REKT - Chapter 13
Goodbye Fritz
Remember me in Wrigleyville on my perfect mattress wrapped around Niko? That was yesterday. Today is New York City, again. A quick hit and run, I’ll be back in her arms tonight. The thing is this trip couldn’t wait. Fritz does not get the long goodbye. He gets the news broken to him, hard and fast.
“Where’s Andy?” he asks, disappointed to get your boy here.
Like Andy has interest in you anymore. You’re lucky I decided to do this in person. I could have called, but I thought coming here was the right thing to do. Andy is a million miles away. He’s on to the future, out trying to raise money. You’re the past Fritz, a closing door. A chump who got played. There’s sausage supper waiting for you.
“Andy is meeting with some of our larger LPs. He apologizes for not being able to make it.” No, he isn’t. Andy left that task to me as well. After Fritz here, I need to swing over to MercuryOne and walk them through the wind down. Then I’ll be up first thing tomorrow doing video conferences with Europe.
I’m worried about Andy. The Erskine thing shook him good. There was a girl in a room down there. She was a friend of Anthony’s, a special friend. She was cool. There was no need to worry, Erskine said. Everything is cool, but she was too young. There was no doubt about that. Andy filed a report. The cops in Denver were reluctant. Andy didn’t know where we were. He couldn’t name the place. He couldn’t name our driver. The SUV picked and dropped us at the edge of the Marriott. We didn’t think a thing of it when it picked us up. We were all too aware of it at the drop off. The only footage they have is us walking out and walking back. The cops pressed Andy hard about the girl. Was he sure she wasn’t eighteen? He had to admit it was possible. She wasn’t that young, but it wasn’t right at all. The entire thing was deeply wrong. Fucked up.
Andy insisted on paper. He got his report. A cop humored him with a suspicious incident report. We’re not even sure that’s a real thing. There was the matter of the girl of course, but there was also a matter of blackmail. He felt eyes on him. Joe had the same feeling. They were being watched, being recorded. It happened in a lounge downstairs. Anthony wanted them to take a tour with the girl. She had so many things to show them. That’s when they left. They wouldn’t go for a walk with her. They wouldn’t check out the other rooms. What did that leave the cops to file on? A girl who could have been underage, in a place Andy couldn’t name, hanging out in a lounge at a party.
Erskine though? He’s a real piece of shit. There’s paper on him. Plea bargains, house arrest. A very lenient sentence. Andy is sure of what was going on down there. Joe too. I trust them. They have excellent instincts; both can read people on a level I find remarkable. Andy’s been sending us Google Earth links. Asking us if ranches look like the place. There’s no Double Y listed in Colorado. That’s not surprising. I’ve offered to call Cynthia, to put the question straight at her. We aren’t touching that money. There’s no bridge for us to burn, but Andy is nervous. He thinks it might trigger something out there. Word might get around about us. Doors could close.
I don’t like that paranoia one bit. I’ve seen it in Andy before. It leads to dark places and bad behavior. Manic episodes. He’s out on his own, chasing money, fixating on a boogieman. That’s a worrying combination. I need to get the Icarus shutdown rolling, then I need to be by his side. Someone has to watch over him. His health is at stake, so is our next chapter. Nikola has a million dollars from the gold sale. She’s started trading it, but it’s not enough money. Crypto is exploding. Bitcoin is on a tear. Timing is everything. There’s a window we need to slip through before it gets too late.
“You went long when you should have gone short?” Fritz asks me, a bit incredulous.
“Simple as that.”
“But surely you could have recovered from that trade. It wasn’t catastrophic, was it?”
“It was Fritz. The market has been static for the last couple of months. The new iPhone isn’t selling like it was supposed to. Samsung had that thing with the exploding batteries. Tesla hasn’t been able to scale as promised. There was a lot of expected demand that never materialized.”
“And?”
“I got greedy. Tale as old as time. I levered up on futures bets in the basics. I thought lithium had room to run, lost a hundred million instead.”
“Ryan, this is very disappointing.”
Fritz is not going to have any sushi. We need to see this from his perspective. Poor guy. I am devastated for him.
“We had no intention of closing shop, but we lost the support of a few key family offices. A series of calls, a very long weekend. It happened like that. Redemptions have drained the other accounts. The only money left is here, and this will all start moving soon. Expect a steady stream of money out from our account as positions are closed one by one.”
Fritz is standing, showing me the door. This fat fuck from Frankfurt is giving me the high hat. Fifteen fucking minutes and I flew all the way from Chicago to meet him?
“I am sorry Herr Ryan, but I have urgent matters. This meeting was a special carveout from a busy schedule. You understand, don’t you?”
“Of course, Fritz. One last thing. There will be no further oversight of this account, correct?” “As long as the money is leaving us, no. Now good day Ryan. I wish you the best.”
