Before OCD had a chance to pull his gun on the Mormon, I said to him, “You're partially right, Greg, at least about Elliot. But his nickname wasn't just the Penguin; it was the Suicidal Penguin. See, we were already on the verge of bankruptcy by then, and Elliot was on the verge of suicide. So Chucky used to waddle around the office with his index finger to his temple and his thumb sticking up, as if he were getting ready to blow his own brains out. ‘Hi, I'm the Suicidal Penguin,’ he'd chirp, ‘and I deliver meat and seafood to local restaurants. I have an overorder on my truck and can't get back to the freezer,’ and he'd keep saying it over and over again, as he waddled around the garage, flapping his arms like a migrating penguin. ‘Help me! Help me!’ he'd chirp. ‘Hurricane Gloria pissed all over me and the kerosene heater is suffocating me and the Gerber Baby's wife looks like a space alien and Cinema Head's mother is closing down our movie theater and…’” I started chuckling. “He was really something else, Chucky, and then, one day-poof!—he was gone. Vanished like a fart in the wind. It turned out he was robbing liquor stores at night. Last I heard of him was when two NYPD detectives came by the garage, trying to ascertain his last-known whereabouts. He's probably dead by now, either that or he's doing stand-up comedy somewhere.”
“So what was your nickname?” asked the Witch, compressing her thin lips until they all but disappeared. I smiled and said, “I got off easy, Michele. Chucky called me J.P., which was short for J. P. Morgan. See, Chucky never made fun of me. He believed in me, and he loved the meetings. After each meeting he would pull me aside and say, ‘What the f**k are you doing with this business? It's beneath you. You're the sharpest guy I know, J.P….’ And he'd tell me to cut Cinema Head and the Penguin loose. ‘They're holding you back,’ he'd say. ‘You're J. P. Morgan, and they're smalltime bunko artists.’” I paused, thinking back on his advice. “He happened to be right on target with Paul; he was much too lazy to sell door to door. And he was also right about our company; going door to door with a pickup truck was a fool's errand, totally f**king ludicrous.
“But he was wrong about Elliot. The Penguin was a winner, in the truest sense of the word. No one worked harder than him, and he was completely loyal to me. We would go on to make a fortune together, although not in the meat-and-seafood business. It would be on Wall Street. First we needed to be taught a few more lessons in humility.”
I took a deep breath and said, “It was sometime in late December when we finally hit bottom. We were literally out of money, and Paul's mother was threatening to call the sheriff. All seemed lost; all options had been exhausted. And then something incredible happened, something entirely unexpected. I'd just gotten back to the garage from another torturous day in the field, when the Penguin said to me: ‘I got a strange call today from one of our meat suppliers. They asked me what terms we wanted.’ He shrugged, as if confused. ‘I didn't know what they were talking about, so I told them I'd think about it and get back to them.’
“ ‘What does terms mean?’ I asked. ‘Terms for our surrender?’ to which the Suicidal Penguin shrugged his shoulders and said, ‘I'm not really sure, but what's the difference? The freezer's empty, and we don't have money to buy food. We're out of business.’”
I paused, smirking at how unsophisticated we'd once been. We hadn't the slightest idea that our suppliers would be willing to ship us food on credit. It seemed like an outlandish concept that they'd be willing to go out on a limb like that, but, as I was about to learn, it was standard operating procedure: Everyone gave credit. The business lingo was terms, which was short for terms for payment.
With a hint of mischief in my tone, I said, “Once I found out that our suppliers would be dumb enough to ship us food on credit, I quickly saw a way out. It was simple: Grow like wildfire. Take on as much credit as possible and push the payment terms as far out into the future as I could. Then buy as many pickup trucks as possible, all of them with no money down—which you could do if you were willing to pay twenty-four percent interest. But I wasn't concerned about the monthly payments, because the more trucks I had on the road, the more food I would sell and the better my cash flow would be.
“In other words, since my suppliers were giving me thirty days to pay for the food while my customers were paying me every day, as long as I kept selling more and more, my cash flow would continue to improve. Even if I weren't making a dime on a sale, I would still be generating cash, using the thirty days of float.”
The Bastard said quickly, “It's Business 101.”
