Third Installment


Back in his room after the afternoon’s appointments, Brian tried to relax. He pulled up the hotel’s network on his laptop and logged on to Grounders, a blog about baseball written by Billy Featherstone,  young Native American and recent Princeton graduate who was trying to make it to the big leagues. He was currently playing for the Asheville Tourists in the Class A Sally League, one of the lowest levels of the minor leagues.  Brian liked the unpredictable topics Billy wrote about. 


Well, sportsfansit’s almost time for spring training. Last season, my  first season in the minors, I hit .275, respectable, but I will have to hit higher to make it to the show. These pitchers are better than the ones in the Ivy League. Everyone on the team is 20 - 23 years old, but some skipped college and have already put in two or three years in the minors. It’s strange. Some guys realize in the first year that they aren’t going to make it. They give up and move on to something else. Others are convinced that they will improve, even if they don’t do well in their first year or two. 


 In case you are not an expert on minor league baseball, the Tourists are a farm team for the Colorado Rockies.  The Rockies have some patience for young players to develop, but new players get drafted every year, so if you are not moving up, eventually you will be moved out.  Your contract will not be renewed. You can try to catch on with another team, maybe an independent league where the teams are not part of a major league team’s farm system. Some guys have turned it around after being released, but it’s rare. 


My fielding at second base was good. I’ve always been a good fielder. But since I don’t have a lot of power, I know I have to hit for a high average. I do have speed; I stole 40 bases this year in 120 games, pretty good. And I am still learning how to read pitchers. I know it will get much harder as I move up. You try to identify your strengths and learn to use them.  


Since Asheville is close to Cherokee, North Carolina, a lot of people assume I’m a Cherokee. Sometimes at opponents’ stadiums I hear drunk fans yelling things sat me.  “Redskin! Go back to the reservation!” Other stuff. Actually, I’m a Wicocomico. My people lived in northern Virginia, along the Rappahannock River. They were allied with the Powhatan tribe that you may have heard of.  Pocahontas and that John Smith bullshit.  One day this season some Cherokees came over the mountain to watch me play. I had to explain to them that I’m not a Cherokee, but they said they would cheer for me anyway. 


I saw a painting in a book that shows some Wicocomicos playing a “ball game” in a field. The tribe assimilated pretty quickly into the English population in the 17th century. Those that didn’t were quickly wiped out or driven out. Like the Cherokees were, more or less. My father is full-blooded Wicocomico. He’s an assistant high school football coach in Front Royal, Virginia. My mother is half-white and half-Indian. She makes a little money as a piano teacher.  My girl friend in college, let’s call her Miriam, is half black, and half Jewish. Her father was a radical history professor at Swarthmore; her mother was a jazz singein clubs around Philly and JerseySeems like everything is just melting together. We have some bi-racial guys on our team, and a lot of the guys on the team have dated girls from other races. Some people have a problem with that, but there is nothing they can do about it. The old world is fading away, and it’s not coming back. 


Miriam works in Washington D.C.  She’s a researcher at … one of the federal offices. We play the Delmarva Shorebirds in Salisbury, Maryland two or three times a year, and she usually can come to a few games. After the season ended last September, I went up and stayed with her for a while. But I have to earn some money, since they pay us hardly anything in Class A. The team tries to help us find work if we stay in town during the off-season, so I came back here to Asheville. Some of the guys work construction or at car dealerships, wherever the team can find an owner willing to support the team by providing some off-season employment. 


Miriam’s Dad has a friend who teaches at the University of North Carolina at Asheville. He’s writing a book on the history of corporate corruption. He has a small (very small) grant from an eccentric foundation to help with research. So I’ve been doing some research for him. I majored in American history at Princeton, so it’s pretty interesting. I’m still living with my two roommates from last season. Sammy Johnson  is working on the landscaping staff over at the Biltmore Estate, and the other guy, Jordan Brown, is working on the county road crew. My parents can’t support me; I was on scholarship at Princeton.  I’m getting by, but let’s just say we eat a lot of pizza. 


