
OK, so what are you going to do, Geoffrey? Get another job? Youve been legal counsel to three of
the longest-serving tribal chairmenWendell Chino at White Mountain, Claude Cox at Creek, and now
McDonald. With that resume, you should be able to write your own ticket. Johnson, knowing what he did
about drunks, was going to goad Geoffrey into some other area than the fee on the bond deal. Youre also
the vice chairman of Osage. Johnson liked Geoffrey, and theyd been through a lot together, but Johnson
wasnt in a charitable mood and wasnt giving up his fee. It wouldve been illegal, in any case.
Geoffrey stood up and walked to the door, shaking his head. I just dont know, I just dont know.
The next morning, they met at tribal headquarters, and Geoffrey had a hangover bigger than the
reservation. He begged some of the aspirin Johnson carried. He didnt mention the fee, and Johnson never
heard the issue raised again.
 Johnson spent the afternoon with Andrew Benaly, going over the project list with Dave Ingals, a white
guy who worked for the Navajo attorney general and was the head of the housing department. They went
over various aspects of the deal, and Johnson tried to get from each some of the things that might concern
them so he could head off the questions at the pass.
He drove the forty-five miles to Gallup to meet the rest of the team at the Holiday Inn. He was aware
from Geoffrey and Andrew that the tribe had asked Goldman Sachs to make a presentation. Goldman had
never done an Indian bond deal of any sort; their only exposure Johnson was aware of was representing a
commercial interest trying to sell something to a tribe.
The Navajo, being the biggest tribe, almost had delusions of grandeur. Whenever they did anything,
they would go for the biggest name they could find. In most cases, the organization, be it McKinsey or
Deloitte or Arthur Andersen, knew little about tribes and charged the highest fees. Hiring them seemed to
feed some narcissistic or inferiority complex the tribe seemed to have.
The problem with all the big names was that Indian business was relatively small, and the fees to be
generated were small and intermittent. When the tribe hired one of the big names, there was a long learning
curve before the organization could be effective. Bear had already moved a long way down the curve, and
Johnson was even further along the way.
Johnson had built up a Rolodex of Indian advisors who could get things done for reasonable fees and
in short order. He used them ruthlessly to move deals along. Since they took less time and therefore charged
lower fees, the firms profit margin on the deals was higher than it might otherwise have been. This was a
fact that Johnson reminded the firm of constantly as part of his negotiations on fees.
When he arrived at the Holiday Inn, he noticed the Goldman gang hanging around getting checked in.
Hed bribed the desk clerk, Darlene, the night before to give the Goldman guys the worst rooms and the
Bear people the best. Darlene was a Navajo, and her mother was one of the people whose hogan would get
electricity when the deal was done. Her older brother had been one of the Indian extras in the movie
Cheyenne Autumn, which had been filmed on the reservation.
Johnson had booked the only conference room in the hotel for the night so the team could have dinner
and talk strategy. That left the Goldman guys with the restaurant or meeting in one of their rooms, far less
productive environments. The Bear team assembled for dinner and made small talk during the meal. Deke
and Judy were there, which was Bears way of showing diversity. In the municipal business, it was
important to hit all the items on the checklist of proper things, and that included gender and racial diversity.
The Goldman team had gone all out in the diversity area. They brought two women, a Hispanic male,
and an African American guy. Johnson was pleased with the Goldman team, as it would be obvious to the
council that Goldman was pandering to the minority status of the tribe and the supposedly strong desire to
do business with other minorities. He could more easily explain Deke and Judy, since theyd actually
worked on Indian deals. He knew that Geoffrey was going to ask Goldman how many tribal deals theyd
done, and that would give away the game.
Hed told his team hed review the clothing being worn for the presentation. It was important to look
successful but not overwhelming; these were, after all, clients on the lower end of the socioeconomic scale.
Second, he didnt want any of his team going Indian or Western in some foolish attempt to connect.
Mostly, he was concerned about the women. Deke had beautiful, long, shapely legs and a body that would
stop a clock; she tended to wear sheer silk blouses and short skirts. Judy wasnt so attractive, but with the
fashion for shorter skirts, he was concerned. The men on the council would certainly enjoy the sight of a
thigh or a nice set of knockers, and in some cases, that kind of sexual innuendo wouldve been appropriate.
This wasnt one of them.
Everyone on the team brought him the clothes they were planning on wearing to the dinner, and for the
most part it, everything was OK. He did tell one guy that his tie with Indian symbols wasnt appropriate.
His real problem was the babes. Theyd come from New York with clothes in the latest fashion and which
were very expensive. Women tend to know the price of other womens clothes, regardless of how far away
they might be from a fashion center. The womens skirts were too short. There was a huge battle when he
told then to find longer skirts. They said they didnt have any, and he told them to rip out the hems. He
convinced Dave Heppner, the Bear Stearns partner in charge, of the problem.
 Dave, there are going to be members of the council who represent the clan mothers who are vital to
the selection. While as men, they would welcome looking up a womans skirt, it will be death when the
report gets back to the clan mother of what Judy and Deke were wearing. Im not trying to be chauvinistic
here. I know these people and how they work. They respect women, but theyll vote against a woman who
they think is using her sexuality to win votes. He won the battle, but not without some pretty harsh words
and comments from Deke and Judy.
He checked a bunch of other details and then told them the one factor that he was sure Goldman wasnt
aware of. At two oclock in the morning, we switch to daylight savings time and jump the clock forward.
The tribe does not observe the clock changes. So the meeting is at nine oclock, which will be ten for
everyone else but not the tribe. We need to be on tribal time, so we leave here no later than eight fifteen.
Do the Goldman guys know about this? Mark Holmsted asked.
I have no idea what they know or dont know, but it isnt my responsibility to inform them. Nor is it
anyone elses, Johnson shot back, knowing full well that Goldman, with no Native experience, would
assume that the usual rules applied.
The next day, everything went perfectly. Johnson had had their cars parked at the north end of the lot,
as far from the rooms assigned to the Goldman folks as possible. The Bear team was on time, and they left
only a minute late. The Goldman team arrived at 9:30 a.m., Navajo time. Navajo council meetings are
closed once started; no one not already in the chamber is allowed in. So Goldman had to cool their heels in
the lobby. The cooling should have frozen them, because it was two hours before there was a break and
they could plead their case.
During the presentation by Andrew Benaly on the need for the bonds and what the money would be
used for, Johnson had an epiphany. Andrew gave his address in Din (as the Navajo language is known).
The team slipped into the dream world that comes from not understanding whats being said. Johnson
noticed that every time Andrew mentioned the three hundred million or another large number, hed switch
to either Spanish or English. This happened a number of times, and it seemed to apply to any number that
involved millions. Then it struck him.
The Navajo language is of Athabascan origin, and derivations of the language are spoken in Arizona,
Alaska, and Canada. Some version of it has been spoken on the North American continent for twenty-five
thousand years, yet in all that time, the language had never developed a way to talk about large amounts of
money. Johnsons insight was that if there was no language concept, it was probably because there was no
cultural concept requiring such a development. He realized in an instant that his real job with the Indians
wasnt financial; it was cross-cultural communications. He was able to take the concepts of Wall Street
with its basis points, yield curves, and time values of money and convert it to a language that the tribes
could understand. By doing so, he was reducing the cultural disadvantage of the tribes. He was immensely
proud of himself for this insight.
When Andrew finished his presentation, it was the Bear Stearns teams time in the spotlight. Johnson
really had no part in the work of the team; he was just there to head off problems. He had to admit that
Heppner did a good job. He oozed sincerity and honesty. Judy and Deke explained the marketing and
pricing methods, and not a man in the place could take his eyes off Deke with her black mane of hair
swinging around her perfect face. Most of them had no idea what she said, but none of them would forget
her, and that would probably be a good thing, he thought.
It was about halfway through the presentation when one of those things happened that made Johnson
so important. They were using an overhead projector to show slides depicting price scales and the
relationship of the bonds to the yield curve when the light bulb in the projector blew with an audible pop.
The secretary of the council called someone to get a new bulb, but before she could finish the call, Johnson
had reached inside his magic briefcase and pulled out a new bulb. He opened the projector and took the old
bulb out, and inserted the new one. Off they went.
The presentation ended with some questions, one of which he was called on to answer, and then they
were done and dismissed with the thanks of the council and a round of applause. The council took a pee
break, and Johnson did two really mean things. First, he took back his overhead projector bulb, which would
leave Goldman in the dark, and second, he handed two sheets of paper to Geoffrey.
 The trip back to Gallup was spent rehashing and discussing the presentation, and just before he dropped
the team off at the Holiday Inn, Heppner asked him what hed given Geoffrey.
I gave him the final blow to Goldmans bid.
Pretty confident, arent you? asked Heppner.
Well, maybe, but you may have noticed that Goldman brought along an African American? He waited
for Heppner to acknowledge the fact and then went on, Well, I heard they were bringing him, and I did
some research and got his resume from Wharton. His great, great, great grandfather was a soldier in the
Ninth US Cavalry.
So what?
The Ninth and Tenth Cavalry were African American units known by the Indians as Buffalo Soldiers.
It was those regiments that Kit Carson led to rather brutally put down the Navajo. I thought the council
should know that. These are the kinds of things that sway tribes.
Heppner laughed. Only you would know something like that. You must be the result of a really fucked-
up childhood!
Given the preparation theyd done, it was an anticlimax when two weeks later, the tribe notified them
that Bear had won the bid. In his letter to the firm, Chairman McDonald praised Johnson for his
understanding of the tribes point of view and of Navajo history, which Johnson read as an oblique reference
to the Buffalo Soldier information. He was on top of the world. This was going to fund him on something
hed been thinking about for a year or more.
It was a crowning moment, but of course, Johnson was unhappy. He didnt know if the unhappiness
was the result of the business, his personal life, or his feelings of inadequacy. He did know that inability to
focus on long-term tasks was a symptom of PTSD, so as his unhappiness increased, he slowed down his
decision process. He was unhappy on a number of fronts. He was making a fair amount of money but as
usual, not as much as others, and he seemed to have to work harder to get it. He wasnt being challenged
by the work; it was just calling and trying to convince people to buy something, which by now he was too
used to. There was no proactivity, and there was no original information. He was just recycling the same
crap that was already well known, and therefore his clients were guaranteed only the performance that came
with stale information.
To say he was unhappy at home wouldve been a gross understatement. Dianne was turning into a
constantly needy, ferociously religious, dogmatic, irrational spendthrift and embarrassment. He discovered
shed been making monthly $1,000 donations to some Texas TV evangelist. She was using the credit cards
for cash withdrawals to give money to her sisters. She was filling the kids brains with accusations of the
same lack of ability to succeed in their faith that shed gotten from her mother. Everything they said and
did was pronounced a venal or mortal sin, and weekly they were dragged off to confession to give up their
imaginary sinas if a seven- and eleven-year-old had sins.
Diannes commitment to various health foods and supplements continued, and of course the ones she
wanted were the most expensive. For all the money she spent on preventative stuff, she seemed to be sick
all the time. She started to develop some odd rationalizations. She went on a diet and asked for his help to
keep her on it. Hed come home, and shed brag shed eaten a quart of premium ice cream, but even with
that she hadnt violated her diet, because she hadnt eaten anything else all day. Besides, since the ice cream
had milk and bits of cookies, it really was part of her diet. Her mother had used the same rationalization as
shed ballooned toward four hundred pounds.
She was whacking him with the importance of sex in the marriage and how he needed to step up and
do more. He was just exhausted, and given the damage hed suffered, he just couldnt do more. She said
she just needed closeness, but the closeness always turned into sex, and his noncompletion led to anger and
accusations of him having an affair. In her mind, it was the only reason he wasnt able to perform. He
guessed that twenty-three surgeries and metal fragments from an antiaircraft round in his dick had nothing
to do with it.
His son was continuing in the sociopathy that would define him. He was sullen, angry, defiant, and
destructive to his toys and possessions and other peoples property. He barely recognized his sisters
existence and would push her out of the way and demand attention when his parents were paying it to her.
 He was vulpine in his cleverness in dividing Dianne and Phil when it came to discipline. Hed get the
two of them arguing about the correct course, and then hed walk scot free. The victim in his sons
sociopathy was his daughter, and Johnson was amazed how she could maintain a cheerful attitude through
all the bullshit. Dianne felt a need to protect their son from any attempt to link his behaviors to
consequences. He received endless praise for anything he did short of lighting the house on fire. The
daughter, on the other hand, received no praise from Dianne; in fact, she was often denigrated in front of
the son. Whenever he pointed out the difference, Dianne reacted with animal fury.
You think shes so perfect, but shes not. You arent here all the time, Phil, and you dont see the
sneaky ways she does things. I see it, and I was raised in a big family, so I know about these things.
Your family taught you about making things up?
You never let me finish my thoughts. I dont know how a guy as smart as you can be so dumb. It just
goes to show you, college degrees and honors classes dont mean anything. We proved that in sixth grade
when we werent allowed in the honors class, but we showed them that we were just as smart!
He stood there, shaking his head. Whats the matter with you? I was just trying to apply some logic,
any kind of logic to that last statement to see how its germane to what we were talking about.
See, there you go again, with the male-chauvinistic talk with the big words. You dont listen. Your
hearing is so damaged, you miss about half of what Im saying.
So how does this apply to our daughter vis--vis our son? He threw in the vis--vis just out of
meanness.
It just goes to show you that she isnt as perfect as you think and that you never give our son a chance.
Youre always on him about rules and laws and regulations. You arent in the army anymore, and what you
father exposed you to is not what of is needed here. I know what of is needed.
So I can expect the next time he and one of his friends throw cherry bombs at horses on the street,
making them charge away and throwing the rider, and almost gets us sued, hell pay the consequences?
Hell pay the consequences.
Well, he has a pretty good record of bad behavior so far, and nothing has ever happened. Weve been
lucky. But he keeps doing these things. So when will he be called to account, and how?
I dont know, Phil, but I know he will. You dont have faith. You have to give it up to God.
This type of stuff went on almost every night, and when it was over, he felt like someone had taken his
brain out of his skull, beat on it with a bat, run over it with a car, and then stuffed it back in through his
earholes. He actually got headaches trying to follow Dianne. Her constant references to religion brought to
mind a saying attributed to Saint Thomas Aquinas: To one who has faith, no explanation is necessary. To
one without faith, no explanation is possible. Dianne was a bastardization of this point. To her, a person
with faith had no reason to live in the real world, because faith would make everything work out.
Dont you think God might leave some of this to us? After all, God has no hands, feet, legs, or arms.
He cant intervene. Isnt it our lot in life to lead lives according to Gods word and to direct those over
whom we have control down the same path? This type of comment would normally give pause to a
thinking person, but not to Dianne.
So now youre making yourself out to be God, and youre here to do his will? God in heaven help
you, Phil. Youre a blasphemer, and you should go to confession and ask for forgiveness for your mortal
sin.
Well, I dont think I was blasphemous, but if I was, it will just be one more brick of sin in the great
wall of sin that surrounds me, and one visit to a church isnt going to help.
As he and Dianne lost the ability to communicate, the hurts and bruises of relationship went untreated,
and they retreated from each other. More rightly put, Phil retreated from Dianne. On the evenings and
weekends, when his intellect was fragile from work and being trampled by Dianne, hed go down into his
den. It was small room over the garage and two steps down from the main floor. It had been an afterthought;
the ceilings were low and the room not big enough to hold much beside a couch and the stereo. It had a
sliding door that led onto the smaller of the two decks. Hed put on a record or start a tape and lie on the
couch and read. Usually he could feel the tension drain from him, and often, he was lost to the ultimate
escape: sleep.
 Even this inner sanctum wasnt sacred, however. Dianne, on some pretext, would come looking for him
and invade the area, wanting Phil to talk to her or decide things. Hed make quick decisions, trying to get
her to leave, but she wanted to parse every decision endlessly. The kids knew enough not to bother him,
but he couldnt train Dianne. He went another step away from her. When he listened to the music via the
speakers, he had the volume at a level that was comfortable for him, but for his damaged hearing, it was
too loud for Diannes supposedly super-sensitive hearing. Shed yell at him to turn it down, and he retreated
to headphones. Well, that was like a red cape to a bull. Diannes objections to the volume were just a control
mechanism. Johnson was eager to please and avoid a fight, so he complied; this then left her with a modicum
of control. Regardless of the volume, she complained it was too loud. Even when he used the headphones,
she claimed she could still hear the music.
Without the ability to retreat and recharge, the tension built, and eventually hed have one of his stress
vomits. He would lash out, seemingly motivated by an insignificant event. He gradually lost the patience
needed to complete projects at home, so more and more often, things were left half done and hung around
as silent witness to his distress.
With that home life, some mens solution wouldve been at least one of the three Ds: divorce, dames,
and drink. For others, it might have been violence. None of these worked for him. He owed a duty to Dianne
and the kids, and duty was all. If one dame was bad, then having more than one would be logarithmically
worse. Drink? He knew the falsehood of drink. Under stress, he tended to drink less. There was nothing he
hated worse than a man who beat his wife and children. Such men were the lowest scum on earth. For him,
unless you could kill some son of a bitch who richly deserved killing, violence was unsatisfying. So he took
it in and suppressed his growing frustration under the rubric of duty.
A person unhappy in one area of life is likely unhappy in others. While his unhappiness at home was
building, he began to think about leaving the investment business. He realized he was never going to be a
top salesman. Hed generated a lot of income from the tribes, but the firm didnt recognize it as commission
and so denied him the step to partnership. He watched idiots, fools, and downright crooks step up, but he
was mired in the mud of his vice-presidencywhich in the brokerage industry was like saying you existed.
The curse of good memory is that everything said and done in your past is always still there. There is
no forgetting. Johnsons memory was awesome, but all the bad things in it returned to haunt him at
unpleasant times. Every foolish thing hed ever said, every time hed made a fool of himself, every mistake
or perceived mistake were all still just below the surface of his active mind. His retention was so good that
the hard edges of bad things werent worn down by time or other memories clamoring for currency.
The memory of the pain of Perry Hall and Morgan Stanley was still fresh, as was the frustration with
how stupid Wollin had been. The injustice of Gary and the Jewish guys belief that he was anti-Semitic still
burned. He was carrying more than his full load of aggravation and depressing memories, and it showed in
his unwillingness to suffer fools lightly or at all.
While he had been at Morgan Stanley, hed met Dick Taylor, a client of another broker. Dick was an
independent money manager who had formerly worked for T. Rowe Price mutual funds. He and Dick
meshed, and Dick called him every so often just to chat. Gradually, Johnson started to unburden his
frustrations with the business.
There was only one other person in the office he could talk to: Dave Mead. Mead was kind of goofy
and eccentric. Hed been married a number of times, and all had ended badly. He used to say that he wasnt
going to get married again; he was just going to be really good friends with the woman and buy her a house.
Mead had wide connections and knew both Taylor and his partner. Mead was really bright, and Johnson
always assumed that being bright gave you the rightor at least the coverto be eccentric. He was bright
enough and did enough commission that Gary and the other vultures left him alone and didnt comment on
his strange work hours. Dave did a lot of business with Middle Eastern and European investors requiring
him to be up most of the night, so he came in when he wanted.
Johnson shared with Taylor and Mead his disenchantment with the business in the grousing way men
complain. They would sit together in Daves office with the door closed and trash the idiots in the office.
Mead was more subtle than Taylor. Mead didnt make suggestions or say, This is what you ought to do.
He listened to Phils ranting and then asked questions that, like all good questions, didnt seem to be exactly
relevant to Johnsons complaint. They were brilliant questions, because Mead was working at a so much
higher level of perspective than Johnson and was seeing miles ahead, while Johnson was seeing maybe a
foot in front of himself. Perspective blindness is a common fate of brokers.
Johnson wasnt good at hiding his feelings, and everyone who knew him knew he was unhappy. But
his unhappiness was bipolar. A big ticket or a compliment from a client was elevating, but a loss of business
or a rejection plunged him into depression. Mead, Taylor, and Donnelly knew that the tectonic plates of
Johnsons personality were moving, building pressure that would manifest itself as an emotional volcano.
Donnelly just wanted to see it happen for his own amusement, but Mead and Taylor understood that if the
pressure wasnt relieved, Johnson would self-destruct.
Taylors firm was located in the East Bay, closer to Johnsons damaged house, so there were occasions
when they would meet there. No one in the investment business does anything without a motiveusually
a self-serving one. Taylors motive for spending so much time with Johnson was that he wanted to recruit
him to work for his investment management firm. At first, Johnson was intrigued; he was like the majority
of people who believe theyre above-average drivers. Almost all stockbrokers think theyre better investors
than they are. The fact is, most are useless, and thats one of the reasons that brokerage-house statements
rarely showed the original cost or unrealized capital gains and losses associated with a holding, and certainly
never the commissions.
