LOVE AND THE BAY STREET BINGO PLAYERS: The Final Volume of a Two-Part Trilogy

By John D. Frankel and Daniel Crack

The wicked pen of John D. Frankel strikes again. The long-awaited sequel to The Heretofore Un-Tolled History of the Independent Republic of Harvey Markson has finally arrived.

          Readers who enjoyed Frankel’s first novel, a witty existential tour of life in

• Language: English
• Publisher: Kinetics Design
• Release date: Dec 14, 2016
• ISBN: 9781988360027

Book preview

1

Explosive Breaking News

2003

Like a one-eyed king, the big clock in the tower of the Old City Hall, the flower beds below freshly turned, peered down lower Bay Street between the tall bank buildings as if to keep a watch on things. Its view of the harbour was blocked by an ugly raised expressway, the on and off ramps clogged all day long, mostly with people coming from or going to the city’s financial district.

Of late, life had not been kind to that district – The Street, as those who work there like to call it – which had suffered the aftermath of the high-tech binge at the end of the twentieth century. Not kind at all. Just a block south of the clock tower, though, the hint of spring and the recent sandblast to restore the yellow brick facade of the thirty-two-storey office building at 370 Bay suggested one of the tenants might get a new lease on life.

And though they objected, and very vigorously, to the size of the rent increase that went along with their new lease, still, the tenants of the fourth floor of 370 felt a solution to their recent problems was close at hand. The corporate brochure referred to the fourth floor as The Head Office of IED Securities Inc., one of Canada’s most prestigious investment houses since 1969.

Mind you, the Winnipeg branch of IED had a slightly different description for those premises. When Toronto phoned in, the speaker system would announce something like Mr. Bennett, Clownhaven on line two for you, sir.

Wilfred Cross Bennett, an old classmate of mine from boarding school, was in charge of the Winnipeg office. He had just returned from two weeks of golf in Phoenix, Arizona, and had come in an hour early before everybody that particular Monday morning to catch up on his emails. He scrolled down through the dozens and dozens of messages that awaited him, deleting one after the other, many unread (stopping only – knowing him – for discount offers on libido boosters and enlargement pills), until his cursor highlighted the subject Welcome Our New President. That one he read. That one he read word for word.

Jesus Christ! Cross blurted out with not a soul around to hear. Then he reread the message, all 58 kilobytes, and repeated those same words, this time a little slower and a little louder. Next he shouted in short, chopped syllables, I mean, Jee-sus. Jee-sus Kee–riced! rotating his freshly tanned head from side to side, eyelids clamped shut over his small brown eyes, one hand massaging his square moustache. Has everybody down there gone stark-raving goddamn nuts? I mean, Zyg Adams? Just what we need – a sex fiend for president! That’s the guy who’ll save us? Are you kidding me? Jee-sus! I mean, for the love of God, that little four-eyed fornicator has slipped into more beds than a worn-out bedpan. Are we really that goddamn desperate?

Cross then looked away from his computer. You know what I think? I think sooner or later this whole goddamn company is going to blow up, he informed the empty office.

2

A Bit of a Challenge

One school of thought argued that the wording one of Canada’s most prestigious investment dealers since 1969 implied IED Securities Inc. had been around long before that and only became prestigious in 1969. That, however, was actually the year the company was founded. Two old Toronto firms with old Toronto names that no longer carried any weight – Irwin & Co. and Elsworth-Densmore – merged, the new partnership settling for the name IED. In case something went wrong, as it so often had, how much better to drag letters of the alphabet through the mud than old Toronto names once again.

Over the next three decades, like the inscrutable movements of stock prices, IED journeyed through many ups and many downs, but unlike most markets, through many more downs than ups. In 1974, with an oil embargo and the Dow Jones Index of U.S. stocks hitting what turned out to be a low point unmatched in the decades that followed, partners begrudgingly had to throw in capital to keep the proud ship afloat. In early May of 1980, two weeks before the Province of Quebec held a referendum on whether or not to separate from the rest of Canada, the Montreal partners had had enough and closed down their office having guessed, incorrectly, that les séparatistes would win the day.