Yeah, right! I thought cynically. The Bastard couldn't possibly appreciate the dark art of juggling cash flow! (He was far too honest.) Perhaps he understood the simple math of it, but there were so many devilish strategies to employ, especially in the endgame, when your creditors were circling and your balance sheet was bleeding red ink faster than a hemophiliac with a gunshot wound. It would take a month to explain all the scummy nuances to someone like the Bastard.
On the other hand, Elliot and I quickly became Jedi Masters at the art and then just as quickly we crossed over to the dark side-finding every way possible to juggle cash flow. My favorite was reverse financial extortion, during which you'd turn the tables on an angry supplier by explaining to him that the only shot he had of getting paid back was to accept a small payment on an old invoice in return for extending you more credit; that one worked like a charm. And then there was the old one-signature-check trick, where I'd give a supplier a check with either my or Elliot's signature missing, which would cause the bank to return it for improper endorsement, as opposed to insufficient funds. Of course, we were always careful to alert the bank manager about this check, lest he mistakenly try to clear it and it bounced like a kangaroo.
And there were other tricks too, but none of them was the Bastard's business. So all I said was, “Exactly; it's Business 101, Joel. Before I knew it, I had twenty-six trucks on the road, a legitimate warehouse, and a whole lot of money in the bank. Of course, my balance sheet was a total wreck, although I refused to focus on that. Instead, I relished giving sales meetings to twenty-six nitwits, most of whom were addicted to either crack or smack or were certified alcoholics.
“Still, at least I was the proud owner of a seemingly successful meat-and-seafood company. And all my friends were really impressed with me; they all thought I was a first-rate entrepreneur.” I shrugged innocently. “That's when I met Kenny Greene; he came to work for me in the meat business.”
“Really?” said OCD. “I didn't know that.”
I nodded slowly, wondering why Kenny Greene hadn't been indicted along with Danny and me. He was the third partner at Stratton, although he hadn't been associated with the firm since we'd settled our SEC case four years ago. Still, he'd been a twenty-percent partner up to that point, as had Danny (I owned the other sixty percent). He'd made tens of millions of dollars and had broken as many laws as we had. It seemed highly illogical (and also a tad unfair) that he'd escaped OCD's wrath—unless he'd been cooperating all along!
I chose to keep those thoughts to myself, and I said, “He was a referral from one of my friends from college, a guy named Jeff Honigman. He and Kenny were first cousins.” I motioned to my villains, thieves, and scoundrels list. “Jeff's on there too, although most of his dirty deeds took place after he left Stratton, when he was working for Victor Wang, at Duke Securities.” Once more, I motioned to the list. “Victor's on there too, somewhere close to the top, just above Kenny's name.” I wondered if they were aware of what a truly depraved maniac Victor Wang was. “In fact, Victor worked for me in the meat-and-seafood business too, although only for about an hour. He was too proud and too lazy to actually take a truck out and go door to door; he just showed up to listen to one of my sales meetings. And, of course, I still remember the first time I laid eyes on Victor.” I started chuckling at the memory.
The Mormon chimed in: “How could you forget, right?”
I nodded in agreement. “Right, how could anyone forget? He's basically the biggest Chinaman to ever walk the planet. He's got a chest the size of the Great Wall, slits for eyes, a brow ridge like a rock ledge, and a head that's larger than a giant panda's.” I paused, catching my breath. “You know, I don't know if all of you have seen Victor, but he's the spitting image of Oddjob, from the James Bond movie Goldfinger. Remember Oddjob? He's the one who killed people by throwing his hat at them—”
“What's your point?” said the Bastard, shaking his head.
I shrugged. “No point, really, other than that Kenny and Victor were childhood friends who dealt drugs together back in high school—both of them, I might add, being backed by Kenny's mother, Gladys. But I refuse to give you any information about Gladys; she might try to kick my ass.” I smiled ruefully. “In fact, the last time someone got under Glady's skin was at a bowling alley. I think she ended up tossing the guy for a strike. Or maybe it was in a supermarket, where she knocked out a woman in the express line. Either way, if you'd ever actually seen Gladys it wouldn't really surprise you.” I nodded my head three times, for emphasis. “There's not an ounce of fat on her, and her gut could stop an English musket ball fired at more than twenty paces. Know the type?” I raised my eyebrows.