Johnsons erroneous belief in his investment skills led him to the incorrect conclusion that if he went
to work with Taylor, hed get a salary and would be making investment decisions for investors, but not just
to get commissions. The firm would collect a fee, and Johnson wouldnt have the ups and downs of monthly
checks that so irritated him.
What Taylor really wanted was a marketer. Marketing at an investment management firm is a long,
tiresome, expensive process. It requires endless travel, endless entertainment, glad-handing, and being a
hale fellow quick with jokes. It was usually the lowest-compensated job at a firm, and when things went
bad, it was the marketer that was fired first. Johnson was already missing out on his kids childhood with
his current travel schedule. With his introverted personality, he didnt have the stamina for the parties and
entertainment. Marketers often have to deal with consultants to pools of money that are closed to new ideas
and act like the kings of the world. Johnson had no patience with people who acted out of pettiness and
political gamesmanship. He knew that he wasnt a marketer. Hell, he couldnt market himself. It had taken
thirteen years for him to get comfortable with selling at all, and that comfort was provisional.
The old saying that its an ill wind that blows no good was appropriate here. While Johnson immediately
knew that marketing wasnt his bag, he did for the first time in the last couple of years focus on George
Riegers earlier advice that he set up as an investment manager. Mead reinforced the conflict between what
Johnson was doing and his perception of his role. Mead made him focus on the amount of commission
generated as percentage of the total cost of the trade. What Mead was driving at was the conflict in the
brokers world of wanting to do the right thing for the client and the need to get paid. The iron rule was that
if money didnt move, you didnt get paid.
The movement of money creates what the investment business calls friction. Friction is cost, and costs
reduce investment return. When Johnson had been at Morgan, he could look down to a place across the
alley of Stevenson Street called Charles Schwab. Schwab had set up as a discount broker, and the rest of
the Wall Street gang recognized immediately the threat he posed if he was successful.
While it may be easier to destroy a man than an idea, if the man is tough and the idea powerful, its not
easy to destroy either, and Schwab and his idea were both. The success of Schwab made life harder for
brokers at the full-service firms because customers now had a choicewhich they took. Bear Stearns took
its trading patrimony and corrupted it to compensate. Most Bear offices had their calling rooms, which were
sometimes also called boiler rooms. New brokers were packed in there like sardines; they were provided
leads and people to make the initial calls. They were expected to pound away at prospects each day. The
firm started to push less and less valid companies on these guys, and they just sucked them up and jammed
on them.
When a broker in the calling rooms gross commission slowed down, he was called on the carpet.
Butthead, your gross commissions are down. You want to get fired? Youre way behind the other guys. In
fact, youre last on the roster! This was usually a lie. Everyone was last on the roster, but no one ever
compared notes, because they were embarrassed to be last.
I have all my clients fully invested.
You have them on margin?
Some of them.
Listen, asshole, when you open an account, its always a margin account. You spend all the money
you can get out of the client. When thats gone, you put him on margin. When the margin is gone, you sell
something! Who the fuck is in charge of your gross? You are. And youre letting clients determine how
much you earn? Get the fuck out of here. I have to think if Im going to fire you.
Johnson was finding this type of song and dance increasingly distasteful, even though he wasnt directly
involved. He was thinking outside himself, and he was seeing the changes in the industry. He didnt like
what he was seeing. There were times when Johnson had the gift of prophetic foresight. He didnt get all
the details exactly right in time or nature, but he did get the broad strokes. This was one of those times.
Johnson knew that he needed to make a change. His clients expected Johnson to be their advocate and
do well for them, but he was actually their adversary because he was expected to do well for himself. The
Forbes list of the richest people came out, and he noticed that most of the members were older and had been
doing what they were doing for a long time. He knew intrinsically that you got wealthy slowly, and he
noted to everyone who would listen that none of the members of the list owed their wealth to trading stocks
or having some broker trade stocks for them. He realized that the normal schlub stockbroker was the enemy
of wealth.
Getting rich slowly was antithetical to the stockbrokers primary motive of making a lot of money, but
he had noticed years ago that brokers didnt get rich. With big incomes but low net worth, they did poorly
in their own investment accounts. The rule was, Do as I say, not as I do. He knew that investment
managers, though, were paid fees based on account value, and that appealed to him because it would smooth
out the cycles of his earnings and allow him to invest clients money in what he thought was best for them.
He decided hed figure out how to charge fees instead of commissions.
He worked out what several of his clients had generated in commissions and set that as the fee hed
charge. Why take a reduction in income? He assumed money was money. If it came from fees or
commissions, Bear wouldnt care. It would take its lions share, and all would be right.
His thoughts were badly jumbled. He approached Fred Gans about the fee idea, and Fred got that
vacuous look he always got when presented with anything new. Then, like she did eight times a day, Shelby
called, and Fred waved Johnson over to Gary. Gary looked at him like he was a Martian and waved him to
Rosemarie Barrett. Rosemarie said shed check with New York and get back to him.
Apparently, a lot of checking had been needed, because he hadnt heard in three weeks. The fee idea
had grown on him, and he was focused on it and on getting an answer. He ignored what should have been
an obvious dodge to avoid giving him one. The management all expected him to have the usual memory of
a stockbroker, which was limited to his last trade.
He prodded Rosemarie several times, and she eventually said it wasnt allowed by the National
Association of Security Dealers (NASD). For a normal person, that wouldve been it. But not for Johnson.
He called NASD and worked through the endless voice messages and twists and turns, only to find out that
NASD only regulated over-the-counter stocks. Back to Rosemarie. This time, the story was that the New
York Stock Exchange forbade it in their constitution and rules. Johnson happened to have a copy of those
documents, and he read them in great detail. He found no such prohibition, a fact he confirmed with the
Exchange. Back to Rosemarie. Some more checking, and now it was the SEC that wouldnt allow it. On
the phone to the SEC. No such prohibition existed, except that whatever was done had to be fair and
disclosed.
He faced Rosemarie one day, and the next, he was in Garys office being chewed out as a troublemaker.
So he wasnt allowed to charge fees, but he never understood why. It was obvious that hed hit on some
sore point and suspected it was allowed but that no one was going to go out on a limb to grant him
permission.
 November came, and with it, for everyone else, the holiday spirit was the order of the day. Rounds of
parties and fun, short work weeks, and the outlook for travel and other pursuits. Johnson went the other
way. He got more and more tense. The Ghost was due soon; he never knew when. Dianne was militating
to spend Christmas with her gang of yahoos in Southern California. To Johnson, there was nothing about
LA that was Christmas. To him, it was Newark with palm trees.
The Christmas party that year was at the Hyatt on Union Square, and it was supposed to have a Mexican
flavor. He guessed that the Hispanic janitor and the Mexican window washers did a lot of business, because
the only other connection Bear had with Mexico was the manic-depressive Memo Margolis. Johnson
decided on an act of rebellion.
To reach the ballroom of the Hyatt, everyone went down a long escalator. At the bottom were Gary and
Fred Gans to greet everyone. Johnson decided that if they were going to honor one ethnic group, hed
represent his own. During his and Diannes trip to England the year before, hed discovered his Scots roots
and had bought a kilt. His kilt was bright; with greens, yellows, and red, it was an eye-catcher. As he and
Dianne rode down the escalator, every head swiveled to see him. He filled his chest with air in pride. Take
that, Gary.
The party was a multilevel disaster. One of the sales assistants named Allison Carpenter apparently had
slept with several guys in the office, and each of them showed up with a T-shirt bearing a logo for Team
Carpenter. Johnson actually had a moment of concern for her feelings before being distracted by the rest of
the mess.
Joni Marstad, the silicone queen of the office, showed up in her sixteen-year-old daughters strapless
prom dress and had to be constantly reminded by various women and her date that her nipples were
showing. Patty Lamb from the bond department, who was built like a brick shithouse, showed up in a dress
that displayed her ample bosom in a way that made Johnson compare it to a mans butt in a jock strap.
Dianne was sucking down drinks like shed just come across the Mohave Desert on foot, and soon, the
results manifested.
Most of the women in the office liked Johnson because he didnt hit on them and liked the idea of the
kilt, so he was asked to dance many times. He was a horrible dancer, but he did his best. Hed danced with
Dianne a couple of times. Dianne left to go to the bathroom, and when she returned, he was dancing like a
typical white guy with Pat Hagen. It was a fast dance, so there was no touching. The booze had worked up
Diannes jealousy, though, and she walked up to Johnson and hauled off and slapped him on the side of the
head before punching him. The slap surprised him, but the punch was inconsequential. Dianne, having
made one level of ass of herself, stormed out of the room.
He turned to Pat to excuse himself when Garys other assistant, Rachel, who was encased in ten pounds
of gold chain mail and stiletto heels, landed one of the heels on Johnsons ankle, ripping it open. He fell to
the floor. He got up and limped to the vestibule and sat on a couch. His ankle hurt like shit and was bleeding
a lot. One of the other brokers asked him if his wife was a redhead wearing a beaded, black dress. Having
accurately described Dianne, he told Johnson that she was upstairs in the main lobby, screaming, crying,
and carrying on about how her marriage was over and she had nothing to live for.
He limped upstairs, his foot squishing in his blood-soaked shoe, and sat down with her, waving away
the hotel staff. He put his arm around her, and her head fell to his shoulder. Oh, great. My tuxedo coat is
going to have makeup and mascara on it, he thought. She cried and apologized, and when shed calmed
down, he suggested they take a cab to their hotel. She insisted that they walk, as she needed the fresh air.
The hotel was eleven blocks up Post Street, and Johnson soldiered up it, his ankle killing him with every
step. He knew it was important he not complain or call attention to himself. Dianne wanted it all to herself,
and it was going to be dangerous if she didnt get it.
In their room, Johnson went to the bathroom and took off the kilt and sporran and wrapped his ankle in
a face towel. He limped out to the bed. Dianne had all the lights out, and he realized she was naked. Oh,
God. She cant want sex, can she? he thought.
Come on, honey, get in bed. Youll feel better after you sleep.
She didnt want to sleep. What followed was a Dianne stream-of-consciousness bravura performance.
He had no idea how long it went on, because he fell asleep several times. The droning was a wonderful
sleep aid. She was so busy rationalizing her abhorrent behavior that she never noticed or asked any
questions. He woke at one point to find the window open and Dianne naked, straddling the windowsill with
a seven-floor fall in front of her. She was talking about ending it because no one understood her and she
was so sensitive that the world hurt her; she hadnt meant to get drunk, but she was on medication, and it
made the drinks take a stronger effectnot that the seven scotch and waters had had anything to do with
it. She ended her soliloquy with the statement that she should end it all; no one would care.
There were times that Johnson was glad Dianne was a Catholic. She wasnt going to commit suicide;
her church forbade it. She wasnt in any danger of slipping off the sill to her death. It was cold, and that
would soon drive her in.
OK, honey, youre wrong that no one would care. I would, and the kids would. You had too much to
drink and you did something foolish. Most of those assholes wont remember what happened. Get in bed.
Youre going to get pneumonia if you dont.
She got back in bed and soon was in a drunken sleep so deep that he had a hard time getting her awake
the next morning in time to make the noon checkout. The hangover must have been monumental, and it
inspired more rationalization. Her actions werent the fault of drinking; no, it was the medicine and a
hundred other causes. She ventured into paranoia by stating that someone had spiked her drinks, because
she knew she could drink without getting drunk and never had hangovers. Which led to stories of her youth
and her drinking.
At the office on Monday, there were some knowing becks and smiles but no real comment. UPS
delivered the Ghosts Christmas greeting: a dozen dead roses with a card. These are dead like Dick and
you should be too. He read the card and had a moment of sympathy for her in her insanity. He decided
that he needed to get out of this place. And so commenced the beginning of the endor the end of his
beginning.
 Chapter 39
A Hope, Letter, and Another Move
For Phil Johnson, vice-president of Bear Stearns, 1987 started with a journey deeper into his wifes
rationalization and creeping insanity. In the days following the disaster at the Christmas party, Dianne dug
deep into her bag of tricks to find ways of excusing the inexcusable. Like most rationalizations, hers had a
smidgen of sense behind them. It was the thought process around the element of sense that was flawed.
First, it was that her medications amplified the effect of alcohol. Their medicine cabinet looked like the
storage room of a drug store, so the chance of one of them reacting negatively with booze was high. He had
long ago given up tracking what medicines she was taking, but there were a lot. She seemed healthy and
was always ready to go skiing, dancing, or on a trip. As long as she was enjoying herself, neither the drugs
nor her complaints were of consequence to her and she would do anything. If, however, she experienced
the least amount of unpleasantness or she had to make an effort to do anything, she would always attribute
the problem to some health complaint. When she acted badly like getting drunk it was always someone or
somethings fault but never hers.
People still smoked in various places, and this set off her allegations of a special allergy to smoke.
When she and her friend Kim were going to some bar or club, the complaints about the smoke surfaced
after she got home, usually drunk, and of course, the hangover was caused by the smoke allergy. When he
suggested she avoid drinking and places with smoke, he got some story about how she could hold her booze.
Shed once drunk a fifth of tequila. The drinking was never the issue. Johnson had used the same excuses
when hed been an active drunk.
As the days passed, Dianne began in earnest to find a way to rationalize her latest imbroglio and her
rationalizations about the Bear Stearns Christmas party shifted from medicines to conspiracy. Maybe the
drinks were stronger than normal. Maybe someone had put something in them. The seven drinks she had
belted down, of course, were never to blame, since shed once drunk a fifth of tequila. Then it shifted to
sickness. Maybe she was getting a cold or the flu, or there might have been some virus in the cooling
system. The fact that the only symptoms were those common to hangovers was dismissed with the
statement, Im very sensitive to that of which is bad for allergies.
Finally her increasing paramnesia turned her to him. He hadnt protected her from the drinks and the
drugs they had put in them. Hed been too busy looking at Joni Marstad and Patty Lambs tits and talking
to his cronies when he should have stayed with her to protect her. It never crossed her mind that hed have
been protecting her from herself and that nothing had justified the slap, the punch, the screaming fit in the
lobby, and the hotel suicide threat.
He just gave up and accepted that he was going to be blamed regardless of his innocence, either because
of physical evidence of his neglect or because he wasnt making love enough so that shed felt
underappreciated and had to act out. He asked her why it was that with all the drugs, health food,
supplements, and her constant lectures on health, she was such a mess. The irony slipped by unnoticed in
the barrage of justifications.
For all his toughness and past trauma, Johnson was still deeply affected by loss of face. He hated being
proven wrong in public or being made fun of. He hated it when in a public meeting where he was being
reasonable and conciliatory, he was treated with disrespect. Even after all the years of cold calling, he still
was stung by rejection. His elephantine memory didnt allow the slights and embarrassments to fade. They
hung in the recesses and corners of his brain until, in a quiet and inappropriate moment, they would surface,
and hed relive them. It was exhausting. The humiliation of Dianne hung around him like the albatross in
Coleridges The Rime of the Ancient Mariner.
Other than in his home life, the year was starting off well. The bull market made everything else seem
minor. The president went into the hospital to have prostate surgery, which in a man his age could be
serious. Normally, a president in the hospital with the big C would cause a down market, but not this time.
In the new bull-market fashion, three days after the surgery, the Dow Jones hit a new record high of
2,002.25. It had first hit 1,000 in the 1960s and taken seventeen years to beat that high. Then in five years,
it had advanced another 1,000 points. The rate of ascent was increasing.
Bull markets ignore everything and take on a life of their own. The longer one goes on, the more things
are measured against the market. Every political decision is judged by its effect on the market; international
situations are either important or not important by the gauge of thirty stocks. It wasnt that the troubles were
gone; it was just that they were trivialized with the question, How do we think this will affect the stock
market? Stockbrokers in the 1980s were neither trained economists or highly educated, even in terms of
market history. Yet suddenly, they all had a complete grasp of the world economic and political situation.
People just lapped it up, mostly because it confirmed their own ideas.
Gary announced that the office would be moving from its south-of-Market location to One Sansome
Street, north of Market. It was a big move in physical terms and in appearance. North of Market was the
high rent district and those who had offices there were elevated in status, you had to be doing something
right to be North of Market. They would be moving to a new building mostly occupied by Citicorp. The
firm was taking two and a half floors. The institutional department would take up half the forty-first floor,
and the other half would be brokers. The full fortieth floor would be for the retail brokers, a small trading
operation for the retail brokers, and the muni bond people. Their half of the thirty-ninth floor would be the
den of the investment bankers and the cashiering operations.
It was becoming obvious to Johnson that there was a tension building in the markets. Stock prices were
rising and falling and rising and falling, driven by a larger volume of shares. Corporate earnings werent
growing as fast as the prices of the stocks, so the price-to-earnings ratio was increasing. Dividends were
almost a bad word now with prices rising every day. Who needed a dividend? If you needed money, you
sold a few shares. It was best to leave the money in the hands of corporate management so it could drive
the stock price higher. It was easier to get a client to sell a stock without a dividend to create a commission-
generating transaction, of course with the superb ethical level of the business the ease of generating a
commission that would never have entered into the equation.
Johnson thought a lot and had been told a number of times to stop thinking and start sellingadvice
he rejected. Johnson was always looking for more information. He wanted to eliminate investment risks by
knowing what could go wrong. When he was talking with company managements and getting the usual
bullshit tossed at him, hed discomfort them by asking, What can go wrong with your plans? He was
constantly amazed that few had a ready answer.
He told Donnelly one day, If a company doesnt know the risks in its own business plan, how will
they know what to watch out for?
Donnelly looked at him, and in a statement typical of a bull market, said, Who gives a fuck? Those
guys are richer than any of us and are going to get a lot richer!
Dave Mead and Jack Garfinkel told him over lunch one day that his problem with Bear Stearns was
that he was an investor trapped in a world of traders. They were right. Brokers who were investors tended
to build large positions in a few well-researched stocks, adding to them when they got cheap. The cognitive
dissonance with the investor modality in a brokerage-house environment was that the investors didnt do a
lot of gross consistently since they had to wait for one of the positions to require selling. Johnson was
looking at data that others in the office were ignoring. His experience with the insurance companies buying
municipal bonds and the experience with selling tribal bonds had forced him to learn about the bond market.
He was particularly interested in the connection between the stock market and the bond market and had
concluded that the bond market called the shots in the stock market, not vice versa. The investment world
was a competition between assets. Money flowed to the best return for the same level of risk. When the
yield on bonds rose, the bonds became more competitive with the stock market, and money flowed out of
stocks. It wasnt a perfect relationship, of course, and the effect of higher yields often took time to manifest
itself in stock prices.
One of the bond guys gave him a lecture about the math behind bonds. The math seemed simple, but
when he asked how to compare the direction of interest rates to the stock market, the bond swine just went
blank. Since the bond guys didnt seem to know anything, he did what he always did: read. He dove into
Sidney Homers Inside the Yield Curve and books on the fundamentals of the fixed-income market. It was
heavy going, but it was liberating and exciting for Johnson.
Every time he thought he had a handle on the knowledge, another question required more reading and
study. Like a lot of moderately educated people, Johnson could be very soft brained in the face of new
information. Hed take in the information and think hed found the answer to everything. The most recent
knowledge became the new filter through which he viewed the world. The problem was that the filter was
always changing. All of Johnsons reading of the philosophers hadnt given him what he needed most: the
ability to think critically. While he was gathering information, he did another thing that characterizes
students. He allowed the pursuit of the new information to freeze his ability to execute on anything he
learned. His clients, at least, seemed impressed by his ability to, as Poe said, ponder over volumes of
forgotten lore. It helped him win an account with an insurance company in Spokane, Washington, and few
other bond-type accounts.
His only source of information on the bond market came from the institutional bond department. After
several run-ins with bond and stock people who were being as territorial as a bunch of bears, he realized he
needed to find another source.
The institutional folks thought retail brokers were pond scum. They were convinced that any large
account a retail broker had that involved a bank, savings and loan, or insurance company was theirs by
right. It made no difference who had found and developed the account; all they had to do was to declare it
theirs, and the wheels of the mill ground the retail broker to dust.
Johnsons bond business was picking up enough that he could convince Gary to get him a Telerate
machine so he could follow bond prices. It wasnt a full-scale machine; it was slaved from one of the
institutional machines and often didnt work. After several calls and repairs by the service people, Gary
started to get nervous about the costs and told Johnson hed have to pay $500 a month for the machine. If
Johnson was going to pay, he was determined it was going to work. One day, the service guy was repairing
yet another breakdown and said to Johnson, Were having so many issues with this machine, and since its
connected to a really long cable, Im going to run a new cable to see if thats the problem. The cable was
fine; it turned out that the transmission of useful data was being interrupted by ill will.