Then, in 1981, after just three years in business, the Calgary office closed up shop when the oil business in Alberta, in the words of The World of Finance, plunged into some lean years, very lean, indeed. Three members of the Calgary staff opened a Vancouver branch, but the timing, always difficult to get quite right, was definitely quite wrong. Then, in 1986, cirrhosis of the liver and concomitant hepatitis claimed the life of the eldest founder, Mr. A.A. Irwin. A year later the stock market took so severe a drop – 22.6 percent in one day – that the two remaining founders, Messieurs Ellsworth and Densmore, threw in the towel. They foresaw nothing except bleak times ahead for the stock market, times as bleak as the Great Depression, especially Mr. Densmore, an economics major at university. So the two men sold their interests and disappeared.

By then only the head office in Toronto and a branch office in Winnipeg existed. More precisely, co-existed.

In its history, even at its most successful, IED was never what you would call a significant or important brokerage house. Any attempt to make a significant increase in its size and importance, an astute investor would take as a sure sign – a leading indicator – that the stock market was about to tumble, or as they say on The Street, head south, very south. After every expansion, a bloodbath followed. Then, and only then, wounded and oozing red ink, would IED slim down to its fighting weight of about seventy-three people, twenty-three of whom held the title of vice-president or better. Of those twenty-three, sixteen had no executive responsibility at all, their titles awarded solely for marketing purposes.

In 1989, IED’s ad agency translated that rich history into a corporate symbol – a fluted Doric column – to imply stability. (Within a day, the new logo became known throughout the company as The Shaft.) To go along with that logo, the tag line underneath the IED Securities Inc. name on all letterhead and envelopes and all forms, all business cards, on the corporate brochure, and in all its newspaper ads, and later, on its website read: Stability. Integrity. Compactness.

Naturally, what appealed most to the two new major shareholders was the compactness. Though small, IED had most of the components of the much larger, bank-owned brokerage houses. For Sherwin Chable, chairman, CEO, and president, and his cousin, Martin Chable, vice-chairman, IED’s configuration suited them to a T. Their expertise lay in helping small technology, biotechnology, and mining companies share with the public the rewards of nearly new ventures.

It had a comfortable and attractive reception area where several reproductions of Cornelius Krieghoff’s lush winter scenes played off against the Wedgwood blue walls and the dark blue broadloom, somewhat time-worn in front of the receptionist’s desk. At the centre of the room, draped in beaded-glass strands, hung a château-sized chandelier, all but a six or seven of its dozens of little bulbs glowing. A set of dark mahogany-stained doors opened into a boardroom, the walls proudly bearing the photo portraits of the three glum-faced founders. The large mahogany table could seat all of IED’s top executives and quite a few vice-presidents for sales meetings. The harsh glare of the overhead lights, much like you’d expect in a police interrogation room, could be lowered for meetings with clients or left bright, should a vice-president get engaged, for an all-night crap game.

The other door in the reception area opened onto a long corridor. On the left was a pair of glass doors – the entrance to the executive suite – which could only be opened by a plastic ID card or when one of the administrative assistants inside pushed a button. A little farther along and on the opposite wall hung a large needlepoint rendition of the Great Wall of China, meant to assure the world that the reams of confidential information held behind in the investment banking department remained … confidential. Rumour had it, though, that in nearby bars after work, or on suburban golf courses during weekends, cracks sometimes formed in The Wall.

Farther along the corridor was the research department of Skly Cszymorska (pronounced skly cszymor-ska, as the welcome-on-board memo clarified) and his two research analysts. And beyond Skly’s office lay a great hall with two long rows of desks, separated by a shoulder-high partition, which held the work desks of IED’s thirty-two registered representatives. Most often they were called reps (interchangeably called The Producers), the people who dealt with the customers (interchangeably referred to as clients). The room constantly buzzed with phone chatter and outbursts of laughter, all overseen from a glass-walled office by the darting eyes of Don-Phil de Vita, senior vice-president of sales.