Nothing but blank expressions, punctuated by silence. I soldiered on: “Anyway, Gladys belongs on that list too, although I assume you're not interested in her, right?” I crossed my fingers.
“Right,” the Bastard said tonelessly. “We're not interested in her. Why don't you get back to the meat business.”
I nodded, relieved. “Fair enough; but just so you know, this whole Kenny-Gladys-Victor triangle leads right back to your earlier question about where the first wave of Strattonites came from. Kenny and Victor both grew up in Jericho. Kenny was a pot dealer and Victor was a coke dealer, and Gladys was their backer.” I paused, then added, “But her motives were pure, of course. I mean, you know, she was just trying to keep the family afloat after Kenny's father died of cancer. It was all very sad.” I shrugged, hoping Gladys could somehow hear my words and would choose not to beat me up if we crossed paths. “Anyway, out of the first wave of Strattonites, about half came from Jericho and Syosset—which are sister towns—and virtually all of them had been clients of Kenny and Victor. That's how Stratton was able to grow so quick; even before we gained a reputation as a place for kids to get rich, I had dozens of them lining up at my door. And then they'd move to Bayside to join the cult.
“But let me take things in order: Kenny worked at the meat company for only one day, at which point he crashed up one of my trucks and then never called me again, or at least not until I was out of the meat business. And Victor, as I said, never worked there at all; he just showed up once to listen to one of my sales meetings and he never came back.
“In the meantime, my business was on the verge of imploding.” I shook my head slowly, preparing myself to relive the dreaded memory. “You can only play the cash-flow game for so long before it reverses itself on you. In our case, the reversal started in January of 1987. It was a ferocious winter, and sales had plunged through the floor. Cash flow, of course, had plunged with it. I gave meeting upon meeting, desperately trying to motivate the salesmen to go out and sell, but it was no use. It was too cold, and sales came to a grinding halt.
“And by the very nature of the cash-flow game, that's when the boomerang came flying back the hardest. Remember, it's Business 101, Joel. When you're growing on credit, today's bills are for things you sold thirty days ago or, in our case, sixty days ago, because we were already thirty days behind on our bills.” I paused, then corrected myself. “Actually, we were ninety days behind on most of our bills, but we were no longer doing business with those companies; they'd already cut us off, so we'd been forced to move on to more-fertile pastures—meaning, new suppliers who hadn't caught wind of the fact that we didn't pay our bills.
“But that part of the game was over now too. Word was out that we were a bad credit risk and shouldn't be shipped to unless we paid cash up front. Meanwhile, Elliot and I were still trying to keep things afloat. We'd exhausted our personal credit cards, and every day we were falling deeper and deeper into debt. We hadn't paid our truck leases, our cell-phone bills, our car leases. And our new landlord, a Syrian bastard, had an eviction order against us and was making us pay double rent until we were current.”
I shook my head slowly, still amazed at how deep a financial hole we'd dug for ourselves. Then I said, “It was right around that time, in the winter of ‘87, when I started hearing rumors about a kid from my neighborhood named Michael Falk. He'd landed a job on Wall Street straight out of college—right around the same time I was starting dental school—and he was supposedly making over a million dollars a year.” I paused for effect. “At first I didn't believe it. I mean, growing up, Michael Falk was not a sharp kid. In fact, he was more like the neighborhood loser, someone everyone else made fun of for not taking a shower. He wasn't quick or bright or well spoken or anything else, for that matter. He was just average, nothing more. So I figured it was bullshit, that there was no way he could be making that sort of money.
“Then, one day, by sheer coincidence, he came pulling up to my apartment building, driving a convertible Ferrari. Thankfully he was kind enough to condescend to me, and he explained that all the rumors were true—yes, he said matter-of-factly, he was on pace to make over $1.5 million this year, and last year he'd made almost a million. We spoke for a few more minutes, during which time I lied incessantly—explaining how well I was doing in the meat-and-seafood business, pointing to my little red Porsche as proof of that fact. He shrugged his shoulders and mentioned something about chartering a hundred-foot yacht off the Bahamas with a bunch of blond models—ironically, one of whom would become my second wife one day. And then he was off, smoothly, immaculately, and with a puff of expensive Italian exhaust fumes in my face, which at that very moment was a mixture of awe and astonishment.”