The cable for Johnsons terminal fed into a conduit, but before it entered, it passed close to the corner
of one of the long tables where the bond people worked. The bond people werent happy that a retail broker
had a machine, so whenever they felt like it, they would pick up the desk a bit and set it down on the cable.
The weight of the desk and its sharp edge bent the metal wires in the cable enough to stop the signal. The
techs had just moved the desk, but the bond guys moved it back.
Johnson finally decided to confront one of the bond guys named Jeff Shorenstein. So, when are you
planning to move the desk and cut my Telerate cable?
We dont do that shit. We dont care enough about some retail puke to move furniture.
The fuck you dont, Jeffy. The use of the diminutive was a none-too-subtle insult. The tech told me
he could see creases in the rug where you jerks move the desk. Youre not very good saboteurs. Good ones
cover their tracks better, was Johnsons angry statement.
So what, asshole? What are you going to do about it? Shorenstein was on his feet now, getting in
Johnsons face. You fuckheads in retail, all you do is fuck up the bond accounts you talk to. Youre just
stock jocks, and you should let the ones who know what theyre doing do the bonds.
Johnsons famous short temper and unwillingness to hide his anger came to the fore. And who would
be the ones who know what theyre doing, Jeffy? You think youre some fucking investment wizard?
Youre just an asshole salesman flogging Bear Stearns crap to people.
If I had my way, you retail shits wouldnt even be allowed on this floor, Shorenstein shot back. I do
more gross in a day than you do in a year, dickhead! That was supposed to be the ultimate answer. Johnson,
however, never let an opportunity go by to have the last, most unfortunate word.
I guess there are a lot of dickwads out there that are stupid enough to do business with an asshole like
you. Go fuck yourself, Jeffy. And there better not be any more trouble with my Telerate machine, or youll
spend the rest of your life eating through a straw. It was exchanges like this that endeared Johnson to no
one in the office. The bond people complained to Gary, and Gary yelled at Johnson, and Johnson yelled
back in an obscenity-laced, high-volume argument.
By the end of the first quarter of 1987, Johnson thought he was seeing some trouble developing in the
markets. Bond yields were rising, but the stock market continued to climb. Both rising at the same time was
unusual. The higher interest rates made the dollar stronger against the other currencies, and the companies
that did a lot of overseas business were complaining that the stronger dollar was hurting sales. Oil was
priced in dollars, which was shifting the expense of fuel to other countries who didnt have the luxury of
creating dollars out of whole cloth. The average price-to-earnings ratio was around 19, high by historical
standards, and there seemed to be fewer companies one could make the case for being undervalued. No
market goes straight up or straight down. There are always rallies in falling markets and declines in rising
ones, but there were no corrections in this one. It seemed as if an up cycle of bad news and dangerous events
was starting, any item of which could unsettle the delicate balance of the markets. But no one seemed to
care.
In early May, a Russian-built airliner being flown by a Polish airline (what could possibly go wrong?)
crashed outside Warsaw, killing 183. The crash site was near a cemetery, and the tasteless joke du jour was
that the Polish were digging for the bodies and had so far had recovered 350. At the end of May,
demonstrating that our relationship with Iraq needed some work, two Iraqi antiship missiles hit an American
destroyer operating in the Persian Gulf, killing forty-seven sailors. There was huge outrage, made worse by
the fact that the missiles had been built by the French. The general feeling was infuriation that the fucking
frogs were selling ship-killing missiles to the towelheads, who were firing them at our ships that were
protecting the flow of oil to the fucking frogs.
Reagan went to Germany, and in a diplomatic nicety decorated the graves of some German soldiers of
World War II. Somewhere in the huge cemetery, about fifteen former SS troopers were buried. The press,
loving every minute of the Iran-Contra mess, were eager for their next attack on a man they were trying to
convince everyone was an old, doddering fool, built it up that Reagan had decorated the SS graves. So
intent were they on destroying Reagan, the man, that they almost missed Reagans ringing cry for freedom
when he challenged the Russians to tear down the Berlin Wall.
At the end of June, Saddam Hussein was confirmed to have used mustard gas on his own people. Hed
used it on Iran, but no one had cared. Somehow, though, using it on civilians was terrible. So now, there
were two madmen in the Middle East, both well-equipped militarily and well financed by oil. One had
loosed the terrible sword of chemical weapons that had been sheathed since the Japanese invasion of China
in the 1930s.
Still, the markets didnt care, and the brokers at Bear cared even less. Johnson tried to warn everyone
that things were getting out of whack, but he was laughed at and told that he was always a gloomy Gus and
that hed never liked the markets. Everyone was making lots of money, and the greed factor had set in with
clients. After years of having to cajole, bully, trick, lie, and flimflam them into giving an order, they now
wanted to be sold. Johnson knew something was wrong. It was just too easy.
There is an old Wall Street bit of semiwisdom that the tops of markets are made when brokerage houses
start to hire aggressively, redecorate, or move to nicer offices. In early summer, theyd all toured the new
digs and were shown maps of how the offices and sections would be laid out. Each broker who had enough
gross to warrant an office was given three choices of location. The rookies were condemned to the calling
room, which was going to occupy the north side of the fortieth floor. One of the other features much
discussed was the fact that the office would have a dining room on the forty-first floor.
The building itself was chisel shaped, and on the east and west sides above the forty-first floor were
glass atriums that were part of Bears space. These would be turned into lounges and could be used to
entertain clients. A good number of the offices had doors leading out to small balconies, so immediately,
these became prize locations.
The office, like the rest of the industry, was hierarchical in three ways. The first was according to the
level of gross commissions; the second was patronage by management; those whom management liked
would be richly rewarded. Finally, because it was Bear Stearns, there was the unspoken but very real pro-
Jewish bent.
 Johnson, for all the beatings hed taken in the industry, could still be very nave. He believed that the
distribution of offices would be fair. Of his three selections, one was on the fortieth floor with a balcony
and two on the forty-firstone on the west side and the other the north. One of the two on forty-one had a
balcony, and either would have great views. That done, he went about his business.
The tour had been a stick in the anthill, and all the ants were moving around, swarming their enemies
and eliminating the competition for choice locations. David Kavrell was so intent on a prime spot that he
arranged to have a client nominate Gary for a man-of-the-year award from some organization that planted
trees in Israel. The calling room guys had all gotten together and signed Gary up for a series of golf dates
on famous courses in California. Johnson had been told by some of his friends not to expect too much in
the selection, but he ignored the warnings.
In July, the Dow Jones hit 2,510.40up 25 percent in six months, nine days. It was predicted the Dow
would be at 5,000 by 1989. It seemed that all over the world, things were better. The Japanese markets were
screaming higher, and real estate in Japan was going up by percentages normally associated with
hyperinflation.
As summer gathered force, Johnson decided to directly address the Ghost of Christmas Past by writing
her a letter. Hed done some checking and thought he had her address. Another thing that he hated about
himself was that he felt he was losing control of his emotions. He found himself on the edge of tears,
sometimes in frustration, sometimes from being moved by a movie or some music, sometimes by anger.
He wasnt a crier. It was foreign to him by desire and training, but here he was, eyes brimming with tears
and the catch in the throat before a sob was emitted. There was nothing so emotionally charged to him as
the Ghost. He thought long and hard, and finally, he wrote:
Dear Chandra,
I know that Im the last person you ever want to hear from but please dont throw this away.
Over the years Ive tried to tell you about how I felt when Dick died. We both loved him, you
as a wife and I as a brother. The bond between Dick and I started day one in the army and lasted
until that day. It was close and very personal. There is no stronger union of two men than to be in
battle together.
While I loved Dick and think Id have voluntarily died in his place, my grief at the loss pales
in comparison to what you bear. I cant take that away, that grief is going to be with both of us until
we die, as it should be, he was a great man and a greater spirit.
Since 1971 youve blamed me for Dicks death and to some extent I agree with you, its what
the shrinks call survivor guilt. Its true I was ready to take off before Dick as I told you in my first
letter, but Dick was in contact with the enemy and that gave him priority for takeoff. Even if I
hadnt been sick hed have still left first.
We all knew the gun was there but we could neither avoid it or destroy it as the village was
considered friendly. The army refused to believe us and did nothing to clear the gun or even
investigate after Dicks death.
Youre right, I might have been the one to die but karma or whatever changed all that. Dont
think for one minute since that day I havent suffered pangs of regret. I havent enjoyed a Christmas
since, I go into depression after Thanksgiving and stay that way till the new year.
Ill acknowledge that you have a right to hate me, but as we move to the end of another year
perhaps its time you recognize that Im hurting along with you. Youve haunted my year ends,
humiliated me in my office, scared my family, destroyed my firms and my personal property. Ive
suffered all of that along with my silent suffering for a lost brother. Havent we both suffered
enough?
Somehow in my heart I know that your lover and my brother Dick wouldnt have wanted us to
be at each others throats for all these years. Hed have told us in his best lawyer fashion that we
werent assuaging our grief, we were deepening it.
I cant affect your feelings. That will have to come from you, but I think youve done enough
to me and I ask you in the name of all that Dick was to leave me alone at Christmas. The holiday
 does not have any significance for me other than as a remembrance of Dick and Id like it to be a
fond memory and not one of terror.
Sincerely,
Phillip Johnson
He knew as he wrote that the letter had no chance of changing anything. Chandra was over the edge
into mental illness. Her hatred was probably the only thing that kept her going. He also knew that hed done
what he did so often: try to explain and educate with the goal that if people only knew the truth, they
wouldnt act the way they did. He also came at that moment to understand terrorism in an intimate way that
escapes the casual observer.
The purpose of terrorism is to force the objects of terror to change the way they live. To negotiate with
terrorists is to admit theyve hit you in a soft spot, and that, in turn, gave them the winning hand. Chandra
was terrorizing Johnson. She wanted him to change his life in repayment of what shed lost. With the letter,
he acknowledged that shed gotten to him and had made him change the way he lived.
To most of the world, he was the unemotional, analytical, regimented, purpose-driven guy who was
affected by nothing and had no illusions. He knew that such was part of his personality, but he also knew
that he had a romantic belief in the goodness of others. He knew Chandra wouldnt stop. But even through
the cognitive dissonance of his romantic side and his realistic part, he hoped shed see the light if he asked.
The letter wasnt really the catharsis he had hoped for. It wasnt powerful enough. It dredged up the old
guilt and loathing, fear and hate, the love and the loss. It depressed him. It the end, it did no good at all. The
letter was returned as undeliverable.
At the office, the boom was still on. Mergers were coming almost every day, and the markets were
being swung every day by program trades. A number of the big banks and brokerage firms had worked out
some mathematical formulas called algorithms that directed buys and sells of baskets of stock based on the
actions of any number of factors. Since the algos, as they were called, were binaryall in or all outthe
increased trading volume they generated could swing the market violently. The programmed algos were
being paired with passive indexing, in which a mutual fund or bank placed money in the stocks of an index
like the S&P 500 and left it alone. Johnson immediately saw a weakness. The S&P 500 members are
weighted by capitalization. The top company represents a larger percentage of the index than the lower
companies. The indexes had to be rebalanced. When that happened, new money or old money being
rebalanced flowed into the stocks per the capitalizations, pushing the biggest stocks up and depressing the
bottom stocks that were sold to maintain the proper weighting.
The weakness was that the Wall Street sales machine was in full swing, convincing pools of capital that
indexing and program trading were the answers to their prayers. The Wall Street sales machine is very
good, since it sells solutions to the two most powerful human emotions: fear and greed. As the sales machine
convinced more pools of capital to adopt the new strategy, money was flowing into the chosen stocks,
pushing them higher and higher. It wasnt as if the earnings of the companies were growing and investors
were bidding up prices; it was because of the sheer volume of money. So the rise was a form of induced
levitation. Johnson knew enough to know that if the money ever stopped, the indexes would fall, and fall
hard, and the same process that drove them up would go in reverse and take the indexes downand fast.
In the middle of August, the final office move date was set. It would start the weekend of October 24
and 25, and they would occupy their new offices on the twenty-sixth. The final map of the space was
distributed, showing all the office assignments. The warnings had been spot on. Johnson got none of the
offices hed requested. The only thing he got out of his requests was the forty-first floor.
Hed been assigned an office on the west side but near the south cornerbut not the corner office; the
closest thing to that went to the gun-toting militant, Gary Wollin. There was a small conference room in the
actual corner, and Johnson was to the north of the conference room. That wouldnt have been too bad,
except that the stairs to the western atrium ran right in front of his office. The front wall of his office was
solid, as it was the back wall of the staircase. You had to walk around the staircase to get to his office door,
which was recessed about seven feet from the front of the staircase. Hed been assigned a cave.
The demographic distribution was interesting. All of Garys buddies, the calling room, and the guy
everyone said was Garys lover, Kelly, were all on forty. Almost everyone on that floor was Jewish. The
forty-first contained the Christian brokers, for the most part, and a few Jewish guys who didnt fit Garys
preferred mold. Many of the guys on forty-one had more gross that the denizens of forty, but that was
apparently not one of the selection criteria. It was a complete fucking without the pleasure.
There was a good deal of resentment that couldnt be ameliorated, but most people just soldiered on
except Johnson, who was vocal about the injustice. There was nothing he could do, and he knew it, but he
felt he had to grouse about itand he did, regularly and loudly. He was doing himself no good, but he
probably couldnt have repaired his reputation in any case. There were other things that had started to
demand his attention.
At the beginning of August, there seemed to be a huge inflow of money to the S&P 500. The index had
been trading right along its twenty-day moving average price until the end of July. Then it broke away and
moved from about 308 to 340. The Dow Jones 30 moved up to about 2,710 by the third week of August.
The atmosphere was giddy with greed and feasting on the commissions flowing as freely as water. Brokers
were not dreaming of sugarplums for Christmas; they were dreaming of Rolls-Royces and trips to Gastaad.
It wasnt a giddy time for Johnson. A new metric hed found worried him greatly. Most stock investors
talked about the price of the stock divided by its current or forecasted earnings. Johnsons reading and
questioning had led him to a formula developed by the legendary investor Ben Graham. Instead of dividing
price by earnings, you divided earnings by price. PE was a multiplier; the other a percentage. Graham called
it earnings yield. The beauty of earnings yield was that it allowed a comparison between stock and bonds.
Grahams theory was that if the earnings yield was below that of ten- or thirty-year Treasury bonds, the
stock was overvalued. Why would any investor take the risk of stocks if he could get a better return in the
risk-free bond market? The idea rang with Johnson in what was probably a demonstration of confirmation
bias. He was seeing what he wanted to see and finding things that supported his conclusions. Johnson
realized that the earnings yield was below the Treasury yield, and therefore, a danger flag was flying.
Perhaps that realization was widely shared. After hitting new highs, the indices seemed to have scared
themselves and stopped going up. They began a retreat in what was quickly called a correction in the overall
bullish trend. A correction was considered good. Johnson wasnt so sure.
One of the stupidest things a person can do is to try to predict the direction of the stock market. A
person might be able to predict the movement of an individual stock price or a maybe get a few days of
direction correct, maybe even hit a multiple-month or year trend right once in a while, but overall, any
prediction for the market was bound to be wrong. Then there is the age-old question: why give others your
secret of success? If you can truly predict the markets, why not use that to make yourself rich?
The stock markets are mostly driven by the sum of the actions of millions of investors, each with a
unique perspective. Trying to predict the markets is trying to predict every persons action. The stock market
will always act to confuse the greatest number of people, so youre really dealing with a lot of confused
people. Johnson wasnt trying to predict the markets. He was just trying to warn people that there was
danger ahead. In his way, he couldnt stay silent. He felt a requirement to use whatever credibility he had
to warn others and did so almost daily at the meeting. Of course, he was shouted down and derided for
always being negative.
Those in the office who liked him tried to stop him on his self-destructive path. He was convincing no
one and only frustrating himself in the process. Despite the good intentions of these others, he persisted. As
his frustration grew, so did his irritable bowel problems. His self-imposed plight was made worse when the
market rallied a few times, which were each taken as total repudiations of his stance as well as his
intelligence.
With all the information hed gathered, he failed to act even for his own clients. He should have been
selling or telling them to sell, but he didnt. He justified this with a need for more information and more
research. He had information paralysis. He didnt have the courage of his convictions. In his few quiet
moments, he raged against himself, How is it that you won all those medals, that you could brave death
daily, that you can stand in front of an audience and talk extemporaneously on a moments notice, but
youre afraid to act here? It was rhetorical. He had no answer other than cowardice. And he did nothing
except to agree with clients when they wanted to sell. Rarely does a person attribute the faults he finds in
others to himself.
 Johnson found fault hourly, daily, weekly with the transaction culture of Bear Stearns. He had
condemned others for being corrupted by the need for commissions to the detriment of the client.
Early in 1986, the investment banker Martin Siegel of Kidder Peabody had been convicted of insider
trading on deals his firm was involved with. Siegel had rolled over like a sinking ship on his confederates,
one of whom was a slimeball named Ivan Boesky. Among the pantheon of heroes in the offices were
Boesky, Carl Icahn, Mike Milken of Drexel Burnham, Siegel, and a few others. All were involved in the
raiding and dismembering of companies that had been a feature of the 1980s. The hot-money men
worshipped every move and word of these guys. Siegel had been the cleanest of them all, so his arrest and
conviction were a real shock.
Based on Siegels testimony, the SEC had started a massive investigation and throughout 1986 had
bored in on Boesky. It was, of course, argued that it was just a convicted criminal going for a light sentence;
then it was just a routine inquiry, and then there were hints around the edges of an anti-Semitic crusade.
The information on Boesky and increasingly of the ties between Boesky and Milken kept leaking. Johnson,
at this point, formed another of his maxims: regarding SEC investigations, the first bad news is never the
last bad news.
At the end of 1986, Boesky rolled over on Milken, and the rats started to eat their own. The defenders
were strong, vocal, and loud, and the detractors looked like mental midgets for saying I told you so. The
cracks had started to appear before this, but Boesky broke the deal wide open.
The pompous Reed Freyermuth, who had helped Johnson get a job at Bear, disappeared from the office.
It was said that he was getting a divorce. Johnson could believe that. He believed that Reed beat his wife.
After all, a person couldnt be that big an asshole without beating his wife.
Johnson and Donnelly had cultivated a friendship with a fellow named Ray Ramirez, who was in the
cashiering department. As such, he was in a position to know a lot of things. Donnelly eventually convinced
Ray to spill the beans on all the dirt in the office. Thereafter, Ray was spoken of only as Deep Throat.
There had been thirteen or fourteen mergers done in 1986 that Drexel had funded. Reed had had a client
who owned huge stock positions in twelve of them, before the merger was announced. While genius is not
unusual on Wall Street (although its often well hidden), this smacked of wrongdoing. No one and no
organization is that good. The fact that the client had offices right across the street from Milken and Drexels
junk-bond office in Los Angeles was somewhat of a tip-off. In its widening probe of skullduggery, Reeds
client had been notified by SEC that it was under investigation.
The client must have told Reed. It had to have come from the client, because it wasnt publicly
announced. Reed decamped to England. He was still employed by the firm, but the story for mass
consumption was that he had clients in Europe and it was easier for him to service them from England. It
turned out the divorce rumor was true.
Johnson called the brother of a high-school classmate who was a big-time lawyer. The lawyer explained
that England didnt have an extradition treaty with the United States for financial crimes. As long as Reed
stayed in England, he was safe from investigation and prosecution. The fly in the ointment was that he
could only stay in England for a few months without running afoul of the difficult English immigration
rules. So, according to Deep Throat, every few months, Reed would go down to Switzerland for a month
and then back to England.
Since Johnson and Donnelly had sat next to Reed and his acolyte Stuart Reddick, they were questioned
by Gary and Rosemarie about what theyd heard. It was all done quietly, but there was little doubt that they
were trying to discover any possible witnesses. So, for almost all of 1987, Reed was out of the country, and
Deep Throat told them that there was massive document shredding going on, supposedly due to changing
record-keeping standards and the upcoming move.
The Boesky, Siegel, and Milken investigation had a lot of effects. One was that the number of mergers
fell off dramatically. The other was that Congress was finally stirred into action and was debating and taking
testimony about ways to control the merger mania. The rumors and half truths about Congressional action
moved the markets, but they all called forth an unbelievable cadre of industry spokesmen who wrapped
themselves in the flag to justify the merger actions.