Beyond the desks of the reps on the far side of the hall sat the back-to-back desks of the two equity traders, as well as that of the head (and only) bond trader (Cross Bennett’s job in the early 1980s).

Next to the men’s toilet sat the Back Office. Its job was to handle all the paperwork the reps created and to make sure of adherence to the infinite number of regulations. The air smelled stale. The yellow walls had faded into a dirty-water grey. The hand-me-down desks, chipped and scratched, looked ready for pickup any day by the Salvation Army. That department – administration and compliance – consisted of two tiny offices and five cubicles, the staff all crammed together as snugly and gloomily as the contents of a sardine can, not a vice-president in the lot.

In spite of the predictions made by the two founding fathers when they sold their interests in late 1987, stock prices did begin to rise. And despite the Housing Bubble of 1989, the U.S. Savings and Loan Crisis of ’89, the Kuwaiti Crisis of 1990, the Asian Currency Crisis of 1997, and the Russian Financial Crisis of 1998, stock prices moved up and up. And IED customer-clients bought up large chunks of every initial public offering the company brought to market. By 1999, wealthier than they ever dreamed they’d be, the majority shareholders of IED, both men in their late fifties, took most of their profits off the table in the form of bonuses, dividends, stock buybacks, and the sale of shares to their partners, then retired to Panama. For reasons, both claimed, of health.

Winnipeg’s diagnosis? A chronic allergy to taxes.

Nothing at all seemed wrong with the cousin, Martin, who took Pilates classes three times a week. And although Sherwin carried thirty pounds of excess weight, he never missed a weekend of skiing in winter. His only visible ailment came from an accident at Snowbird, Utah, when a member of the Church of Jesus Christ of Latter-day Saints skied into him. He called the limp his Mormon Knee and complained about it incessantly to anyone who would listen.

The title of chief executive officer of IED then fell upon the broad shoulders of Robert Wiseman Little, at one time a lumbering all-star right guard for a small college in the Maritimes. He graduated with average grades (very average) in the late 1970s, and for the next two decades lumbered along as a broker-without-distinction. Then, suddenly, with the final up-wave of the markets in the late 1990s, he caught on to the game. For three years straight, he produced more than a million and a half dollars in commissions (47 percent of which he got to keep before taxes). He did that by trading clients in and out of stocks as the market made its jagged ascent toward the year 2000, many of the stocks those freshly minted by the Chables and their Street confreres such as the highly influential Federal Wealth and Great Trust Co. owned by one of the big five banks.

For the first two years as a top salesman and the contributor of hundreds of thousands of dollars to company revenues, Big Bobby Little was presented, out of a sense of gratitude, with tickets to the opening Toronto Blue Jays baseball game. By the third year, though, the firm had no choice but to recognize his efforts. To his title of vice-president was added that of chief equity strategist. Not five days later, the producer of This Week in Capital Markets, its theme song James Carlie White’s melodic Cracked Pots Cantata (in C major), phoned with an invitation to appear on the show.

And right after that appearance, a call came in from Toby Williams from Today’s Business. Toby wrote a tough-minded column, highly critical of the financial industry and its adamant refusal to put in writing, in any place other than its advertising, that the client’s interest came first. The column, entitled Frequently Unanswered Questions, was referred to by The Street by its acronym, FUQs, pronounced few-Qs, or more commonly, as fuh-Qs.

Other nightly business news programs, both television and radio, began to invite Mr. Little to pass on his investment wisdom. Hardly a week went by in those days when one writer or another from the business media did not seek out the views of IED’s chief equity strategist for the quotes needed to complete their columns. And, of course, The World of Finance’s good old Halvert Tulvin started to call regularly on the lookout as always for gossip droppings for his Goings-On column, opening with the standard inquiry used by all top-notch investigative journalists these days: Anybody new in the doo-doo?