Anyway, I'm hoping to move up at least to Class AA this year. They say the fast balls are faster there.  And the curve balls are wicked. 


The Brasserie Lipp, perched halfway up the hill in the old city, had a wonderful outdoor patio equipped with heaters and ringed with small white lights. A medieval stone wall lined one side of the patio. Elegantly dressed patrons sipped cocktails, clearly appreciating one of the first spring evenings when outdoor dining was possible. 


“So tell me a little about Tula Capital,” he said after they had ordered drinks.  


“We are only two years old, and have only been here in Geneva for a year,” Maria explained. “I haven’t even met a lot of the investment managers in town yet. We have been busy getting situated and taking our initial positions.” She looked into Brian’s eyes, “but we still have some work to do to get where we want to be.” 


“So, are you the principal, do you have partners?” 


“Yes, I have partners.  Like many investors in Switzerland, they wish to have their privacy respected.” Maria’s steady gaze suggested that this line of questioning was not likely to go much further. The drinks arrived, and she turned sideways to the table and crossed her legs; the dress ended well above her knees. Brian took a large sip of his gin and tonic. The moon was visible over the roof of the ancient building next door to the restaurant. The prosperous citizens of Geneva were enjoying their spring evening. Some discreet laughter could be heard. 


She sipped her martini, sighed, and looked up at the moon.  “I think we are so lucky to be able to enjoy this night in such a beautiful city.”  


Brian followed her gaze into the sky. “Yes, everything here is just incredibly beautiful.” 


Maria returned her legs to under the table and turned to face him. “And now I think it is my turn to ask some questions, yes?” 


“Of course.” 


“You have a market-timing signal built into your system, correct?”  Market-timing systems  were supposed to tell the manager when to get out. 


This was true, although the testing results on this part of the model were not as robust as Brian would have liked. ‘Yes, we do, although it's not designed to make short-term market calls,” he said. “We don’t find much evidence that models, especially the economic models, can do that consistently.”  


She ignored or passed over his qualified response. “So, this should provide protection against a sharp sell-off, yes?” 


“Well, to some degree, yes. We certainly do not plan to be fully invested at all times, although we can’t guarantee anything, of course,” he said.  


I see.  My investors are prepared to tolerate some risk. We are interested in adding some more quantitative strategies, and I like the way your model combines multiple styles, all driven completely by data. And your results are good. Of course, your fund is young, but so are we, so we understand that it takes time to build assets. 


This is almost too good to be true, Brian thought. Most of the Swiss managers are extremely conservative and can’t stand to take on too much risk. But she clearly is not like that.  


I think your fund may fit the profile we are looking for. We are looking for a vehicle for an initial investment of $30 million.  Would that level be of interest to you?” She looked steadily into Brian’s eyes as he blinked, trying to process what this meant. It would quadruple the size of his fund and make Maria his largest investor. It would also quadruple his income and allow him to hire more analysts and traders. She was well aware of all this, of course, since he had revealed the amount of the fund’s assets under management during the presentation.  He shrugged his shoulders; there was no point in pretending. 


“I’m sure you realize that such an investment would mean a lot to us,” he said. 


“We wouldn’t be too much too handle?’ she said, with a slight toss of her hair and a half smile. 


Brian finished the last drops of his gin and tonic. “We have confidence in our models; there is no reason they shouldn’t be able to handle a higher level of assets, but I guess we won’t know for sure until we try, will we?” 


Their first courses arrived.  He had the Andalousian gazpacho; she had the mixed salad. Maria insisted on ordering the wine, an expensive Swiss Syrah that she said she had heard good things about. 