 They made all the usual bullshit arguments that the purchased companies had all been badly managed
and that they had been hurting ordinary folks who were dependent on them for salaries and pensions. Left
out of that line of reasoning was that the raider usually terminated the company pension plan immediately
after taking over. The next argument was that so-called arbitrageurs like Boesky were providing much-
needed liquidity to the system by being ready buyers, sellers, and short sellers of stocks and bonds. This,
of course, was vital to the continued health of the financial systemnot to mention its profits.
There was the argument that if US brokerages and banks didnt finance these deals, foreign banks would
take the business, hurting the profits and livelihoods of thousands of Americans. Then there was the Luddite
argument. This was that the raiders had created new frontiers in finance, and it was only the companies that
didnt embrace the new frontier who were trying to control and ban it. The justification was endless, each
new iteration more fantastic and out of touch with reality than the previous one. Johnson listened to the
arguments in the morning meeting and judged them to have the same level of believability as a wind-up
parrot.
It was all self-serving bullshit, and Congress was going to act. That became clear as it moved into its
summer recess.
 Chapter 40
King Lear
Blow, winds, and crack your cheeks! rage! blow!
You cataracts and hurricanoes, spout
Till you have drenchd our steeples, drownd the cocks!
You sulphurous and thought-executing fires,
Vaunt-couriers to oak-cleaving thunderbolts,
Singe my white head! And thou, all-shaking thunder,
Smite flat the thick rotundity o the world!
Crack natures moulds, an germens spill at once
That make ingrateful man!
King Lear, Act III, Scene 2

It took several weeks for most of the anger over office assignments to pass. Well, anger was really not the
right word. It was more a combination of blas unconcern, disappointment, and the fulfillment of already
low expectations. Most of those who got hosed had had no expectations, so they accepted it in resignation
and focused on other things, like making money.
The only one who seemed to be actually angry was Johnsonwhose focus should have been on making
money and not office politics. Johnson had irritated Gary and Fred Gans. Hed ridiculed some of Garys
pets mercilessly. What had happened should not have been a surprise, but in some nonfunctional area of
his brain, Johnson deluded himself into believing that there was no connection between the office
assignment and his actions. He wouldnt just lie down and accept it. He continued to believe in a romantic
world where good deeds, honesty, loyalty, and other Olympian virtues were rewarded. It might happen
someplace, but it wasnt Bear Stearns or the brokerage industry.
The office hed been assigned was such an insult to a person of his gross level and years in the business
that it was nothing less than a slap in the face. Like a starting football player whos suddenly benched in
favor of a younger one, he considered leaving and started to look around. The few firms who were hiring
and would talk to him were the small, regional places with possibly limited life-spans. It was an instructive
effort as he found out just how damaged his reputation had become in the wake of Morgan Stanley and his
association with Bear Stearns. None of the better-known firms would even give him an interview. If he was
going anywhere, he realized, it was going to be out of the brokerage side of the business.
He looked at the idea of going to work for one of the tribes as an economic-development expert or,
failing that, the Bureau of Indian Affairs. In the end, like a lot of his ideas, they were pipe dreams. He
couldnt have stood the politics of the reservation or of the controlling government agency, both of which
made Congress seem frank and direct. Every day he came to work, his occupation of the cave would be a
reminder to him that he was on the outs with everyone in the office. He was so far from the in crowd hed
always desired to be part of, it was like he existed in another universe. His attempts to find another firm or
a place outside the industry were nothing more than the actions of a refugee seeking to move away from a
conflict. He was deeply ashamed of himself and masked his shame with fear and angernot that anger was
ever very far away. He was already cynical about the industry and the office, but he was also becoming
defeatist about his worth and fearful that hed spend the rest of his working life slogging stocks. He
envisioned himself old, too sick to work, competing with rookies, and sitting at some meeting with a neck
shrunken by age so that it no longer fit his collar, a huge gut, and a mismatched shirt and tie. It scared him
like nothing had scared him in a long time, because it was a personal failure.
Johnsons concerns about the markets were increasing. Interest rates were high and seemed to be going
higher. One of the bond traders told him the Federal Reserve had been doing something called repurchase
agreements, in which the Federal Reserve pledged bonds from its portfolio as collateral and borrowed
against them. The effect was to take money out of the economy. Repos, as they were called, would raise
very short-term interest rates and were used by the government to dampen growing inflation and
speculation. It was a warning, but it was too obscure for most brokers or investors to see or interrupt
correctly.
Johnson was convinced that he was right, that something was coming in the markets, and it wasnt
going to be good. Suddenly, for Johnson, all he saw were articles and news reports about the dangers in the
market flashing warning signs. There were people who were making as good a case for the market to
continue up as he was for it going down. Certainly, the bull case was easier to swallow and sell. He
deprecated and demeaned opposing points of view as well as their spokesmen. There are few things more
boring or irritating than a zealot. Johnson was taking on the guise of zealotry, and like someone faced with
a fire-breathing, hell-and-damnation evangelist, you believed Johnson or you were at best a fool, if not a
total idiot, and certainly going to hell. Hed rarely been this passionate before, and he was just a pain in the
ass and the object of increasingly nasty jokes. Not that anyone told him. Most zealots sitting on their high
horses with almost murderous gleams of insanity in their eyes arent easy to approach with contrary points
of view.
One of the theories going around was that the markets rise was being caused by the raft of takeovers
that had occurred in the past few years. The story was that the raiders had limitless money via the
mechanism of pledging the assets and cash flow of the target companies to the junk-bond financiers who
issued bonds based on those assets. In such an environment, no company was safe. There was no need for
the raider to put up any of his own money; it could all be borrowedand what was better, the interest was
deductible! A new acronym entered the Wall Street lexicon: OPMother peoples money. Stocks were
being bid up because it was only a matter of time before the company would be purchased. The thought
went: get in now, and ride the wave.
What finally turned Congress on was that some large companies in some influential congresspersons
districts had become targets. Congress was debating a bill to eliminate the tax deductibility of interest used
in takeovers. That wouldve been a real stick in the eye of the Wall Street firms hip deep in the takeovers,
the takeover crowd, the banks, and the law firms, all of whom were generating huge fees.
The debate went on in the halls of Congress and the trading desks of Wall Street. The fanatic free-
market advocates found themselves allied with the takeover artists, who found them to be useful idiots.
Those who supported the ban were tagged as wooly-headed liberals with no business sense, socialists, and
downright un-American. All of the raiders and their allies wrapped themselves in the flag of civic duty,
patriotism, Mom, and apple pie to create the picture of themselves as humble people who had worked hard
to get where they were. The fawning press fed the public reams of pap, praising people whom, for the most
part, no one had ever heard of five years before.
The reality was much different. Most the raiders were from wealthy families and had been born with
silver daggers in their mouths. Since a good number of them were Jewish, the press nattered on about them
being stereotypical sons of poor immigrants overcoming prejudice to become titans of business and hinted
darkly that Congresss actions were really motivated by an institutionalized anti-Semitism and a desire to
protect the interests of the WASPs. The fact that few WASPs even still existed on Wall Street wasnt
considered germane. In late August, the Dow Jones hit a high at 2,746, and the House passed the debt-
reclassification bill. Those who were deeply involved in takeovers proclaimed that the lack of deductibility
would only temporarily affect the takeover markets (what else would they say?). Everyone was assured that
the takeover artists were the new breed of entrepreneur and would find a way past this.
The market fell almost two hundred points in a few days, the most it had dropped in years. It got just
below 2,600 before it rallied to close above 2,600; then it dropped again to a new reaction low of 2,450.
Interest rates continued to rise. The international situation wasnt getting better; the administration was
wounded by the Iran-Contra scandal, and the conviction of some of the insider-trading targets dulled the
desire of the junk-bond kings and the arbitrageurs to expose themselves to SEC scrutiny.
As fall made its appearance, it wasnt just Johnson getting anxious. The money wasnt as easy to make
as it had been. More of the rumors these days were wrong, and the brokers were making mistakes and taking
losses. Some of the tension was broken when the market started to rally again and moved back above 2,600
in early October. Those new to the business and therefore too stupid to be afraid laughed at the older guys
who were expressing concern. Yes, this was a correction, but theyd happened before and the markets
always came back. Their motto was that if a stock was going up, you bought it because it would only go
higher. Not only was it the rage to buy the strength, you bought the weakness. So you just bought and
bought and bought. When Johnson would ask one of the hotshots what the company he was touting did, the
response was usually something along the lines of, It goes up.
There were only a few people he could talk to about this, and he landed on Dave Mead. Dave, this
thing is getting out of hand. Rates are rising, and Congress is going to kill the deductibility of interest. None
of that is congruent with a rising market.
Look, Phil, when the markets go up, you go with them. There are plenty of times when it will be down.
Make money while you can.
OK, were not going to agree about that. But whats this portfolio insurance I keep hearing about?
Supposedly, its going to prevent the institutions from losing money in a down market?
OK, are you familiar with futures? without waiting for an answer, he plunged on. Futures are a way
of betting on the future prices of the markets. Insurance means that a portfolio manager can sell index
futures short, and theyll go up in value as the market drops, offsetting losses in the stocks in the portfolio.
So theyre just shorting the market in the future?
Yeah. Its like buying put options on a stock as a way to protect a profit, or shorting the box.
So how does the selling of futures affect program trading?
Im not sure I know what youre talking about, said Dave.
OK, program trades are triggered when the S&P 500 or Dow Jones get too far away from the futures.
So if the market drops, the programs will start selling. The portfolio insurance will sell futures short. That
will drive futures lower, triggering more program trades. It could cause a cascade that will overwhelm the
specialists. Wont it?
Mead looked at him the way a teacher looks at a student who has just demonstrated that hes exceeded
the teacher. I guess it could, but Id think the exchange would halt trading. And the specialists are pretty
good traders. They can handle it.
But, Dave, the volume is growing daily. The futures volume is increasing, more and more institutions
are going to indexing, and Wells is out there selling program trading as hard as they can.
The discussion was unsatisfying and as usual left Johnson wanting more information, but he didnt
know where to find it. Actually, there was a resource in the office but it was out of his reach: Therese Payne.
After his run-in with her over the bond information, hed maintained a safe distance. He had had a couple
sword-crossings with her when hed stumbled on an institutional customer or two or ten. He found her so
unpleasant that hed have eaten worms before he asked her for help. So he stumbled on in partial ignorance.
Its for the historian to tease out the causes of a great event. Those who are at the point of attack dont
have time to spend trying to figure out the causes. They have to live and react to the reality. There are
always long and ponderous discussions about the causes and the effects of great events. The level and tenor
of each reflect the bias of the pundit, and they are almost always self-serving.
There were, to be sure, a few with a platform and more credibility than Phil Johnson who predicted
trouble. Just as John Mendelson at Morgan Stanley had predicted the beginning of the bull, Elaine Garzarelli
of Shearson predicted the coming trouble. They both came to their market calls by studying the squiggly
lines of technical analysis. Those who studied the fundamental data of earnings, cash flow, valuation, and
dividend yield always found something that justified staying bullish. Garzarelli was, for a period, the most
hated figure on Wall Street for her negative projections.
Johnson was noticeably nervous and more than usually sarcastic and nasty as the second week of
October opened. Monday was Columbus Day, a bank holiday, so volume was light. The markets were
down, but no one made a big deal of it since it probably wasnt indicative of a trend.
Options are contracts to buy and sell stocks or futures for a fixed time and at fixed prices. For a long
time, options were the purview of shadowy figures at the edges of the market. In the 1970s, options became
systematized and traded on exchanges. They offered holders of securities some protection in the case of a
down market and the ability to generate income. The SEC had allowed them to be used by trusts and other
funds, and their usage had been increasing every year.
 When options were systematized, dates for expiration were fixed. Options expired on the Friday
preceding the third Saturday of each month. Only the government could come up with that complex a
requirement. Options were going to expire on the sixteenth of October. Many times, these expirations could
strongly pressure the markets either up or down.
All week, the market was moving lower. Programs were hitting every day, and the markets just
continued lower. They tried to rally, but it was short term and reversed quickly. On the fourteenth, the Dow
dropped ninety-six points: 3.8 percent. The next day was a bit better but still down fifty-eight points. So,
over two days, the market had dropped almost 5 percent. It was now down over 10 percent from its high,
and that was the rule of thumb for declaring a correction.
The cognoscenti were predicting that the options were looking to a negative bias on Friday, but even
with the declines, almost everyone, including the supposed smart money, counseled holding on. The
worst was over and the correction would end soon.
The leading edge of the storm hit right at the opening bell on Friday. The market dropped sharply,
seemed to stabilize, and then dropped again. About noon, brokers on the floors of the exchanges typically
go to lunch. The lunches usually include a martini or two or twelve. When brokers returned to the floor,
braced by the martinis, they saw things differently, and there would be a rally known as the martini or
cocktail rally. Apparently, few martinis were consumed that day, because after a short rally, the Dow started
to decline again.
About 11:00 a.m. West Coast time, 2:00 p.m. East Coast, options traders began to square up their
positions in preparation for Octobers expiration at the close of trading. The Dows drop accelerated. The
difference between the cash value of stocks and futures increased, which triggered the programs traders,
adding more selling to the mix. At the end of the day, whatever bullishness remained had been washed
away. The Dow was down 108 points, or almost 6 percent.
Johnson punched some numbers into his calculator and announced that at the rate the market was
declining, it would take only twenty-two days for the Dow to be at zero. Gallows humor in the face of
terror. It was nothing more than bravado belying fear. The fact that the debacle happened on a Friday was
considered a good thing, because the weekend would allow tempers to cool. Rational investment behavior
would reassert itself on Monday. The weekend was anything but calming.
There is no hothouse that produces better rumors than Wall Street, and the rumors that weekend were
prizewinners. Nancy Reagan supposedly had cancer and was going into the hospital; Ronny had suffered a
heart attack. The Japanese were going to invoke a confiscatory tax on real-estate profits to dampen the
rampant speculation, and aircraft had been launched from a carrier, headed for Iran.
Stocks on the New York and American Exchanges were traded by specialist firms who had the
responsibility to make orderly markets. The firms occupied posts around the floor, and each might have
fifty different stocks it handled. They were the buyers and sellers of last resort, like the Federal Reserve
was the lender of last resort to the banks. During the mayhem on Friday, one of the specialists had failed,
its capital exhausted. The exchange had sold it to Merrill Lynch by the end of the day. There were rumors
of others teetering on the edge. The rumors included the names of several banks, including some Japanese
banks hard hit by the fall. The rule forbidding the circulation of rumors about the health of financial
institutions was honored, mostly, in the breach.
Johnson spent part of the weekend reading various papers, watching and listening to the few financial
shows around. The leading one was Wall Street Week in Review on Friday night, and the panelists were
bearish, but not overly so. The technicians quoted on the program (called the elves) had been bearish for
so long, theyd lost credibility, but they stuck to their guns. The other panelists and guests were largely
market strategists and portfolio managers who intoned that the market was suffering a correction and that
real investors, not speculators, should be buying stocks. Johnson, his cynicism at full blast, thought, What
else are they going to say? They did have a legal issue: they could only speak for themselves, not their
firms, and they were never going to say Run for the hills! Johnson had observed that Wall Street types
always hedged their bets, rarely coming right out and saying, Sell. Johnson was convinced that the
markets were going to get taken to the woodshed for a solid ass-whipping Monday, so he went to bed early
Sunday with the idea of getting to the office extra early the next day.
 On Friday, the market had dropped to a low, but at the end of the day, the short sellers, those betting
on a decline, covered their shorts, and the market rallied a bit into the close. Mondays opening was like
the whack-a-mole game, and the mole was the Dow Jones. It stuck its head out, and a hammer bashed its
brains out. Usually the markets open within a few points of the previous days close, but Monday the market
opened with a gap down. There was so much selling at the open that the Dow Jones started fifty points
lower, and twelve of the thirty stocks in index couldnt be opened as the specialists couldnt provide a
balanced market. Sometimes, with a big down opening, the market will rally shortly after the open. There
was no rally. The system for reporting trades, the ticker tape of the old days, could only recognize a certain
number of characters at a time. The orders were coming in so fast that the tape was overwhelmed, and when
that happened, the tape ran late. Today it ran late from the opening.
Looking at a late tape was like looking at a star ten thousand light years away: the light you saw had
left the star before the Egyptians built the pyramids. You had no idea if the star might have collapsed ten
thousand years ago. When the tape was late, the price you saw was the price one, two, or even three hours
ago, and there was no way to get more current data. The only people who knew the actual prices were the
specialists, who at the moment were just trying to stay alive. The volume was so heavy that the specialists
couldnt buy or sell stocks in sufficient quantities to make the markets orderly. Well, that wasnt actually
the case. They could buy all they wanted because there was no shortage of sellers. The problem was, they
couldnt sell what they had to buy as purchaser of last resort. If they couldnt sell, their capital quickly
would be fully committed, and when they reached the capital limits set by the exchange, they had to shut
down. So heavy was the volume that the specialists couldnt even sell short to protect themselves. There
was a real danger that they would run out of capital, so all of them pledged the stock they owned to the
banks for loans. Of course, the value of the collateral was dropping, and the banks were starting to get
worried about the stability of the loans. If the specialists failed, the exchange would freeze, and true panic
would set in.
Making the problem worse was a weather event. On Friday, what could only be described as a hurricane
hit England. The City of London, the heart of the second-largest financial market in the world, was
paralyzed by trees blocking the roads, a flooded underground, power outages, and roads clogged with
abandoned cars. Europeans who needed liquidity had to sell in New York, putting additional pressures on
the US markets and further distorting prices, which added to Mondays confusion. The London markets
werent fully functional by Monday, so the demand for liquidity continued to fall on New York.
About 10:30 a.m., the tape was basically reporting the days opening trades and running three hours
late. Everyone in the office was glued to their Quotron screens and fielding calls from clients. The sales
assistants were juggling multiple calls and were very busy. Outside Johnson and Donnellys office were the
sales assistants of Reed Freyermuth, Stuart Reddick, Fred Gans, and Dave Mead. There had been a real
buzz of voices at their stations all morning, but suddenly they went quiet for a minute. Then in unison, they
yelled, Phil! Your mommy is on the phone!
Laughter could be heard rippling in the immediate area, and soon, the story was everywhere. It was
indeed his mother calling, as mothers do, to make sure he was all right amid the hurly-burly of the day. He
assured her with a conviction he didnt feel that he was fine and that all would be well. He was starting to
smell something that triggered a response in his distant memory. It was permeating the office as if blown
through by the ventilators. It was a rancid smell of wet laundry left to sit too long combined with faint
tinges of body odor, the acidic smell of sweat, and the tang of urine. It was so real and strong to Johnson
that he looked at Donnelly to see if he was noticing the smell. He was, as usual, oblivious. Then Johnson
realized it wasnt a real smell; it was a reflected memory, the smell of fear.
Leaders are revealed in crisis, but theyre not made there. That takes place over years and years of life.
The leadership most admired and remembered is the kind that acts when the world seems to be falling apart
and hope is gone. Its the time when fear dominates and freezes people who think of themselves as
courageous. Its at those times when true courage is demonstrated.
Those who were older in the business might have seen something like the decline underway, but
probably not. They, like Johnson, had seen a bear market but nothing like the speed and power of this
decline. The brokers in the seal rookery of the calling room had no idea of what was happening, and they
were perhaps witnessing the end of their careers. All the hard work theyd done, all the money theyd made
for clients was being wiped out in seconds, and they were afraid.
Johnson had known fear intimately and knew that fear unchecked could cause mental paralysis, and
worse, unfocused actions. There was no way to counter the fear with reason, because most fear is irrational.
The way to counter irrational fear is to give the fearful person a direction. Johnson did what came naturally.
He led. Leadership is not about being right. Many times, its about merely acting when others wont or
cant. Johnsons life experience told him to act, and act now. He walked around to the calling room, and
almost all of the rookies were staring at their screens, frozen.
Johnson jumped up on one of the desks and bellowed, You cant trade here. You have no idea what
the true price is. Youd be killing your clients if you sell, but no one is calling your client offering
explanations or a friendly voice. All over the country, brokers are frozen in front of those fucking machines,
looking at useless information. Get on the phone and call your clients. Theyll be glad to hear from you. Go
back to all those prospects who blew you off because they had another broker. That other broker is shitting
in his pants. You call, and youll be the hero. If they want to buy, have them put limit orders in on the stocks
down 30 percent from Fridays close. You might get them, and when this over, youll be a hero to them and
theyll listen to anything you say! He leaped down from the desk to applause. He walked around the office,
repeating the same message. There was nothing else to do but try to replace fear with hope.