1999

The tight-fisted Chables left the day-to-day scene to become The Gentlemen of Panama, as Winnipeg referred to them. Chairman Chable’s outsized office, the sole exception to IED’s core value of compactness, referred to by Winnipeg as The Ballroom(any request from there for co-operation as a dance invitation), fell to Big Bobby just as the twentieth century breathed its last few weeks.

One bit of esoteric financial theory claims you’d need at least sixteen years to determine with reasonable certainty whether the performance, or track record, of an investment manager, whom financial people prefer to call a money manager, was due to innate skill or to sheer luck.

Whichever was at play for him in the late 1990s – luck or skill – it vanished almost the moment Big Bobby Little sat down behind the king-sized, blond-maple desk in his new office with its magnificent view of the bank building next door. The world for Big Bobby, however, turned rough. Very, very rough. In fact, a full-scale storm broke out in the markets over the following months. Clients, who relied on common sense rather than statistical theory, took less than sixteen years to conclude that whatever was at play in Big Bobby’s success, it was definitely not skill.

As the stock market began its rapid descent in the early days of the new millennium, so, too, did the value of the portfolios of IED’s clients, often with greater velocity. Within eighteen months, millions and millions of dollars of client wealth disappeared from the face of the earth. From habits formed over the previous two decades when markets just kept going up and up, IED’s reps/producers advised clients/ customers to take advantage of market dips to buy this or that stock at a bargain price.

Our research people think we’ll never see Pluman’s Funeral Homes at this price again in our lifetimes. Don’t forget, people die every day. That was the kind of argument you’d hear – every day – from the work desks at IED Unfortunately, IED’s clients discovered that in this new century many buying opportunities turned out not to be bargains at all. Quite the opposite. And in the case of Pluman’s Funeral Homes, for example, it turned out that, yes, true enough, people were dying every day, but some of the people still living changed the accounting rules.

Nobody at IED had foreseen for a moment the issuance of Financial Accounting Standards Board Bulletin #1407-Q-(ii)b, which stated that funeral homes could no longer book so-called pre-need sales as current revenue. Lest the prospective client had a change of heart and switched to another supplier before the actual need for a funeral arose, the new rules stated that enterprises in the death-care industry could no longer count pre-need sales immediately as revenue. That change alone took away a quarter of the annual revenue declared by Pluman’s. Its board of directors eliminated the fifty-cent dividend. And the stock price shrank quickly and efficiently and quite in keeping with financial theory (see E. Fama, The Behaviour of Stock Market Prices, The Journal of Business 38, no. 1 [January 1965]: 34–105).

2002

Hey, Big Bobby, a couple of years back you talked me into a thousand shares of Pluman’s when it came on the market at twenty-four, remember? a long-time client inquired.

I don’t remember exactly. Was it twenty-four?

And I told you Gerry Pluman wouldn’t sell his company for anything other than top dollar. Well, I can’t get four bucks for the shit today. So, like, tell me this, Mr. Smarty-President, where the hell did my twenty grand go?

Not an unfair question. Perhaps a good FUQs question for Toby Williams over at Today’s Business. When somebody’s willing to pay you $24 a share one month and not a nickel more than $4 the next, where does that $20 difference go?

The incumbent CEO and president of IED hesitated for a moment, cupped a hand to his chin, and replied, Into thin air, I guess, Doctor.

That was just one example. There were all kinds of similar calamities when investors decided out of the blue that a great idea, a snappy name, and no revenue were not sufficient conditions for a company’s future profitability, especially start-up dot-coms run by children just out of high school. Rethinking such as that resulted in price drops as drastic as those of the shares of Pluman’s Funeral Homes Inc.

As company after company went out of business and the price of their shares hit bottom, you could almost hear that deadly thump as they fell to earth.

The markets plunged and kept falling until every bit of optimism was squeezed out of the participants (the very best time, claimed Sir John Templeton, to invest). From the high-water mark, not considering money withdrawn, many of the accounts at IED dropped 40 percent, some even more. Many who had been talked into borrowing money in the