I let out a few chuckles. “Anyway, I can tell you that I had never been so affected by a single encounter in my entire life. I remember watching his Ferrari pull away and saying to myself: ‘If that guy can make a million bucks a year, then I can make fifty million a year!’” I paused, letting those words sink in. “It turned out to be an uncanny prediction, don't you think?” Then I quickly added, “Although I guess I failed to predict the other half of the equation: that I'd be facing a couple of hundred years in jail”—I locked eyes with the Witch—”as well as the eternal damnation of my soul.
“Anyway, I was living with my first wife, Denise, back then, although she wasn't actually my wife yet. We were sharing a tiny apartment in a yuppie-infested apartment building in Bayside called the Bay Club. That's where I first met Danny Porush. He was living upstairs from me, although at the time I hadn't met him yet. I'd seen him around from time to time, but we'd never really spoken.” I shrugged. “It's funny, but I remember always thinking how normal he looked, as if he were the perfect yuppie. In fact, he and his wife, Nancy, were the pictures of success and happiness. They even looked alike! But, of course, I didn't know at the time that the two of them were first cousins. And I also had no idea that Nancy's sole mission in life was to torture Danny—to make his life as miserable and as difficult as possible—and that Danny, despite his normal appearance, was completely off his rocker, spending the bulk of his day holed up in a Harlem crack den, smoking his latest business venture into coc**ne-induced bankruptcy.
“But I'm jumping ahead here. I still wouldn't meet Danny for another year. Getting back to Michael Falk: It was that same afternoon when I told Denise about my little run-in with this erstwhile loser. When I was done, no words were necessary. Denise just looked at me with her big brown eyes and nodded slowly, and that was that. We both knew right then and there that my destiny was Wall Street. I was the most talented salesman in the world; she knew it and I knew it. My mistake was that I'd picked the wrong product to sell.”
“How were you able to get a job as a stockbroker?” asked the Bastard. “Your degree's in biology and you were just coming off a bankruptcy. Why would someone hire you?”
“I was able to get my foot in the door through a friend of my parents, a man named Bob Cohen. He was a mid-level manager at LF Rothschild, and he had enough clout to get me an interview. And from there I sold myself. I went out and bought myself a cheap blue suit, and then two days after that I found myself sitting on the express bus on my way to Manhattan for a job interview. Meanwhile, Denise was sitting at home waiting for a tow truck to come and repossess our Porsche—which it did—right about the same time I was getting myself hired as a stockbroker trainee at LF Rothschild.”
Then I smiled sadly and said, “And after that, my next stop was to my meat company, where I dropped the bomb on Elliot.” I paused for a moment, thinking back. “I still remember this day like it was yesterday, the bittersweetness of it, the mixed emotions I felt. As happy as I was about my future, I was sad about parting ways with Elliot. He was like a brother to me. We'd been partners since our mid-teens. We'd been through a wall of fire together-digging trucks out of the mud and knocking on doors until our knuckles bled. And now we were going our separate ways.
“The warehouse, of course, was a complete wreck. We were surrounded by broken-down trucks and empty boxes, and the freezer was a total disgrace. The door was wide open, and there wasn't a stitch of food inside. Thick layers of frost were growing out of the freezer, like fungus. It served as a grim reminder of how badly we'd mismanaged things. I remember my self-confidence being shattered.
“With a heavy heart, I said to Elliot: ‘I'm sorry I'm leaving, but this is something I gotta do. I gotta give Wall Street a shot. The money that people are making down there is staggering, Elliot. Truly staggering.’
“ ‘I know that,’ he answered quickly, ‘but I couldn't imagine sitting behind a desk all day. Everything is done over the phone. You'll be cold-calling people you never met before, trying to get them to send money. It doesn't make sense to me….’ “
I shook my head slowly. “You know, it might sound funny now, but I remember thinking the exact same thing—that it was inconceivable that someone I'd never met before would send in hundreds of thousands of dollars, based on a phone call. Not to mention the fact that I'd be calling people from all over the country. I mean, what were the chances that a complete stranger from Texas would be insane enough to send me half a million dollars of his hard-earned money without ever laying eyes on me? Yet I still had the image of Michael Falk burning on my brain. The simple fact was that kids were making fortunes on Wall Street. Wall Street was where I belonged.”