The market continued to sell off, and rumors spread, aided by unskillful communications and downright
stupidity by the media. The chairman of the SEC made some comments from Washington that were reported
as indicating the commission might order a trading halt. That wasnt what he said, but in that environment,
fiction was real. The press was so hell bent to get a story out, it repeated the incorrect comments long after
the SEC had clarified them. The result was increased selling. The descent took on the flight characteristics
of a rock. As the market decline steepened, the portfolio insurance that was supposed to protect portfolios
kicked in, and waves of futures and options slammed into the market.
One small blessing of the brokers being afraid of calling clients with bad news was that retail order
flow had frozen, reducing some pressure. The institutions, however, continued to funnel huge sell orders of
hundreds of thousands of shares through the specialists. The flow was continuous and building. The
specialists capital was eroding, and if they failed, the whole exchange would collapse. There was no plan
B.
By noon in San Francisco with an hour to trade, the market was down three hundred points. Everyone
was frozen. Usually, during a big decline, bargain hunters would step in and purchase discounted stocks,
so the last hour was going to be critical. One of Johnsons clients in Seattle, an unexcitable fellow but a
good investor, called. They discussed the events of the day. He told the client that he had no idea of the true
prices; all he could give them was what they had been at 9:00 a.m. The client thought for a second and then
rattled off a list of high-quality stocks and price limits at which he stood ready to buy. He was doing what
Johnson had told the calling room to do. The clients prices were 50 or 60 percent below the closing prices
on Friday. When he gave the thirty trade tickets to the trading desk, the trader grabbed the PA microphone
and announced, Phil Johnson has just given us the first buy orders weve seen all day! Way to go, Phil!
There was muffled applause.
The market seemed to hang over the abyss of burning hell. Millions of collective breaths were held or
breathing became short as the world waited for the answer. Rally or fall? Live or die? Health or poverty?
Then: the answer.
Over the loudspeaker system from New York came a shouted message from the head of trading.
Programs starting to hit the floor on the sell side, and theyre huge! Breaths were released as the Dow
started to fall again.
There were no people on earth more relieved to hear a bell ring than those on the floor of the exchange
that dayexcept perhaps a boxer who was getting the crap beat of him for fifteen rounds. Sure, they would
have hours of work to do, sorting out the mess, but at least no more damage could be done until the morning.
At 4:00 p.m. the final reckoning was done. The Dow had fallen over five hundred points21 percentthe
largest decline in history.
 Johnson had been on the phone almost all day, talking clients down and trying to impart wisdom and
calm. He was used to it. Hed had to do the same thing with rookie field-artillery observers the first time
theyd experienced ground fire when flying with him. Most people had little idea of what had happened
until they got home and saw the news. The media, seeing the opportunity to sell newspapers, filled air with
stories of woe and terror. As usual, the big-city papers focused their stories on the effect this would have
on the poor, the homeless, the stupid, women, and Israel.
Johnson stayed late for no reason than that he thought it was right. He finally got home at 9:00 p.m.
Hed been nervous and worried going into the crash, but he was flat terrified now. The day of a crash was
bad enough, but he knew that the day after could be worse. The banks, as always, found the single thing
they could do to make the situation worse. The titans of money decided to withdraw credit lines from
brokerage houses, floor specialists, and traders. Wall Street lives and dies on credit. Withdraw credit, and
the fractional reserve and payment system collapses. This was the real danger, since in Johnsons opinion,
the most feckless and stupid group in the world, the banks, were in charge.
Johnson was worried enough that he stayed up late, hoping to get some glimmer of what was to come
in a late report of how the London markets were reacting. He got no help from the media, so he picked up
the phone and called the Bear Stearns office in London. People were struggling to work and the markets
were barely functioning, but he got a trader on the phone by lying about his position. He told the London
trader he was a managing director in the States, which was stupid because the guy could easily check. From
that, he developed yet another maxim: never tell a lie about something that can be easily checked. It turned
out that the London markets were down on very light volume but were nervously holding. The rest of the
European markets were down. Sleep was all but impossible even after vigorous sex, so he was up and
headed to work at 4:00 a.m.
There wasnt much he was going to do, since the clients were still asleep. He could, however, talk to
the bond guys, some of whom he had a decent relationship with, and even a couple of the equity guys. He
listened to the entire morning research meeting from New York, which did little to assuage his terror.
Gradually, the other brokers started to stumble in, but by then, he had a good picture of what was going
to happen. The stupid banks had pulled credit lines from almost all of Wall Street. The system was freezing,
and bond prices were rising and yields falling. People all over the world were seeking the safety of bonds
and disdaining the heightened risk of the stock market. He started to field calls right at the opening from
some of his early-bird clients and told them straight out what was happeningno opinion, just the facts.
The lack of credit was seen immediately. The specialists in several Dow Jones stocks couldnt open them
due to lack of capital. The smell of fear had moved from the US markets to the rest of the world, and the
world waited to see if the United States would lead a further decline or be the savior.
It wasnt like there was a huge volume of trades. The day before had scared the shit out of everyone,
and they were tiptoeing into action. The lack of an opening indicator (the Dow Jones) prevented some of
the program traders from executing, which was a positive. The real problem was, there was no bid for
stocks. In normal times, the specialists and the market makers would be the opening bid to get things started,
but not on Tuesday. The market drifted. John Phelan, president of the exchange, appealed for calm; David
Ruder of the SEC appealed for calm; the White House had some unfocused remarks that were supposed to
be calming but fell way short. The calm was deceptive. It wasnt going to stay calm much longer if the
credit stayed cut off.
The one body so far unheard from was the one that could make the difference: the Federal Reserve.
The Fed regulated the banks, it regulated the money supply and the short-term bond market, and it printed
currency. It could be the source of liquidity if it would act. The new chairman, longtime Wall Street
economist Alan Greenspan, was an unknown quantity. He was known to be on the conservative side
politically and economically, but no one knew what he might do in a national leadership role during a crisis.
He wouldnt have been the first leader to fail in times of great stress. Perhaps the bigger question was, could
he act?
As usual in a crisis, the press was useless. It stated the obvious time and time again with a thrill of
discovery. It didnt even bother to edit its stories or realize the stories were contradictory and in some cases
just wrong. The real news was actually coming from Wall Street, of all places. It was on Wall Street where
lurked those whose whole lives were centered on knowing the obscure aspects of the Federal Reserve Act.
Those voices began to say that the Fed had the power to act.
Slowly, after 8:30 a.m., the fog of crisis started to lift. Rumors were that the NYSE, the New York
Federal Reserve, and Greenspan were negotiating with the banks to reopen the credit lines. All the Dow
stocks were open, and more calming statements were issuedwhich actually worked. Late in the trading
day, it was announced that the banks had agreed to reopen the credit lines, and only one specialist firm had
to be rescued by being sold to Bear Stearns. The immediate crisis had passed; now the rest was up to God
and the titans of Wall Street.
While office assignments had been made during the summer the date of the move was the coming
weekend, and the market crash created new urgency for making sure the telephones and computers would
be working in the new office. Even the dimmest realized that with the events of the last few days, clients
wouldnt act well if they couldnt contact their brokers. Johnson made a point: Since were getting a
different phone exchange and the old numbers cant be forwarded, its critical that the message people get
if they call the old number gives no hint any trouble with the firm. He was assured by office management
and the telephone company that they were way ahead of him and had addressed the issue long ago.
They finished the packing that had been interrupted by the crash and filed out Friday like reprieved
men going back to civilian life after long imprisonment. On the way home, Johnson stopped at a Radio
Shack store and rented a cellular phone.
 Chapter 41
Aggressive Action
The next week was anticlimactic, to say the least. Everyone was nervous that the markets might start to
slide again, but it was pretty obvious to everyone from the Fed and the president down to the humblest
stockbroker that what needed to be done would be done to stop another fall.
The office was like a bunch of new soldiers right after their perimeter had been attacked; they jumped
at every sound. Every decline in the markets called up images of fear and destruction. Johnson was sorry
for many: the fruits of their years of calling and work had possibly vanished. Brokers early on develop
paranoia about their jobs and firms. If the market continued to fall and became another bear market, it was
likely that most wouldnt have jobs in a year.
Monday the twenty-fifth arrived; everyone got in early to get their offices ready and because the
markets still had them all worried. The first problem was getting into the building.
One Sansome Street was built on the carcass of an old bank building; the developers had secured a tax
break by preserving the old facade. The rest of the building was a rectangle that almost qualified as a square.
Its gleaming white cladding was set with horizontal bands of windows tinted black. With them against the
white, the place looked like a zebra. There were several entrances, including one that led to the Montgomery
Street BART station. The building lobby was small and tightly policed by security guards at all times.
Badges were required. No one had given the Bear employees badges.
They could get temporary building passes, but the elevators unlocked by placing badges on a reader,
so no one could use the elevator. And no one was walking up forty-one floors. They piled up in the lobby,
signing in and being issued temporary passes. Groups would be taken to the elevators and allowed to go
up. Unless badges were forthcoming, they were trapped in the offices until quitting time.
Everyone was very nervous, but they had to juggle their concerns over the markets with the necessity
of unpacking and stowing all their stuff in their new digs. No one needed any more adverse stimulation.
What you dont need is almost always what you get.
Johnson got off at forty-one and lugged his brick of a cell phone and his briefcase to his office. The
lights were functioning, but he noticed that the Quotron was blank. He jiggled the keyboard and looked for
the on-off switch, but none of that worked. He then picked up the phone and was greeted by total silence
no dial tone. It was now about 6:00 a.m., and the markets would open in thirty minutes. No one wanted to
be without a view of the markets. His next-door neighbors Quotron and telephone werent working either.
So they went off in search of telephone people.
As they walked around the office, they were joined by others who were also deaf and blind in middle
of the minefield of a nervous market. The finally found a single very anxious Pacific Telephone
representative on the fortieth floor.
I know youre concerned the phones arent working, began the nervous young man. Its just a
temporary thing. We werent sure what time you were going to occupy, so we assumed nine, and the phones
were tasked to come up then. He licked his lips and then continued, We have people in the
communications rooms and at the exchange office, and they should be up in about five minutes.
One thing a broker gets good at is recognizing bullshit. Barry Bellport put the nervous nature into
words. Youre probably lying to us. There was a murmur of assent in the group.
Johnson was suddenly inspired. Hed dragged the cell phone with him, and now he dialed the old Bear
Stearns number. It took him several tries to get the new technology to work, but when he connected, his
face tightened in anger. The message said, The number you have dialed has been disconnected, and there
is no new number. This was exactly what hed warned Gary and the other management types about, yet
here it was. He let the message repeat and handed the phone to Jack Garfinkel, whose face fell. Jack handed
the phone to Barry, and Barry to Donnelly. The tension was rising fast.
I just called our old main number and got a message that the number was simply disconnected. Thats
what our clients are hearing, seven days after the biggest drop in the history of the markets? What the fuck
is that about? The Pac Tel rep was clearly worried that he was about to be lynched off one of the shiny,
new balconies and was looking around for help. Im going down to the main telephone room and see
whats going on, he said.
They let him go. There wasnt much they could do to stop him, and if they had, it wouldnt have helped
get the phones working. Johnson picked up the cell and called a client he talked to every day to give him
the cells phone number. A number of the other brokers asked to use the phone, but he was hesitant since it
cost him $3 per minute and they all talked like old wivesespecially Donnelly.
They all dispersed to their offices to unpack. Thats all they could do. They couldnt even go to one of
the all-night bars on OFarrell Street since they couldnt get back into the office if they left. Gary came up
to Johnsons office asking to borrow the phone to call Ace Greenberg in New York, and Johnson gave it to
him without any mention of the cost. Several of the institutional guys came over to beg the phone, and
Johnson told them they could rent one at the Radio Shack a few blocks away. He found it hard to believe
that he was the only one to think of doing it.
Finally, he was visited by the hyperactive, squatty form of Elliot Beim, head of institutional equity,
massive sexual harasser, and general shit. I need that phone. We have important clients to contact.
I need the phone for my clients. Ive given them the number, and theyll be calling me. I want to be
here for them, Johnson replied, giving Beim too much information. He should have just said no.
I can get the phone. I can talk to Gary, and hell get it for me. Our clients are important and do a lot
of business. More than some retail account, tried Elliot.
Too bad. Go rent one yourself. Besides, it costs me three bucks a minute. You going to pay me back?
Youre supposed to be a team player. The team is hurting here, and you can save the game. You can
be a hero, came Beims response.
Johnson had to admit that he was good. Others might have been swayed, but Johnson had been on the
receiving end of institutional goodwill and team play and wanted nothing to do with either one. He was
fairly sure Elliot and he werent on the same team anyway. No, Elliot, this is my phone and my money.
Ill use it for my purposes.
You arrogant asshole, Johnson. Now I see why no one likes you.
Please remove yourself from my presence, said Johnson with all the superiority and haughtiness he
could muster. They locked eyes, and Elliot knew he had no leverage. He left, muttering a strings of curses
and threats.
It took two hours, but suddenly, first the Quotrons came up, and then thirty minutes later, the phones
started ringing. Immediately, the office was abuzz with voices calling clients, telling them that the message
on the old phone was in error and making themselves out to be the heroes who got the phones working.
The Monday of the move was relatively quiet, but the next day, the market dropped 156 points, and
assholes all over the place started to pucker up. It was the back of the eye of the hurricane, and once it
passed, things started to get back to normal. Gradually, they settled in. The badges took several days because
each person had to fill out a long form. Johnson told everyone that the last time he did that much paperwork,
he had ended up in Vietnam.
His new, out-of-the-way location isolated him from the life of the office. If anyone wanted to see him,
they had to make a special effort. Some of Garys boys decided that the unfinished atrium above him was
a good place for a nooner, a quick dope hit, or a beer or two, so he was constantly greeted with feet pounding
the stairs and raucous laughter and deliberate foot stomping above him.
Someplace in all the moving in and shifting around, Johnson made two really important decisions. First,
he was going to preempt the Ghost and tell the security guards downstairs to be on the lookout for her
between Thanksgiving and Christmas. They would only stop her if she tried to get past them, but it was
better than nothing. He and the family wouldnt go out much during the holidays and would try to change
their patterns so the Ghost couldnt find them.
Second, he decided he was leaving Bear Stearns. Like most of his big decisions, it wasnt like he said
it out loud or had a eureka moment. It was an intangible decision that arrived on the wings of a lot of small
thingsthe feeling that he was disrespected, the feeling that he was in the wrong place, his growing
desperation in his family situation, his restless nature. He felt that hed had no impact on anyones life; if
he had, his family wouldnt be dominated by a sociopath and controlled by a rapidly developing psychopath.
If hed had an impact, hed have more loyalty from his clients and wouldnt have to be chasing new people.
He was convinced he was wrong in what he was doing at Bear, and he knew in that ego-driven way of
men that he could do other things, and do them well. He was starting to believe in himself and his capacities.
It was about time. It was a realization forced on him as the only rational person in his home and through
the vicissitudes of the brokerage business. He was forced to rely on things long implanted but long ignored
and long deprecated.
He was discovering that people actually liked him. Not everyone, of course, and it did bother him when
others didnt like him. He wasnt the glad-hander like Donnelly, but he could, on occasion, be the life of a
party and a good conversationalist. He made quick and usually correct decisions, and he was unafraid to
make them. He took full responsibility for his actions (in fact, he took more than full responsibility), which
again made him unique. He had a slashing and fast wit that wounded as often as it amused, and he was
willing to take a stand even it was unpopular or controversial.
Even with all these discoveries, he still wanted what he couldnt or didnt have. He wanted the big cars,
the houses, the vacations, and the beautiful life, and it drove him constantly. He was still young enough to
be unsatisfied, to be a dreamer, and to be a romantic. He wanted to sing like Pavarotti even though his voice
was so low as to be almost inaccessible to human hearing. He wanted to have an athletic body like a
decathlon champion; he wanted to be an investment guru like Warren Buffett. He wanted them all, and he
wanted them to the point of jealousy.
So this bundle of contradictions and unmet needs called Phillip Johnson drove himself relentlessly
toward something. He hadnt the wit in all his reading and study to focus on one, shining goal that would
capture his imagination and drive his decisions. He hadnt the will to share his vision with his family or to
take charge. He lived his life by the grace and sufferance of others when what he really needed was to have
them live by his.
In all his streams of thought, mixed with depression and fear, he came slowly to the inevitable. He
wasnt ever going to be the top producer anywhere; he lacked the skills and the killer motivation. He wasnt
going to work for the white-shoe firms ever again. Perry Hall had crushed that dream under his polished
wing tip.
Slowly, brick by brick, the decision was built, and while he never stated it, he decided that in addition
to leaving Bear Stearns that he had to leave the sell-side of the industry. The investment management side
was where he was headed but not as a marketer, which by process of elimination meant going independent.
As all the bricks fell into place, he experienced the power of a decided course of action. His thinking
changed, his approach changed; he started reading a new set of books, and he began to think deeply about
himself. He was starting to evolve. Late, but it was happening.
After October, the rest of the year was an anticlimax. The markets seemed stunned and drifted along
until, in early December, the Dow appeared to stop going down and to finally stabilize. As the market
bottomed, Johnson was confronted with one of his behavioral quirks. Hed read the works of all the great
market gurusBuffett, Baruch, Templeton, Graham, and Lynch. Hed read and reread The Crowd by
Gustave Le Bon and Charles Mackays Extraordinary Popular Delusions and the Madness of Crowds. He
knew their lessons.
Great or even good investing requires counterintuitive thinking, and Johnson was too linear and
conventional in his thoughts. Good investing requires discomfort. It requires being wrong for extended
periods and the courage to stay with ones convictions. It requires, at some point, that you realize that no
amount of additional knowledge can make the decision for you or make it easier. You just have to jump off
the cliff.
The market was down, and things had gotten much less expensive than in the idiot days of August. The
masters all said to buy when others wontbuy straw hats in the winter. He knew it was right. He knew
from his study of history that those who followed this advice reaped great benefits. His caution had done a
good job of protecting people from the damage that had occurred in October, but that same caution kept
him from buying in early December. He just couldnt pull the trigger, always waiting for one more piece
of information, until this data or those earnings were released. He did nothing, and he missed the
opportunity.
He was so callow that he didnt even recognize his weaknessfew investors doand so he couldnt
learn. He had trained himself not to be emotional, without the recognition that there are times when
emotions are beneficial. To him, all emotion was weakness, and an emotion, the fear of nonconformity,
trumped his acting on what he knew to be true. He had, after all, not learned the lessons of the masters.
Johnson spent a good deal of time just thinking. He was still traveling to the tribes, so he often had long
flights and drives with nothing to do. Its amazing how thoughtful a person can get driving three hundred
miles to a reservation in North Dakota. Once youre past the excitement of seeing Minuteman missile silos,
each with enough nuclear bombs to kill half the world, theres not much to look at.
Johnson and Dianne decided not to go to the Bear Stearns Christmas party that year. Dianne was still
beating the dead horse that shed been drugged, and he didnt want to spend time with the folks he worked
with all day. In truth, he was becoming ashamed to work in the San Francisco office.
Hed never been a fraternity boy himself, but he knew all the stories. The office was like an endless
party. No woman was safe from harassment, and no man was safe from the sexual predators among the
women. His bad luck at being stuffed in the corner behind the staircase hadnt been the end of it.
During the move, sales assistants were reassigned, and Wollin had drawn a new girl named Christine.
Johnson had drawn a maniac named Lisa Boudreau. Christine was a doll-like woman with soft, strawberry-
blond hair and a face that wouldve been at home on an ingnue. Her figure was attractive but not bodacious.
She was married, and eventually, it was discovered that her husband was Chinese, a cop, and a member of
the San Francisco Police Tactical Unitthe SWAT team.
Christines husband was often on duty all night or away on training missions, and she grew lonely. Bear
Stearns was a full-service firm, and several of the guys in the office provided her serviceoften multiple
guys at the same time. Johnson heard the stories and told a couple of the younger brokers they were nuts
and that if her husband found out, they were all dead. But it was shrugged off.
Johnsons assistant, Lisa, lived at the corner of Nutso Street and Predator Avenue. She wasnt
unattractive, but she was loud and forceful. Shed been married and divorced. Her highest aspiration was
to be a wife and mother. She was in the right place to come in contact with single, wealthy men and young,
single brokers, but the brokers in particular wanted to drive the Ferrari, not necessarily buy it. Lisa might
let them drive, but if they test drove she was going to pursue them to close the deal.
One day, Brad Wilson, whom Johnson had worked with at Dean Witter, came to see Johnson. Brad was
selling partnership interests for Public Storage and had been in the office talking to another broker. Brad
was an ex-Stanford football player, big, and handsome in a weathered way. He was an outgoing personality
and liked to flirt.