The wine was spectacular. Brian could feel the tension in his neck and shoulders releasing as he surveyed the diners on the terrace. Maria ordered the grilled Norwegian salmon (“maybe it was born in Russia,” she joked); Brian would have the Corsican sea bass. Sitting in the April moonlight with the most beautiful woman on the terrace, Brian had a distinct feeling of floating, magically, off the ground. 


Maria sighed again as she finished her salad. “You know, Brian, I was 14 years old in 1989. We lived in St. PetersburgMy father was an economist who drank too much.  My mother was an ex-ballet dancer, who never made it to the BolshoiShe worked part-time as a ballet teacher in a middle school. I remember very well what times were like under the Soviets. My grandmother lived not far from Chernobyl when it blew up in 1986. She had to leave the area where she had grown up. We struggled constantly and had little hope that anything would ever change. I went to college and studied finance, but the professors were all ex-Communists. They taught capitalism as if it were only a theoretical, failed concept. Never in my craziest fantasies could I have imagined that I would ever be sitting here in Geneva on a beautiful spring evening, able to order whatever I want from the menu. And with an American guy, too.” 


“Yes it is amazing how things have changed,” he answered.  He did not know any women who referred in any way to having ‘crazy fantasies.’ Brian found himself feeling disoriented. This entire evening was completely outside his realm of experience. Brian thought of himself as an ordinary man, with a few talents but many weaknesses; this was an extraordinary evening. Maybe it would be better to turn the conversation back to business. “But are you concerned that it is only a small number of Russian citizens that are getting opportunities like this? Are you worried about the corruption?” 


“Ah, but this is capitalism, yes? This is how it works. I just read that your corporate chief executive officers  now make 300 times what their average worker makes, yes?  Your top 10% owns 70% of your country’s wealth? And your top 1% owns 35% of your country’s wealth? Incredible! You call them entrepeneurs, I think. We call them ‘oligarchs.’ I’m surprised you don’t have a revolution.” She smiled and went on. 


As for the corruption in Russia, do you mean when corporations submit fake financial statements, like Enron and Worldcom did? Or when companies backdate stock option awards to enrich their executives? Or is it when rating agencies give high ratings to subprime mortgage bonds sold by investment banks who are paying high fees to those same rating agencies?” 


Brian shifted uncomfortably in his chair. “Well, yes, we certainly have our share of corruption…but our corporations are not in bed with our politicians, like yours are.” 


Maria raised her eyebrows. “Brian, should we talk about the amounts that your banking industry contributes to Congressmen and Senators? I think I read that it is about $300 million a year, roughly? To 535 people?  That is only one industry.  And I have heard about a case coming to your Supreme Court, Citizens United, I think it is called? The court will decide if corporations can spend as much as they want to elect their own candidates? I would say that at least in your system you just admit it openly. We are not bold enough for that. Of course, we are just learning how capitalism works. You are already experts at it.  She laughed. 


“Ok, I will admit that our system has flaws.  And money does provide influence. But I think you are exaggerating the extent of corruption in the West.” 


She yawned and stretched both arms above her head, revealing a profile that caused the man at the next table to knock over his water glass. “I won’t push it much further, Brian. But surely you realize where we are sitting, in one of the greatest tax avoidance locations in the world. And it is not just Switzerland. You have Luxembourg, Liechtenstein, Monaco, Bermuda, the Cayman Islands.” She lowered her voice and leaned closer to him. “Even in this restaurant, I wouldn’t be surprised if half the customers here work for private banks that help clients shield money from taxesAnd at your luncheon today? Most of the people.” 


Their main courses arrived. “Let’s talk about something else,” she said. “Tell me more about yourself.  Are you married? I don’t see a ring.” Brian noticed that so far Maria really hadn’t told him very much about herself, but she was very good at finding out more about him. 