Brad made the mistake of flirting with Lisa on the way to Johnsons office. Lisa took it the same way
a runner in baseball took a wave-in sign from the coach. Johnson and Brad talked and lied to each other as
brokers do. Johnson learned that Brads marriage had broken up. As Brad was leaving, he insisted on saying
good-bye to Lisa as he and Phil walked to the elevators.
His ass had no sooner hit his seat when she was in his office. There was no pretense. Who was that
guy? And without waiting for answer, How do you know him? Breath. Is he single? Finally, the motor
mouth stopped.
His name is Brad Wilson; we worked together in Palo Alto. He played tight end for Stanford and
almost went pro, but blew his knee out. Hes a rep for Public Storage. Johnson flew right by her money
question about marital status.
Is he single?
He was married and had a son, but he told me hes divorced. So I guess that makes him single.
She looked at him for a moment, excitement rising in her voice and eyes, and breathing faster. Not for
the first time, Johnson noticed that she had a nice set of knockers. Hes not a client, is he?
No, just a friend. Johnson knew where this was going.
Would you mind if I called him? Bingo. The ultimate reason for the conversation.
 Youre adults. I have no control over what you do, was Johnsons reply, and he handed over Brads
business card. Lisa floated out of the office, holding the card like a holy relic. She was useless for the rest
of the day as she prepared for her conquest.
There were other outrages during the remaining months of 1987. Elliot Beim, ace harasser, had an
assistant named Rosa Tran. Tall, angular, Vietnamese, and Filipina, she had a reputation. One day she was
away from her desk, so Elliot, with his usual delicacy, paged her office wide, Rosa Tramp, Rosa Tramp!
Please report to the institutional equity desk!
There was a family in San Francisco named Cohen, the head of the family was Julius Cohen and he had
five sons. It was said that Julius was the only man in town with six assholes. One of the Cohens worked in
Johnsons office and the others eventually gravitated to Lehman Brothers office in San Francisco.
One of the former sales assistants had left Bear to work at Lehman Brothers. The sales assistant, Sandra
Crooks, had the unfortunate desire to be a broker, which led her to ask actual brokers questions. Sandra was
attractive, which was normally a good thing, but in the presence of the Cohens, it was a disadvantage. She
considered herself equal to any man. Her bold approaches to the brokers with eye-to-eye contact were
filtered through the sea of testosterone and obviously indicated that she wanted sex.
Most of the Lehman brokers were decent people, like people everywhere, but the Cohens were in a
class all of their own, and it wasnt a high one. Several of them made passes at Sandra, and her rebuffing
them translated to her being a lesbo. After all, if you didnt want to sleep with a Cohen, there had to be
something wrong with you, not them.
In early December, Sandra was returning from lunch and had the misfortune to have the Cohen boys
get on the same elevator. There were also two people who werent Lehman employees. The Cohensit
makes no difference which one; they were interchangeable assholessaid, Hey, Sandra, the Christmas
party is next week. You know its a time to exchange gifts. You give me a blow job at the party, and Ill
make sure you get a bigger bonus!
Sandra remained quiet, which inflamed the assholes. Yeah. If you do us all, said another, Think how
big the bonus will be!
The elevator was now five floors below the Lehman office, and they stepped it up. One of them, later
identified as Matt, pulled a banana out of his pocket. Sandra, you know how a sales assistant eats a
banana? Without waiting for a response, he held the banana in front of his mouth with his left hand and
put his right on the back of his head, pushing it forward so the banana went into his mouth.
Another Cohen, this time Jerry, jumped in. Remember, shes a lesbo, so she doesnt know anything
about bananas or pink steel, he said, using a common reference for a tumescent penis.
The elevator reached the Lehman floor. Sandra bolted and ran down the hall, followed by the Cohens
in paroxysms of laughter. The other people on the elevator continued to their office on the floors above.
The story reached Bear Stearns through the offices of Bob Cohen, the stupidest of the lot. Johnson and
two other brokers were having lunch in the offices restaurant and Bob took a seat at Johnsons table.
Have a seat, Bob, said Johnson in a sarcastic tone. But voice games were lost on Bobs subnormal
intelligence.
You remember that fucking cunt sales assistant, Sandra Crooks? He started with no preamble or small
talk. Shes a fucking lesbo, and she filed a sexual-harassment case against Lehman and my brothers.
Fucking bitch probably hasnt had any recently.
Johnson had a contemptuous opinion of the guys in the calling room, but Johnson considered Cohen so
beneath contempt he wouldnt have allowed him to care for his dog. Bob, you might want to keep it down.
There are ladies around, said Johnson.
Fuck them. That bitch is going to get my brothers fired! Johnson had to admire the Cohens nature,
circling the wagons in defense of each other. Bob was obviously really pissed. His face was getting the red
highlights on the cheekbones, and his veins were pulsing in his neck.
So what? If they did it, they deserve to pay. If they didnt, they will be cleared. These things are very
hard for the woman to prove. Besides, what can we do anyway? It doesnt affect us. She left Bear a year
ago.
I want to get all the dirt I can on her to help my brothers. Any of you fuck her?
 I thought you said she was a lesbo. Why would she have anything to do with any of us? Johnson was
toying with Cohen. It amused him to mess with the simpleminded.
My brother Matt says that if we can get enough dirt on her, shell just drop the case to not have the
fact that shes a whore spread everywhere.
Johnson and his companions affirmed that they hadnt had sex with Sandra and didnt know anyone
who had. Cohen stormed away.
It turned out that Cohen could have dug up that Sandra pulled a train for the entire Bear Stearns staff,
and it wouldnt have made any difference. Sandra had started crying as she left the elevator, and another
sales assistant saw her and asked what was wrong. Sandra told the story to the other woman and how it
made her feel, and the two went to the manager. Still, it was her word against that of the four of the biggest
producers in the office. Then salvation arrived. The two people who had ridden up in the elevator had
thought about what they had heard and consulted with legal counsel. Then they dropped down to the
Lehman office and lodged a formal complaint.
Bob Cohen stormed around for a few more days trying to get dirt, but he gradually faded. The Cohens
were not fired or disciplined in any way, but Sandra retired on the $3.5 million settlement from Lehman.
The Ghost didnt physically visit in 1987. Maybe the Ghost Busters got her before she slimed anyone
else. She did, however, send a letter of her accusations that there was no fate too awful for Johnson and she
was sorry she and Dick had ever allowed him to be their daughters godfather. He was an evil man who
killed his best friend, and she told Johnson she was going to kill him.
He thought about turning the note over to the Highway Patrol, but there was no way it could be traced.
She was doing nothing to hide her identity; just her location. Besides, he was starting to believe that his
drinking and cowardice had resulted in Dicks death. Johnson was responsible for Johnsons actions, so
therefore hed killed Dick Evans that day.
The tumultuous year of 1987 slipped away in a quiet Christmas and New Years celebration. As an
indication of the changes he was considering, for the first time in years, he went to church on Christmas
Eve.
 Chapter 42
Sonny Bono Got Elected to What?

Nineteen eighty-eight was giving signs it might be a good year. The first indication was that Dianne and
her friend Kim had decided to go skiing right after New Years, and it gave Johnson the opportunity to
spend time with the kids without her corrupting influence. He actually found them engaging. His son, for
all his sociopathy, was really smart and had a grasp of things far beyond his years. His daughter was a real
sweetheart sunny and cheerful, helpful and giving.
He called the time between getting home from the office and their bedtimes the childrens hour after
a famous poem. After the hour, in the deep quiet of the night, he had time to contemplate his future. He
needed downtime to refocus and to rebuild his internal reserves so he could do battle each day. Some of his
colleagues drank and partied; others seemed never to be down, depressed, or worried. Some had unhappy
home lives that showed up in the high divorce rate in the brokerage community. A few were relentless
sports hobbyists. They skied, golfed, played tennis or racquetball, ran, or lifted weights. Johnson suspected
that few got any relaxation from their sports, as they were all so competitive that there was no such thing
as a friendly game. It was killer sports all the time.
He played racquetball but was not good at the sport. He had developed a great serve and was pretty fast
and mobile, so he could cover the court well, but couldnt maintain the needed focus on the game. To excel
at a sport, a person has to concentrate on every aspect of the game all the time. Nothing is taken for granted.
The concentration also drove away other concerns and had a cleansing effect. Johnson couldnt develop
that level of concentration. It had been his biggest weakness as a pilot, and now in sports. He would be
doing well in a racquetball gameserves perfect, controlling the center of the courtand then some
random thought, association, or memory would pop up, and he would lose focus. He remembered Old
Haystack, as he called his instructor pilot at Fort Wolters, almost washing him out twice because of his
inability to focus.
They would be out flying, and Haystack would tell him to go into a hover. When a pilot hovers a
helicopter, he has to maintain complete coordination of the two pedals controlling the tail rotor, the
collective and cyclical pitches controlling forward and back and up and down, and his two eyes. If it all
came together, the helicopter would stop and hang motionless in the sky even though he continued to make
minute changes in the controls.
He would get it all perfect. He found it easier if he could find a point and stare at it, and the hover would
be perfect. Then he would start to worry or think about something that maybe he should be doing, or he
would stop staring at his point. Then there would be movement in some direction. He would correct and
might get it right. More likely, he overcorrected, the amplitude of the moves increased, and he would have
to abandon the hover.
He had the same problem in sports. He would be concentrating on his breathing when he ran or his
stroke in racquetball or his form in the fencing classes he took. He would be doing well, and then the random
thought would creep in. Did I call Jim to talk about the sale of his stock? Was I supposed to get something
at the store? What is my gross level for the month? They only flashed in his mind, but that was enough to
break the spell, and he would fail. When he failed, his self-image of perfection and his feeling that regardless
of ability, he should always strive for perfection in everything, led to a rising unhappiness with himself and
then to depression.
In the silence of the late 1980s nights, he could think well even though he went to bed early. He knew
he had to leave Bear Stearns. He knew that he wasnt going to go to Morgan Stanley, Goldman Sachs, or
one of those firms. He could go to a wire house. Merrill, Dean Witter, Shearson, Bache, and Paine Webber
had offices in Walnut Creek, right down the road.
So by the time Dianne arrived back from skiing and had dumped all the stories about how someone had
come on to her and how all the men wanted to be with her, of her skiing prowess, and of her dancing and
drinkingwhich were all bullshithe had sorted out a few of his options.
 In the end, he realized he was in the same position as a crab in a crab pot. He could get in but not out.
Again, he was brought back to the fact that all of his experience and all his training and learning qualified
him to be exactly one thing: a stockbroker. It was not a real career. It was a parasitic pursuitmaking
money off others by some connivance or trick. His college career had been just as useful; he took three
degrees: sociology, psychology, and history, all of which qualified him for nothing except being a teacher.
Occasionally, a broker would make the jump from sales to investment banking or to a company outside the
financial sector, but it was rare enough to qualify for news coverage.
He was left with two choices: go back to college and get a useful degree or to continue in the investment
business in some fashion. There were times that he scared himself; this was one of them. Why couldnt he
set himself up as an investment manager? Of course, he had no idea of how to do it, but in his ignorance,
he didnt feel that was a disqualifying item. Sometimes stupidity and innocence is an asset.
From that moment on, his life was different. He had new purpose. He chided himself that he had not
accomplished any of the goals he had held for himself on the brokerage side. He had finally been named
associate director, which was a junior partnership that meant nothing. It just took more room on his card.
Actually, it did give him something. Bear Stearns had a rule for all new directors. Each year, they were
required to give away 10 percent of their income. At the office annual meeting at the end of 1987, Ace
Greenberg had come from New York to address the troops. After he had named and congratulated all the
newly promoted, he talked for a few minutes about Bear and its family nature.
Bear Stearns was founded by some German Jews who left there in the 1920s. At that time, Jews on
Wall Street were relegated to working with the leftovers and the crap. Salomon, Goldman, Lehman, and
Kuhn, Loeb looked out for each other. We were the upstart and didnt have their protective shield. Since
the firm never had an abundance of capital, we had to take trades no one else would do. We had to move
merchandise fast because we had no capital, and none of the white-shoe banks were going to lend to us.
He paused to puff on his enormous cigar before continuing, The one thing we were expected to do, as
sort of a quid pro quo for getting business from the rest of Wall Street, was to donate to various charities.
The partners decided that Bear would make it a policy to donate ten percent of their income each year and
to make it universal. That way, no one could complain we were not doing our share. Ten percent was far
higher than what Morgan and White Weld contributed, and not everyone at those places contributed.
Over the years, there have been complaints about the imposition of the requirement, and the firm has
never selected a charity or charities that would get the money. It was each persons choice. So, those of you
who just made partner, in 1988, you will be expected to donate ten percent of your income to a charity of
your choice. The firm will help if you cant choose a charity. If youre Jewish, your money will go to the
Nazi Party, if you are black, to the KKK! You get the idea!
Johnson approached the decision to set up his own firm the way he did everything: thoroughly,
carefully, slowly, and thoughtfully. He first sought counsel from those he trusted in the business
(distressingly few) and in his social circle (again few, because he didnt want to alert Dianne). He talked to
a few investment managers he knew about what it was like. The reaction was universally positive. What
you were meant to do! You are too smart to be a broker. I will help you raise money. And finally,
from Donnelly: Can I have your accounts?
He dug into the business of investment management and was warming to the concept more and more.
He began to act as if he was an investment manager already. He studied every one of Warren Buffetts
annual letters from Berkshire Hathaway. He haunted the library and bookstores, reading Ben Grahams
Securities Analysis and The Intelligent Investor.
He had always been struck by the reality that if you ask people, they will give you all the help you need,
and that despite its many faults, it was particularly true of the investment industry. If you could get a
manager talking about him- or herself and let you ask questions, they would give you the world. Johnson
also found that talking to investment managers could be dangerous.
One of his clients, a fellow named Barry Saunders, ran the pension fund at his company. Barry was one
of the few clients Johnson had shared his decision with, both because Barry had been pointing out the
conflicts in Johnsons positionbecause Johnson respected the clients opinionand because Johnson
hoped Barry would be a client of his new firm.
 Sanders suggested that Johnson talk to the investment manager at T. Rowe Price who handled the
pension funds assets. T. Rowe Price had been one of the legends of Wall Street, and the mutual fund
company he had founded was immense and well respected. Johnson was ready for the tutelage of a real pro.
One morning, Johnson placed a call to the Baltimore headquarters of T. Rowe Price. After the operator
answered, he said, Good morning. Is Mr. Turnbull in?
Do you know what office he is in? was the reply.
I believe he is in your office, said Johnson, getting a bit frustrated.
Do you know what department he is in? We are very large firm with a lot of offices, and I am sure we
have a number of Turnbulls. The operator was now in a condescending mood.
All I know is that his name is Gregory Turnbull, he works for T. Rowe Price, and he manages a pension
fund for Ashland Paper in Los Angeles. Johnson fired this out quickly and with a dismissive tone that he
hoped would give him the upper hand. He started to curse himself silently because he should have asked
Barry for the guys direct phone number.
This resulted in a number of clicks, hums, squawks, and buzzes as the electronics all connected over
three thousand miles of wire or, more likely, through a couple of satellites. Finally, a female voice said,
Mr. Turnbulls phone. Flat, declaratory, no greeting or positive reinforcement.
Good morning. Johnson checked his watch to be sure with the three-hour time difference that it was
still morning in Baltimore. Is Mr. Turnbull in, please?
Yes, who may I say is calling?
My name is Phil Johnson with Bear Stearns in San Francisco, and I am calling at the suggestion of
Barry Saunders of Ashland Paper. As he said the words Bear Stearns, he could hear a stiffening of her
voice when she replied, the line of resistance hardening.
One moment, please.
He waited more than a moment, listening to the static. Greg Turnbull, came a voice with a snapping
tone to it that implied, I brook no bullshit.
Good morning, Mr. Turnbull. My name is Phil Johns That was all he got out as Turnbull overrode
him.
My assistant told me who you are, where you work, and who told you to call, so get on with it. The
arrogance was dripping from every syllable, and Johnson instantly started to get mad at this cavalier
treatment.
He bit his lip to hold back the urge to tell this guy to fuck off. I was talking to Barry about the
possibility of my leaving Bear Stearns to start my own investment management firm, and he said that you
could probably give me some pointers and inside advice. If you are busy, can we arrange a time to talk?
There was silence, and Johnson could hear the sounds of people in the background. The foreground
was filled with an exasperated intake and output of breath. Do you know who I am?
Yes; you are an investment manager at T. Rowe Price who manages the pension fund of a friends
company.
Wrong. I am a senior portfolio managerhe stressed the senior almost to the point of spitting it out
I work for the most prestigious investment firm in the United States, and your friends pension fund is a
peanut of the amount of money I manage. What makes you think you can just call me up? It was rhetorical.
Turnbull raced on. This is the middle of the trading day. I have huge decisions to make regarding the lives
and retirement of hundreds of thousands of people. I really dont have time to talk to every second-rate
broker from a second-rate firm with delusions of being an investment manager!
Mr. Saunders said began Johnson, only to be cut off again.
I graduated from Dartmouth and Harvard. I manage several hundred million dollars in independent
accounts and three mutual-fund portfolios, and all of them are number one in their class.
Wow, congratulations! replied Johnson, thinking that for all this guys shitty attitude, he might
actually be potentially helpful.
I dont have time for this kind of stuff. The next time you think you might want to call medont!
The line went dead.
 Despite the arrogance of people like Turnbull, he was getting good assistance in his plans. He worried
that two sources of input might stop him, however. The first was Dianne, if she found out. He had
deliberately made the decision not to trust her with his confidence. He made the decision out of the most
fundamental of reasons: he did not trust her, and he did not respect her opinion. If he told Dianne, the story
would be leaked and return to him and to who knew who else. He needed to keep the leak plugged.
His second problem with Dianne was her self-interest. She, like most people, made decisions based on
what she thought was best for her, but in Diannes case, it extended beyond the usual boundary. Dianne
would give advice from the standpoint of the honorable concerns of a mother: What will this do to our
income? What will be the change in lifestyle? What will the children think? and so on. This was all
obfuscation of the real issue: How will I, Dianne Johnson, be affected, and will I be able to continue to
live the way I want to? Because of her self-focus, if she found out there was any risk to her preferred
lifestyle, she would work against the idea, and eventually, she would win.
The other problematic source of input was Gary. It was usual in the industry, if an office manager found
out a broker was going to leave, to force him to leave before he was ready. The motivation was that if the
broker had less leisure to prepare, he would not be able to take as many accounts with him, and those that
remained would be used as rewards for the remaining faithful. Gary had a large and constantly hungry
family of sycophants, stool pigeons, flunkies, and worshippers to feed, and they needed feeding constantly.
While Johnsons book was not huge in terms of gross, it would certainly offer welcome additional income
to most of Garys inner circle, and the distribution would increase the recipients dependence on Gary.
Johnson, as usual, was worried about the wrong thing. From the first day in the new office, Gary and
his covey rarely came to the forty-first floor except to go to the dining room. The few all-office meetings
were held in the calling room on the fortieth, the only exception being the sales meeting, which was in the
dining room.
Gary couldnt have cared less about what was going on upstairs. All he wanted was for its denizens not
to cause him trouble or get him sued. It got so bad that he told his intimates that he was afraid to go to that
floor because Obersturmbannfhrer Johnson might put him in an oven, a remark that infuriated Johnson
almost to the point of physical violence.
It turned out that Gary was actually the least of Johnsons potential problems; Dianne actually became
one. By the late winter of 1988, Frumenti, the builder of their house, had run out of dodges, Johnsons
checkbook had held out, and a date was set for a trial. All of Frumentis various lawyers realized that going
to court would very expensive and that they would likely lose, as Johnson had, in addition to his own
attorney, the lawyer for USAA on his side. So an offer was proffered to settle.
Most initial settlement offers are low, and this one was ridiculous. Johnson immediately rejected it and
made a counterproposal. He carefully kept Dianne in the loop, but she was not really very interested and
gave him one of those dangerous phrases that entrap husbands: Do what you think is right. Of course,
that phraseology allowed her to criticize ex post facto if she found something wrong. He proposed that
Frumenti buy him out of the house at 110 percent of the highest house sale in the neighborhood, pay all
Johnsons legal and engineering costs, place a permanent warning on the title of the damage, and indemnify
Johnson for any claims arising from future sales of the house. Within a reasonable time, this offer, with
some minor modifications, was accepted, and Johnson, in his usual way, got concerned that it had been too
fast and too easy and maybe that hed gotten screwed.
When he brought the deal home, Dianne had a cow. The deal was sweet; they had bought the house for
$295,000 with only $25,000 down. Theyd carried a first and a second mortgage; the second was cancelled
when Frumentis brothers savings and loan was declared insolvent and the examiners found that Johnsons
second had illegally been sold. Therefore, in reality, they had $25,000 in equity, and they had sold the house
at the price of the appreciated houses in the neighborhood, which, with the 10 percent premium, gave them
a selling price of $475,000. It was a fabulous return on the investment and a staggering return on equity.
Yet Dianne was unhappy.
You let them off too easily, Phil! If you had consulted me, I would have told you it was not a good
deal, but noyou are the great financial genius, and I am just a wife. I am not dumb, Phil. Just because I
didnt go to college doesnt mean I dont understand things. I was going to be a broker when I met you.
 Well, we havent signed it yet. So tell me, why it is a bad deal? We are getting all the appreciation of
all the houses around, plus ten percent. We have all our expenses being reimbursed. All we had to do was
wait three years, and we havent lost any of the move in house prices. How is that a bad deal?
It just is. We are supposed to be a couple, we are supposed to make decisions together. You arent
here every day to take care of the house and kids; I am.
So what does that have to do with the deal? You still havent told me what is wrong with it.
I am not like you, Phil, with all your facts and figures. I just feel its not a good deal. You could have
gotten more, but its too late now. I will just have to struggle along.
Dianne, I asked you many times to sit down with me and look at the terms of the offer, but you told
me to do what is right, so I did.
See, there you go, blaming it on me! You never told me that, and if you did, you know I dont
remember things like you do. Having the kids and having to deal with them means I cant remember all the
facts, so you need to constantly remind me. Having to have two C-sections to have your kids taken a lot out
of me, and it affected my mind.
It was like all their arguments. It ended in nothing except recriminations, hurt feelings, and another
brick in their growing wall of resentment. He was so cynical now that he did not even try to make her feel
better. He manipulated her by telling her they would have to find another house. That got her money-
spending juices going, and suddenly she could remember every detail of every house she saw.
Having made the decision to leave Bear Stearns and the sell side of the industry, he was energized. He
felt he was in control. It was a goal for him to work toward, and goals were something he had drifted away
from in the last few years. It felt good to be in control. But Johnson was a classic worrier, and now he found
a way to recriminate himself for his decision. He was concerned that he might be perceived as a failure who
was running from not living up to the expectations others had for him. He asked himself, Am I just one of
those people who cant take something to a hundred percent? Was he one of those guys who was a 95
percentersomeone who took a project or idea only that far and never finished? Did he have completion
envy?
The year was progressing in a normal manner, with the usual sprinkling of scandal and skirmishes in
the growing culture wars. The Moslems in the Mideast were still kidnapping people, torturing and killing
them. They were still hijacking planes, and Saddam Hussein was still gassing people in the seemingly
endless war between Iran and Iraq. The Russians were continuing to lose their war in Afghanistan to the
American proxy, the Taliban.
In the wake of the rise in interest rates in 1987, the savings-and-loan industry was in major trouble.
These institutions had loans with low, fixed rates and were taking in deposits at high, short-term rates. The
junk-bond markets had created a displacement of normal thought with the dreams of avarice circling around
their new paradigm. The higher interest rates were destroying the value of bonds and increasing the number
of defaults, so banks assets were falling, and many were on the arms of insolvency.
In March, a huge Texas bank failed, setting one of those unfortunate negative records. It received the
largest bailout to date by the Federal Deposit Insurance Corporation. The pending problems of the banks
became an issue in the primaries that would select the next presidential candidates. Out of nowhere, the
Reverend Jesse Jackson beat the supposed front-runner, Michael Dukakis, in the Michigan primary,
indicating just how weird the Democrats were becoming.
The political situation got even stranger when the Arizona governor was impeached, convicted, and
removed from office. Johnson was bemused by the trial. He had spent enough time in Arizona to appreciate
that almost anything went in the state, so if Mecham had been convicted, he really had to be a bad guy.
Johnson commented to Barry Bellport that being convicted of a crime in Arizona was about as rare as David
Kavrell doing an honest trade.
If that wasnt enough, the good citizens of Palm Springs elected the male half of the Sonny-and-Cher
duo mayor. Sonny was the side of the act that did not prosper in show business after he and Cher broke up.
Cher was on to great things and wearing the most outrageous outfits possible. But Sonny Bono, mayor?
You got me, babe.
 The great insider-trading scandals of 1986 and 1987 were still percolating around Wall Street. There
had been a lot of procedural changes at the firms designed to reduce or prevent reoccurrence. Everyone was
still on edge because prosecutions were still being announced. One of the changes Bear Stearns made was
around the use of the restricted list. Every day, each brokerage firm published a list of stocks that were
restricted from trading. A restriction might stem from an analysts research report, but the real gems were
restrictions because of corporate-finance actions. If a company went on the list, it might be the target of a
takeover, and certain buyers would purchase the stock in anticipation.
In the early part of 1988, Johnson had started researching the Southern Pacific Railroad and he thought
the railroad was a tremendous investment. Johnson had learned about how to analyze a railroad from one
of the analysts at Morgan Stanley, and he thought he saw value in the So Pac, as it was called. The railroad
was considered the sick man of the industry, and its operating performance was terrible when compared to
the other rails. It was a fabled company, though, heir to the Central Pacific of transcontinental railroad fame,
the archetype of the greedy corporation in Frank Norriss book, The Octopus.
Johnson began to tear the company apart, looking at every financial report, calling around the country
to check on assets and routes. He found some books on the history of the railroad and tried to determine the
culture of the place. It was a time of consolidation in the rail industry, and he had already witnessed the
merger of four or five railroads in the past fifteen years. It was always the weakest that were taken over. In
his mind, this made So Pac a perfect target.
He was convinced that he had a winner. Even though he had spent a lot of time working on investment
banking deal in the last few years, he still had a stable of clients he could sell stock to and he started to buy
the stock for his clients. He convinced several other brokers in the office that it was good idea. At one point,
he had a conversation with one of Bear Stearnss analysts who followed special-situation stocks. Johnson
had accumulated a fair amount of the stock when, one day, he submitted an order, only to have it rejected
by the trading desk. He was told the stock was restricted. In the investment business, you never own enough
of the good stocks and always too much of the bad ones. He was cursing himself that he did not own enough,
and now something was going to happen.
A few days after he found out about the restriction, he noticed a big hubbub in the office, and eventually
the word filtered down to him that Kelly Trevethan, was in huge trouble. Apparently, when Kelly saw So
Pac go on the restricted list, he called a money manager who Gary no doubt had introduced him to, and told
him of the new restriction. The money manager was no dummy. He gave Kelly an order for 250,000 shares
valued in excess of three million. Then the manager wrote up a letter, faxed it to the SEC and to Ace
Greenberg, and waited for the secondary explosion.
In the letter, he outlined how he came to purchase the shares, naming Kelly and Bear Stearns. It was
like a bomb in crowded room. Jimmy Kayne, Ace Greenbergs heir apparent and no friend of Gary, called
Gary, demanding Kelly be fired. Gary was able to stiff-arm Kayne, but he could not resist a demand from
Ace. The SEC had inquired of Bear what it was going to do about this flagrant violation, and Bear did not
have a leg to stand on. Just about everyone in the office was praying for Kelly to get fired. But their prayers
werent answered.
The firm agreed to purchase the stock back from the manager, and since it had risen by then, the
manager made a profit. In fact, he had no risk in the trade because it was illegally communicated. He could
demand Bear buy it back at no loss regardless of the price or time. Kelly was shipped off to New York to
face the music, but apparently, Gary went to bat for him and Kelly was given a thirty-day suspension
without pay. The next anyone knew was that Kelly was in Hawaii as chaperone to Garys sons, at Garys
expense. One of the brokers commented that Kelly must give great blow jobs to skate free from so serious
an offense.
Johnson was not a particularly sensitive personor at least he portrayed himself that way. He was
noticing that there was an ebb and flow in things. It wasnt just business that was firmly cyclical, it was
success. There were times when he seemed to have a magic touch and everything fell into place and others
when he couldnt do anything right. He got very hyper during the up cycles and started to have delusions
of grandeur. He got very low during the down cyclesnot that he was very far away from permanent
depression at the best of times, but down times made it worse.
 When his life energy was being sucked away by a down cycle, defeatist thoughts captured his mind.
He would see everything as bad and always in the worst light. When challenged, he would defend himself
with the throwaway line that he was preparing for the worst and therefore, whatever happened would be
better. It was stupid, but he couldnt deal with the fact that he had a psychological weakness.
His depression was worsened by fatigue. If not tired by the long hours of attending to his job 4:00 a.m.
to 10:00 p.m. daily, it was by the constant need to be sharp when dealing with clients so he could pick up
the nuances of conversation and language. Although, to be sure, his emotional makeup didnt admit many
nuances. He had to be hit with a two-by-four before he realized something was happening. If it was not
having to be sharp all the time, it was dealing with the family and the demands they placed on him as a
husband and father. He had realized that the only consistency, and indeed, sanity, in the family was going
to come from him, if there was to be any at all.
Johnson never was willing to listen to himself and to the quiet voice that was telling him what was
really going on. He perhaps heard, but he didnt listen, because the voice couldnt have been right. If it was,
he was weak, and that would never do. All the reasons for his tiredness were symptoms of the larger disease.
He was bored. And boredoms handmaiden was restlessness. The disease was that Johnson hated what he
was doing and always had. After the shock of having to overcome the weakness of his introversion, he had
replaced fear with a romantic vision.
He had a romantic image of himself, Phillip Johnson. He was the person who would bring to the
downtrodden investor a new level of skill and expertise, of honesty and ethics, of concern and caring that
was lacking in the world of mountebanks, charlatans, crooks, fools, and worse that was the brokerage
industry. He was the knight to right the wrongs; his Dulcinea was his perception of good investment. In the
end, his imaginary beauty was as much a slut as the one Cervantes had created. He knew it was a false
hope; deep inside him, he knew it. But he kept after the windmills because it distracted from the fact that
he hated what he had to do to make a living.
The fount of most of the wisdom in his life, his mother, had a different take on his problem. He had
confided in her his concerns, which in itself was terrifying. She told him that he was like most people: he
did the things he liked very well, those he didnt like he did but not well, usually just enough to get by. But
he was unlike most people in that he tried to be a perfectionist in the things he liked and was depressed
when asked to demonstrate a skill that he was not good at. She told him that he wanted to be good at
everything. No, she corrected herself; not good. The best.
She also told him that he would have to fight boredom all his life because he would constantly find
himself bored. It was not that he was bored by nature; it was because he was smarter than most people. He
would learn a lot, and then he would become bored because he thought he knew everything.
She pointed out his obsession with the Civil War that had started in junior high school. He was almost
fanatic about reading books about it and visiting battlefields. He would see a cannon and pester the park
rangers to distraction about its range and how much powder it used. He had once embarrassed a docent in
Charleston by lecturing her on the particulars of the construction of the Dock Street Theater.
Johnsons mother told him that because he was smart, he would always look for more information and
for something to stimulate him. This was hard news for Johnson. He felt that being aware of his smarts was
somehow arrogant. He did not think of himself as smart or good-looking or having any really pleasing
physical or mental attributes.
If his mother was right, his disharmony at Bear was due to two things. One was that he had mastered
the intellectual side of the business and since sales often were anti-intellectually driven, he could never
parlay that mastery into top-level performance. The second, even though he was dishonest with himself by
not admitting it, was that his smarts made him unwilling to suffer fools lightly, if at all, and since the
investment industry, to a shocking extent, was populated by fools, he would be constantly unhappy.
The real reason for his unhappiness, he concluded after his mothers lecture was, that by setting up his
own investment management firm he would be able to control his environment which he was never going
to do working at Bear Stearns. He also had one of his romantic notions, unsupported by fact as usual, that
on the real Wall Street, the real investment professionals were independent or on the buy side, in street
parlance. Johnson processed all the input he had gotten from his colleagues and his mother and came to the
wrong conclusionthat somehow, if he were independent, his intellectual restlessness would be an asset,
not a liability. He demonstrated that bad decisions can be made from good information and that good
decisions can come from bad or incomplete information. His decision was incorrect, but he had made it.
Now that he had finally made the decision, he started to seriously plan. He had a number of huge
decisions to make. He to get the guts of the new firm in place. He had developed a huge Rolodex of contacts,
and now he dipped into it. He made a call to a lawyer he knew who was the brother of a girl he had gone to
high school with. Bob Mattson was a partner with a big San Francisco-based firm that was very prominent
in the realm of corporate law. Bob referred him to another partner who was the leader of the firms securities
practice. Johnson made an appointment to see the lawyer.
It turned out that all of Johnsons worries were, as usual, unfounded. Setting up as an investment advisor
was simple; the only complication was that while there was a federal registration with SEC, each state had
its own requirements (some of which were bizarre). The lawyer quickly dissuaded him from the idea of
being a broker-dealer as well as a money manager. It was not the requirement to maintain a capital account
with the state or the more difficult registration; it was an intangible that was the issue.
In explaining why he should not be a broker-dealer the lawyer gave him a lecture that he would never
forget. In a long dissertation that brooked no interruptions, Cary Kassman explained a concept that would
validate Johnsons thinking and go a long way to explain his discomfort as a broker. Phil, are you familiar
with the concept of fiduciary responsibility?
In the investment industry there are two major standards of care, suitability and fiduciary. Brokerage
firms all worked on the suitability standard that basically said that if the investment was suitable for the
client at the time it was sold to him that was all that was required. It was a low bar and porous, a lot of evil
stuff could be fobbed off as suitable. The other standard was the fiduciary standard of care and that was
what Cary was referring to.
Johnson had heard the word, but he was not intimate with it. He knew the broad strokes. But he was
paying this guy $250 an hour, and money overcame his normal motivation to show how much he knew. So
he said, I have heard the word, but I am not really familiar with the concepts.
The word fiduciary is derived, as a lot of our words are, from a Latin word. It is rooted in fiducia, or
trust. It came into general English usage in the late sixteenth century along with the rise of financial
transactions. Its meaning was something inspiring trust. A person who is a fiduciary is in a trust
relationship with another person. OK?
Sure.
OK. Since it is a trust relationship, we should talk about what trust means in a financial sense. When
a person is appointed a trustee for another person in the legal sense they, the trustee, hold legal title to
property for anothers benefit. In the financial or investment world, it is very rare for a person to be a trustee,
but the relationship between a client and their broker or investment manager is one of the client trusting the
broker or manager to do the right thing. Johnson knew some of this but had never heard it expressed this
well. Cary continued. The duties of a fiduciary imply the highest standard of care at either equity or in
law. It is an awesome responsibility. Cary paused a second before launching onward.
So, whether you know it or not, as a Bear Stearns broker, you are in the position of being a trusted
advisor to your clients. They are considered the vulnerable party, meaning that you are considered to be in
a superior position and in possession of greater skill and knowledge.
Boy, to make that assumption about some of the brokers I know is really a stretch. Most of those guys
are just idiots who can sell! came Johnsons reply.
I would agree, but I would not be so harsh about it, was Carys response.
Spoken like a true lawyer.
Being noncommittal is sort of beaten into us at law school. He waited for the irony of his remark to
settle in. The real issue is that brokers really cant be fiduciaries because they cannot discharge one of the
key aspects of a trust relationship: the undivided duty of loyalty. He paused for a second to let that sink in
too, but getting the vacuous look of a listener not fully on board, he continued. Brokers, who are
compensated by commission, live lives full of conflicts of interest between their duty to their firms and
duty to the client. Commissions immediately put a tension between the customer and the broker.
 So, in effect, the broker, to be paid, must be an adversary rather than an advocate, interjected Johnson.
Excellent, Cary replied, making a note. Great way to put it. I will use that. So, yeseven if they
were not compensated by commission, there would still be a conflict because brokerage houses dont have
to reveal that they are selling the client stocks that they hold in their own account, and they create and sell
their own products, which they pay their brokers premium fees to sell.
Johnson nodded.
When a broker engages in any of those activities, he is in conflict with his clients best interest. There
is another duty of a fiduciaryevery action of a fiduciary has to be in the clients best interest, while a
broker only has to defend an action as suitable for the client. He paused then continued. A broker has
only to decide that at the time of the sale, the investment was suitable for the client, and usually that is
determined by the fact that the firm is recommending it or making a market. It is a very squishy term, to
use the technical legalese, he said, smiling.
The best interest of the client is also rather undefined, as I read it, said Johnson.
True, but in legal terms and in case law, there are more specific descriptions of what is and what is not
the best interest, and, most importantly, there is a basis for determining best interestthe history of trust
relationships. Suitability, on the other hand, is a term largely created by the brokerage industry to provide
cover for its activities, and whether an action was suitable is determined case by case, not by general
principle.
So, if being compensated by commission automatically disqualifies a broker from being a fiduciary,
why cant a broker just charge a fee and eliminate the conflict? Johnson was warming to this discussion.
He often wondered if his true calling might have been the law. He had enjoyed his time trying court-martials
for the army, and he had grasped the basic tenets of Indian law quickly. He did not understand all the
nuances and theories of law, but he thought he had an understanding, and he found the law magisterial.
Ah, interesting, said Cary. There really is no reason a broker cant charge a fee as long as the fee
does not exceed what a client would pay in commissions. The problem is not the fee; for the firms, it is the
compliance issue. This was starting to strike home for Johnson remembering the reaction at Bear Stearns
when he asked if he could charge a fee. You see, Phil, Cary continued in his professorial way, under
current law, if a brokerthat is, an individual broker as opposed to the firmcharges a fee, the regulators
will define him as a fiduciary, and his actions will be subject to the higher level of care than if he charges
commissions. The firms are not willing to place themselves at that risk for the very reason you cited
earliermost of their brokers are glorified car salesmen with no understanding of the duties implied by
fiduciary status.
So if I can safely make a conclusion from this, it is that you think I should not establish my firm as a
broker-dealer but as a fee-only money manager?
Yes. To be pure to the nature of investment management, you need to avoid conflicts of interest. This
is one that you can easily avoid, and it will make things simpler in the future. One of the issues I see all the
time with brokers is the effect of the cyclical nature of commissions and what happens with the race to
make your nut each month. About half the cases of churning result from brokers pushing too hard to make
commissions. If you only charge a fee, you will get steady cash flows, and in my opinion, you will find the
motivation to do things for your benefit and not the clients much reduced.
For Johnson, the world opened up. He had found the way to get out of the conflict between his duty to
the clients, the duty to the firm, and duty to himself. To be a fee-only manager, to be a fiduciary, was to be
on the moral high ground, a quality he attributed to himself. He was the one who would bring high standards
of conduct to the others; it was a mission. At that moment, he made the final decision to leave Bear as soon
as possible and go independent. He told Cary that he was ready to go and authorized him to draw up the
proper forms to get registered and the contracts for the clients. He could not solicit clients for his new firm
until he left Bear and had been granted registration, but he would take care of the details and be ready to hit
the ground runningor at least jogging.
So, the decision was made. Now he had to find a way to tell Dianne and the children, figure out where
he would locate the firm, and how to finance the thing. None of these tasks were easy, and the most difficult
would be telling Dianne. This was the first time he had made a really big decision that affected in the family
without talking to her. Not that those previous discussions were any shield from later criticism; he had just
felt it was the right thing to do. In most of those cases, her desires were what eventually triumphed, but with
this decision, his desire was the motivation, and that was going to be hard for her to take.
The year moved toward a close. The presidential election was held and George Bush and Dan Quayle
soundly defeated the whimpering pantywaists Dukakis and Benson. Bush thus became the first sitting vice-
president to succeed his president by election since Martin Van Buren. The markets continued to move
higher but without the rush of 1987.
He started to make plans to thwart the Ghost. He went to the Lafayette police to alert them, and he was
almost laughed out of the place. She usually did not commit any crimes that were punishable, and the cops
were not going to put a protective detail around him. She always seemed to know what he was doing at
Christmas, which meant she had an information source, so he moved to close those down. He swore Dianne
and the kids to secrecy. They should tell no one what the family plans were for the holiday. He also planted
misinformation at the office regarding his schedule, trying to deflect her. But like most psychopaths, she
was unpredictable, and this year instead of showing up or calling, she sent a letter with a picture of herself,
Dick, and Johnson in happier times during their flight school days in Texas. The letter was a masterpiece
of vitriol. It was irrational, unstructured, and grammatically miserable, but nonetheless, for a guy suffering
survivor guilt, very upsetting. Another Christmas ruined.
 Chapter 43
Good-Bye and Good Luck
One of the lessons of the philosophers Phil Johnson did not learn: he engaged in moralizing. He was often
aggressive in what he said. He was often asked for his opinion; sometimes it was for honest reasons, but
mostly it was because the requester wanted to start some excitement. He gave his opinion forcefully, loudly
when in his cups, and it rarely brooked any response. When he was discoursing, he was convinced his
opinion adequately integrated all possible points of view and information and was therefore definitive. His
willingness to be forceful had the opposite effect of his desire to leave people alone and to be left alone. He
was asked often for reasons not related to the correctness or value of his opinion, but rather for the
amusement factor.