“Yes, I am.  Christy and I have been married for 25 years. She’s from California, but her parents were missionaries in Colombia. I dislocated my ring finger playing basketball and the ring won’t fit anymore. I’ve been meaning to get it enlarged. We have a son, Michael,  who is 19; he’s in college in Ohio,  studying film.  Our daughter Rachel  is 17.  She will be a senior in high school and … she’s going through some problems I’ve been in the investment business for 20 years. I worked as an analyst and then a market strategist for a regional brokerage firm.” 


“Where did you grow up?” 


I grew up in California. My father was a Presbyterian minister, first in southern California, and then near San Francisco. My mother was what they used to call a housewife; she raised four kidsHer father also was a Presbyterian minister.  So, we had Calvinists on all sides. My grandfathers would feel right at home here. I suppose I should, too. I probably should get a picture of myself with the statue of Calvin over in the park.  I have two brothers and a sister.”  


“But didn’t you go to high school in Pennsylvania?” 


Brian looked at her. How did you know that? 


She laughed. “Oh, I have done just a little checking. You wouldn’t expect me to make such a large investment without checking, would you?” 


“Well, yes, I suppose that makes sense. What else did you find out? 


“Well, you also worked at the Federal Reserve, but that was on your biography at the luncheon. I suppose that experience is a great help in running a hedge fund?” 


“The Fed? Oh no, I don’t have a clue what they are going to do next, if that’s what you mean. It might help me understand what they are trying to do with monetary policy, but I think they make that pretty clear, don’t you?” 


It is not always so clear to us.  But you have friends you could call if you needed to, yes?’ 


“At the Fed? Yes, I suppose I could call them. But only to clarify policy statements  or actions. They would never reveal anything material to anyone.  Anyway, they don’t know what the next move is going to be. Forecasting Fed policy is not part of our fund’s methodology, if that’s what you are wondering.” 


“Of course, I was just curious. In Russia we have a long tradition of mysterious groups wielding great power. 


“The Fed is not really mysterious if you take the time to read about how it works A lot of Americans are very sensitive about any sort of central control of anything. Contrary to what some people think, the Fed by itself can’t control the economy. 


They finished the meal discussing different parts of the U.S. and how Brian ended up in Atlanta at the brokerage firm. Maria insisted on picking up the check “to celebrate our new relationship.” Did that mean she was going to invest? Or did it mean something else? And if she knew where he went to high school, wouldn't she also know that he was married? 


“You know, Maria, I really haven’t learned much about you,” he said as she was paying. 


“Yes, you’re right. You know, I live very close by here in one of the old buildings. Would you like to see my apartment? We could have a nightcap and I can tell you more about myself.  It’s right on your way back to the Metropole.” Another smile that seemed slightly amused and mysterious.  With a quick turn, she took her hair out of its pony tail. Brian noticed more than one person glancing at them as they made their way out of the Brasserie. It was not just the Syrah; his entire body was tingling as if it had received a mild electric shock as they left the restaurant. Later, he remembered thinking that he was not sure if he was in complete control of himself. 


Her apartment was indeed very close by, up the cobblestoned hill about one block, and on the second story of a very old stone building. By now, it was 10 pm; the small plaza in front of the building was desertedShe inserted the key and pushed open a huge wooden door. They were greeted by a gray and white long haired cat. 


“This is Sasha. She’s a sweet girl.” 


Brian bent down to pet Sasha, who obligingly let him stroke the back of her head. 


The apartment had high ceilings, several book cases with books in English, French, and Russian, and some startling contemporary art on the stone walls. graphic representation of Leda and the Swan, which Brian recognized as based on the scandalous version by Peter Paul RubensWindows and a small balcony looked out over the medieval plaza. Maria produced a bottle of port and poured two glasses. He could smell her perfume as she handed him his glass. It was exotic, spicy, hard to place, not like anything he had encountered before.  


“What is that perfume It’s unusual. 


She came close and clicked her glass with his. “Well, I am a bit unusual, you know.” 


She put her glass down on the coffee table, put one hand on his cheek, and kissed him.  He felt her hand on his belt.