Johnson could be arrogant in his self-appointed superior position. The environmental activists, the gays,
the feminists, and other denizens of the left reflected their own self-awarded superiority in what Johnson
sometimes described as the smile of some melodious voiced flower-power, free-love, kumbaya, wire-
rimmed-spectacled, Birkenstock-wearing self-satisfied fool. Mostly, he just held himself differently and
became even more insufferable as the number of fools who didnt recognize his superiority seemed to
increase.
He was there now. His decision to become independent and a fiduciaryin his mind, at leastplaced
him on a moral high ground. With the danger of a laymans imperfect understanding of legal concepts, he
began to judge every action of himself and his fellows with the prism of fiduciary responsibility. He thought
he now had the right to be judgmental in the extreme. He was also in one of his most aggravating modes,
as far as Dianne was concerned. He had a secret, and he was going to keep it from her prying eyes, ears,
and fingers.
He now carried two briefcasesone that carried stuff from work that he never looked at despite solemn
promises to himself, and another containing paperwork and notes about setting up an investment-
management company. He had replaced his BMW with a VW Jetta in which the family rarely rode, so that
was where he kept his secret stash of documents. It is said that a good liar must have a great memory, and
Johnson did, so the lies he told Dianne and others to cover up his actions and meetings came easily. He was
aided by the fact that Dianne had a hard time remembering her own name without reading her drivers
license and that most of the people in the office cared too much about themselves to care about him.
He had several decisions to make in this move toward his future. One was where to establish the firm.
It would be easier to do it in the Bay Area, but two factors made that problematic. First, it would be more
expensive, since the cost of doing business was higher there. Second, he realized that so long as he stayed
in the Bay Area, he had a fallback option, a line of retreat. He could always quit and use a contact or two
to get a job at a brokerage house again or take the dreaded marketing job. He came to understand that unless
he was over the fiery pit of destruction, he would not fully dedicate himself. He addressed these fears with
the solution to put himself at complete risk. Otherwise, his innate caution would overcome him.
He wondered, though, if he was being totally selfish. Was it selfish to pursue a goal that primarily
benefitted him, or should he try to get consensus first? If he was right in what he was doing, the benefits
would flow to the family as well, but if he failed, the costs would be terrible. Was he justified in keeping
all his preparations secret, or was that his right as the sole breadwinner of the family? In all this wondering
about ethics, he knew one thing: he would never get Diannes approval or endorsement if she felt the
decision affected what she believed were her rightful perquisites.
As far as the kids went, they would have to adjust, just as he and his brother had with their fathers
moves during his military career. If he could adjust, they could. That rationalization, of course, ignored the
fact that he had had his strong mother to cushion some of the blows. His kids had Dianne, who was only
strong when she felt it was in her best interest.
His moral superiority got him in trouble, because he could not simply keep the secret of his decision.
No; he had to give voice to his position. He condemned the brokerage industry to the hell of low moral
standards and openly said so. There was the time Bear Stearns got into a deal to sell a warrant on the
Japanese Yen. Johnson was not a currency expert, but he recognized the basic flaw in the product. The
client was being sold a warrant that would only gain value if the Yen was above a certain level five years
in the future, but the current price of the warrant was determined by the spot price.
The spot price would react quickly to world events and changes in the collective insanity that was the
Japanese financial markets. Any purchasers of the warrant were giving the provider of the security, Bear
Stearns, the ability to make money from this very volatility but denying themselves the same opportunity.
He set his cap against the product. His disdain was heightened by the fact that two of the sleaziest brokers
in the office, David Kavrell and Danny Weiner, were pushing this on all the new brokers in the calling
rooms.
He steamed up and down the halls of Bear Stearns, telling any and all what a pile of crap this thing was.
He lectured and pounded on people who were incapable of understanding the nuances of what he was saying
and became abusive when he found them lacking. He was like Jeremiah warning of the risks of the future.
In the end, the deal was done, and successful for a while. He was a made a joke.
It is harder to keep a secret in a brokerage house than it is in anyplace else in the world. Everyone is
looking for an angle, and managers live in fear that there could be a general exodus to some other firm. The
raiding of offices was a normal practice, and with firms going out of business or merging so often these
days, brokers were in constant flux. Although the brokers never really turned this to their advantage, they
had suddenly become valuable.
The bull market, which had started in 1982, either coincided with or led the recovering economy,
depending on whom you talked to. The fall of inflation and the slowly declining interest rates were fueling
capital investments, and capital investments meant securities to be sold. The firms were waxing fat on fees
for mergers, acquisitions, and underwriting. While some of the securities could be sold to institutions, most
of the companies wanted to have a portion of their securities, especially stock, in the hands of the public,
or retail, as it was called. To achieve that, the industry needed brokers, and the best brokers were those who
had established books and could move stocks out the door.
The former managing director in the San Francisco office, Marshall Geller, had had a motto that yelling
was cool, and, therefore, yelling real loud was even cooler. He was a great salesman and had done well
when Bear was still a partnership. After the company went public in 1985, he and his second wife, Bobbie,
got a divorce. Bobbie was a former Las Vegas showgirl and a danger to men: when she walked down the
street, car accidents happened. In a lot of cases, brains and boobs are inversely correlated, but not with
Bobbie. She got herself a real pit-bull lawyer who whipped Marshall like a red-headed stepchild. In the end,
she got half of his stock in Bear, enough that the board had to deal with herwhich they did by buying her
out.
Marshall had ended up with a firm called Gruntal, which to Johnson sounded like someone taking a
shit. He immediately began to raid the San Francisco Bear Stearns office for brokers, dangling huge
commission payouts and signing bonuses. Gary was vulnerable to the raid because he was intimidated by
Marshall and because he had created a whole raft of money-hungry vultures whose allegiance was not truly
to him but to the money they could earn. These had forgotten, though, that they only made good gross
because of Garys patronage; most were just house painters.
Dave Mead left to join Gruntal, and Johnson knew it would be only a matter of days before he called
to get Johnson over for an interview. Mead was dangerous because he was smart. Johnson respected him,
and he knew of the secret decision Johnson had made. Sure enough, the call came. Johnson protested to
Mead that he had made his decision, and going to another brokerage house was not part of the plan. Mead
replied that he thought Johnson should keep all his options open and that an interview would only present
a different perspective. Besides, Mead said, Gruntal was paying big up-front bonuses, and if he took a place
there, he could just work for a couple of years and leave. The money would make the transition easier.
Johnson didnt want to go, but he did. This was to some extent because Mead had always been nice to
him, and he didnt want to hurt Daves feelings. Johnson didnt know Marshall Geller at all, and his
reputation was a bit scary. The interview went back and forth. Johnson was not a good interviewee, and
Marshall seemed to know a lot about Johnson and Johnsons business, which was disconcerting. But, during
the interview, he had the highest compliment he was ever to receive paid to him.
 Gruntal had hired a guy who had been at Morgan Stanley but left to go to another firm and then to
Gruntal. He was at the interview. Marshall, the other fellow said, I knew Phil at Morgan Stanley, and
this is a guy who would rather miss his mortgage payment than do a bad trade for a client. In the end,
though, it didnt work, partly because Johnson didnt want it to work and his answers were not as eager as
they might have been. He did nothing outright to kill the interview; he just did nothing to advance it. The
other reason it didnt work was that Marshall was looking for guys with big production from stocks and
bonds, and Johnsons business in those areas was mediocre. His income in the last few years had come
from Indian deals, and Gruntal couldnt and wouldnt support that type of business. Johnson left feeling
tired, frustrated, and unwanted.
In the next few weeks, he watched a stream of brokers leave for Gruntal, and the word filtered back of
the money they had received to do it. Johnson cursed himself for not tending to his knitting and developing
more trading business. The scent of money and the thought of not having to work so hard for every dollar
of income brought forth jealousy. He was jealous of lesser humans, who, unburdened by his code of ethics
and client care, were being rewarded for behaviors that, in his opinion, were probably actionable in court.
He had never been part of the in crowd, and here he was, seventeen years into a career and on the outs
again. His depression started to creep up, and slowly it overtook him. He spiraled down and down, and he
started drinking. He started to stay away from home on one pretext or another, mostly to sit in bars, feeling
sorry for himself. Donnelly, his former office mate, Mead, and all the others he cared about left, and Phil
had to put up with the dregs of Garys zoo.
The root of it all was fatigue. He was tired of the industry, and the battles at Morgan and beyond had
taken more out of him than he knew (or, if he knew, would ever admit). The pressures at Bear Stearns were
bad enough, but he made everything worse by his mission to reform the unwashed, as he saw them. He was
taking on the weight of the world again. At the same time, his machismo was working. He couldnt or
wouldnt admit that like a normal human, he needed to take time off to clear the cobwebs. No, he was
different. And he was killing himself physically and mentally. The result was that the decision he had made
to pursue his goal and lofty idea, one that had briefly empowered him, slipped from the immediate to the
subordinate.
Dianne, to her credit, either from the sense that her meal ticket might go away or, less believably,
because she really cared, reacted in surprising ways. She stopped making demands on him and let him take
the initiative in sex. She tried to keep the kids and their school problems away from him. She left him pretty
much alone. Johnson, in these moods, was like an airplane that has stopped flying. It will descend until the
force of the wind creates lift or the pilot regains the control, and then, if it is structurally sound, it will fly
again.
Gradually, Dianne introduced reminders of his worth, his struggles, and his duty. She reminded him
that he had survived wounds that would have killed most men that he had started in the brokerage with no
training and had created a good life for them. She told him that many, many people looked up to him and
respected him but were not ready to say so. Her comments, which in his bloody-mindedness he wrote off
as clich, became the changed airflow on his wings unconsciously. His sense of duty returned first: duty to
his family and to his clients. Then his sense of equilibrium returned. He decided that the guys who had gone
to Gruntal were disloyal, and there was little that irritated Johnson more than disloyalty. Even crazy people
can occasionally have lucid thoughts.
It took about two weeks, but he started out of the spiral. However, as always, he felt rotten because he
had once again lost control of himself and given in to weakness. Strangely, his finding fault with himself
as weak and out of control was a motivator, not a depressant, and anger flooded him. Ill show them!
Those disloyal assholes. Most of them will be out of business in a year, as will their firm. How can any firm
pay that much for brokers and expect to survive?
He regained focus on what he had been planning to do, and in recognition of Diannes succor, he told
her what it was. She, of course, was stunned and unhappy that he had kept her in the dark. He conceded
that she had a point, but he was firm about his decision and was not backing out of it. She stewed on that a
bit, throwing up the shock to the kids, but he held. He did, however, agree to just think about the move for
a month.
 In was April, and he was busy with taxes and the tax issues of clients. Dianne knew this but badgered
him with questions: What about the kids? What about their friends? Would they have to sell the house?
How long would it be before his income returned? How would they live in the meantime? The questions
were not designed so much to get information as to harass him into a distracted state with the hope of
finding a chink in the armor of his decision. These were all fair questions, though, and Johnson admitted to
himself that he had never answered them. He had just made the decision and expected everything else to
follow.
At the end of the month, he had answers. OK, Dianne, Ive taken a month to consider it, and Im still
going independent. On July first, Im leaving Bear Stearns. Due to the nature of my Indian practice, I need
to have the firm in the Seattle area. As far as the kids go, there is no good or bad time, so theyre just going
to have to adjust, like I had to. You will have to sell the house and find someplace to live in Seattle.
He expected that after his month of cooling off, she would respect the decision, but of course, Dianne
had hoped he would back down on it altogether. Since he was not doing as she had expected, she stepped
up her efforts to change his mind.
He knew he had to be tough to the point of callousness. She was going to toss up all the stuff that tugs
on emotions. He knew that if he didnt do this now, he never would. Dianne was concerned with her and
the childrens well-being, and in Diannes case, it was compounded by fear of the unknown. Phil had the
same fear, but fear was an old companion to him, and he knew that while most fear was misplaced, real
fear, for him, could be an adventure.
She was now uncertain. She had really hoped that during the month of contemplation, he would see the
error of his ways and decide to stay at Bear Stearns or at least in the Bay Area. When she was confronted
with his adamance, all of her helpful characteristics vanished. She tugged, pushed, and pulled at his most
sensitive emotional threads, his sense of duty and commitment. She pouted, sulked, withdrew, and made
sarcastic comments. She enlisted the aid of several of their friends. She even tried to withhold sex, but her
hormones defeated her. He held firm, and not without anger.
One night, after a particularly long bitch session punctuated with tears and threats, he reached the trigger
point. You asked me to consider the move for a month, and I did. Ive discussed this endlessly with you
already. I have made up my mind. Im moving to Seattle to start my own investment firm, and Im quitting
Bear Stearns July first. You can either lead, follow, or get the hell out of the way. Any of those are fine.
But Im moving.
Dianne was clearly stunned. If she didnt go along, the result would be separation, or, in the extreme,
divorce. Both were anathema to her. In fact, Phil had shocked himself as wellbecause in all the years of
their marriage, he had never given her an ultimatum. He had always believed that unilateral decisions had
no place in bilateral relationships. If she didnt agree, the marriage was over. Or, he would have to back
down to stay with her, and she would win the power struggle. He instantly started to get a cold sweat under
his arms. Would he really carry it out? He had made his decision. He knew in his heart that if she answered
wrong, he was going to go ahead with his plans. She came around, or she was gone.
There was a pregnant moment when all hung in the balance. Would she agree? Would she start to cry?
Would she tell him not to let the door hit him in the ass on the way out? He had an imagined scenario of
how all this was supposed to go, and now, like any plan, it was destroyed in the face of the facts. He stood
there in front of her, waiting, and she looked at him with eyes that at once revealed displeasure, fury, and a
good deal of fear.
In most marriages where the woman isnt the primary earner, she loses any power struggle. Women are
motivated by different thingsusually less by ego than by a desire for security. In this case, he had
calculated that if Dianne saw the advantage of living in Seattle and that the move would make him happier,
she would agree to it to preserve the marriage. He was engaged, truthfully, in a terrible manipulation of his
wife for his own benefit. But strangely, he felt no guilt, just a bit of fear.
The next day, she agreed.
Now, the process got underway. There was a house to be soldthe one they had moved to in Lafayette
after the settlement of their lawsuitit would sell quickly. Then there was a house in Seattle to buy and the
kids to tell and a million other things. He had to start the process of telling some of his clients and of getting
a lawyer in Seattle to handle his registration. He had to be quiet in the office until he was ready to tell Gary.
Hed determined that he would do the gentlemanly thing and tell Gary directly, not because he liked or
respected him, but simply that he didnt want to be one of those guys who just slipped away in the night
like a thief.
The next few months were a panic of decisions, choices, and research. It was a time of trying to ease
the children into the move. His daughter was not a problem. She was concerned about leaving her friends,
but she was a sunny personality and would replace them easily. He expected no trouble with her. His son
was a different matter. The kid hated change. He had overcome some of the issues he had experienced
earlier, in some part because Dianne had put him on Ritalin over Phils objections. Johnson knew there was
trouble coming. He found out that his son had been inin fact, starteda fight at school, which he lost.
The humiliation of losing was crushing, and Dean wanted to move immediately.
By the end of May, they had sold the house in Lafayette and Dianne had flown to Seattle one weekend
to ride around with a real-estate agent. He had copied all his account books and had quietly started to take
his personal possessions home, knowing that if Gary found out, he would be fired. He realized that he had
to act quickly when one of the other guys in the office who lived in a nearby town asked if he had his house
on the market. If one person in a brokerage knows something, eventually, everyone knows it.
In the second week of June, he approached Garys assistant Pat. Pat, I need to talk to Gary about
something in private. Is he in?
Pat replied that Gary was in but had to leave that afternoon for a partners meeting in New York; he
would be back by Monday. She then stuck her head into Garys office and told him that Phil wanted a
private meeting. Phil heard Gary tell her that Monday was good and that they should have lunch.
Johnson, as was his habit, got very worried. It was always better for him if he didnt have a lot of time
to think about things. When he did, he ended up focusing on the negatives, and it could often trigger a
depressive episode. Hed never done things this way before; all his other departures had been rushed affairs
out of his control. Hed been mean to and about Gary, and it was obvious to everyone that Johnson didnt
respect him. It truth, there was some basis to his feeling that Gary didnt like him, but Gary was a salesman
extraordinaire, and those types of people do not bear grudges for longthey tend to get in the way of sales.
Most of Johnsons concerns were in his own mind. He just couldnt accept that there might be a bright side
to the meeting.
When Monday noon came, Johnson was in a state of high panic. Hed been in the bathroom about six
times already, and his stomach was in knots. He had dressed with care that morning, and hed driven to San
Francisco instead of taking BART so hed have a handy method of egress if he had to leave suddenly. He
entered Garys office and found the small conference table spread with plates, glasses, and silverware.
Johnson had expected sandwiches and canned drinks.
They sat and talked for a few minutes as Johnson picked over his salad. He wasnt really hungry.
Actually, he was, but he was so unsure of his stomach that he feared eating. Gary was very gracious and
asked about Johnsons family and if they had settled the lawsuit on the house. Johnson, for his part, was
actually engaging, and he surprised himself by returning Garys grace with questions about his new
marriage and his sons. Johnson carefully avoided any reference to golf, as it would have inspired long
stories, and he wasnt ready for that. It was a convivial time.
As they changed courses, they changed topics. Has Marshall called you about joining Gruntal? Gary
asked.
Phil wasnt going to lie, which would have been a natural response for most brokers. For once, there
was actually no advantage to lying. Yes, he had Mead call me, and I didnt want to talk to them. But I
owed it to Mead, so I went over a month ago.
Its always hard for me to understand why Marshall decided to raid this office so aggressively, and
even more, I cant understand why so many guys left. Phil knew this was disingenuous. Gary and Marshall
were adversaries, Marshall knew the brokers in the office well, and most of them liked Marshall better than
Gary.
I dont know Marshall at all, said Phil, but theyre tossing around some pretty big numbers both in
up-front and in payout. Thats probably the big attraction.
 What did he offer you?
Nothing. He doesnt want me. He wants the stock jockeys and the big securities commission guys,
especially the big traders. Most of my income in the last few years has been from selling munis to insurance
companies and the Indian stuff. Gruntal has no muni department and wouldnt know an Indian from a
duck.
Those guys who left are getting a big surprise right about now, said Gary. You know, Gruntal is
making them sign a note for the upfront money. Its structured as a loan with part of it forgiven each year,
but if they leave before its due, they have to pay it back! That firm isnt that strong financially. They cant
pay that kind of upfront money and those high payouts for long. A lot of those guys will be looking for a
new seat pretty soon. Marshalls not a builder.
Well, Im not going to Gruntal.
But youre leaving, right?
Damn, thought Johnson, he knows or he suspects, and I cant lie. Im glad I brought the car in. Im
going to be out of here before the market closes. Yes, Im leaving, Gary. Thats why I wanted to talk to
you. Johnson fixed Gary with his eyes. I have four business goals in my life. I want to manage money,
Id like to be the CEO of a real manufacturing firm, Id like to do something to better the lives of Native
Americans, and Id like to run a brokerage firm. In the last couple of years, Ive had a flirtation with the
Native American goal, as I was briefly considered for a position in the BIA. I finally decided that what
would be right for me at this time would be to establish my own money-management firm. I have done the
research, I have started the process, and I plan to leave July first.
There, it was out. It had been said, and it was done. All that was left was the reaction.
Gary was thoughtful for a moment. I have known for a while that you have been unhappy here. This
is a firm whose heritage is trading, and youre not a trader. Youre not a salesman either. You can do it, but
its not in your blood. You really are better cut out to be a money manager. I thought you might go to
Gruntal to get the money, but I told Pat that whatever you did, you would do it right and not just sneak off
in the night. I know you are making the right decision for yourself, and I think you need to follow your
dream.
Johnson was floored. This was not what he had expected. It was gracious beyond belief from a man
who seemed to have the manners of a goat. All of Johnsons worry, fears, and concern had been for nothing.
He had almost let fear be his master, and that would have been a big mistake.
They shook hands, and Gary wished him well. As Johnson left the office, Pat and Rachel were there,
and they both gave him hugs and told him how much they would miss him. He was cynical enough to know
that all the goodwill was bogus and that, like all brokers who leave an office, in a few months, he would be
forgotten. Or, if he was remembered, it would be for his last bad act and not his good intentions but he
didnt care he was on the road to the bright uplands of his future.