Auf wiedersehen indeed. I’ll try not to let my ass hit the door on the way out. Maybe MercuryOne will treat me better. Maybe this is my first shit sandwich of the day. Only one way to find out.
***
Office buildings with open floor plans. Huddle huts. Fast casual chopped salad stations. Coffee shops offering almond, cashew, oatmeal, cricket and macadamia milk. Spin classes. Power yoga. Google, Facebook, Chiat Day. The Flatiron District. Feel the Bern.
I’ve just signed in to the WeWork location in the Flatiron. The one on 18th, not the one on 25th. Yes, the Flatiron has multiple WeWork locations. This building is prewar, probably late nineteenth century. Big brick, granite, glass. Steel fire escapes running the exterior like lattice work. Imposing, industrial, the sort of building the Triangle Fire happened at. Immigrants pulling twelve-hour shifts cutting cloth, stitching patterns, getting burnt to death because the doors were locked to prevent workers from taking breaks.
These sorts of buildings are WeWork’s specialty. Strip everything, polish the cement floor, expose the brick, put in some cool light fixtures and then enclose all the go getters in glass coffins that cost three times a square foot more than a normal space runs, but hey no lease and there’s the power of community. All that hustle to inspire you. DO WHAT YOU LOVE. I’ve heard their founder tell me that on planes, trains, escalators, elevators, magazines and podcasts. He is inescapable. If I ever meet him, I’m going to back him into a corner and shout catchphrases at him for five hours just to settle the score. I hope to fucking Christ that St. Peter at the pearly gates is keeping track of the time these assholes take from us. You can’t even pump gas without a screen trying to sell you beef jerky and a 72 ounce soda. When I lose my mind one day and believe me I will, it will be because Steve Wynn welcomed me to Vegas from one too many screens in the back of cabs.
What you don’t catch in the marketing material, what you only learn from visiting multiple WeWork locations is that these buildings cannot handle the flow of people in and out of them. They weren’t designed that way. There are two elevators here. I’m twenty-deep in a narrow lobby getting jostled this way and that as people push their way out and others push their way in. This isn’t cool. Even worse is that I’m only allowed up to WeWork’s lobby on four. Then I hang around another ten minutes while Kelvin Cho from MercuryOne makes his way down to retrieve me and takes me up to their office space on eleven. Remember stairs? I do, and I’ve long since learned there’s no point trying to take them. Every floor is locked with keycard access only. Even the lobby. Try taking the stairs, you’ll end up in the basement of the building staring at a door with a fire alarm on it wondering whether the security guard will fetch you before you lose your shit and set the damn alarm off just to get out of there. Modern day work force control packaged up as protecting us.
Oh God, it’s getting a little tight in here. Hot too. I’m having a hard time breathing. Fuck, this is not a good moment for a panic attack. Breathe in slow, breathe in deep, count backwards from ten. You have a Klonopin in your wallet. Just reach down, squeeze a hand into your pocket. Yup, that’s it. Bring the wallet up against your chest, now open it, fish into the little compartment. There it is, just slip that into your mouth and breathe. Ok, you're cool. Nothing is going to escalate. Check your iWatch, heart rate at 155 BPM, breath in, breath out, see it falling. This is just the lunchtime rush, look the elevator doors are opening, walk ahead with everyone else and there we are inside. By the time you make it to the fourth floor, everything will be just fine. It’s been a year since your last panic attack, and that’s because you’ve handled all these scares so well. Doors are open, step out. Check your iWatch, see that BPM is at 140 and falling now. There’s Kelvin waiting for you. Step right back in, look down at the floor and we’re on our way up to eleven. Everything is fine. This is fine.
You need to stop thinking all those negative thoughts. Even if it’s just shitting on shared office space, don’t do it. Stinking thinking can spill over. Stay positive, Kelvin’s a good guy, this will be a nice easy meeting. He’s probably brought you by to offer you a job.
Thanks voiceover Ryan, can we get back to thinking of ourselves in the first person again? I don’t like it when you disassociate from me like that. We are in this together, a single homogenous unit. Right? Right.
***
Kelvin Cho is indeed a good dude. Our meeting gets off on the right foot. He understands what happened with Icarus, knows there’s no upside anymore, and just wants to say thanks for having provided a critical service to the market. MercuryOne wouldn’t be here today if it wasn’t for Icarus. I got a nice round of applause after his little speech. It’s a good feeling being wanted, appreciated. It’s been awhile since I’ve been in a room this warm. The rest of the hour turns mechanical, moves quickly. Operations, timetables, workaround solutions. Like most of our clients, MercuryOne isn’t sure where to turn next. There are a few other stablecoins out there, including a huge one in Hong Kong, but none of them open their books like we do. There’s risk ahead for these guys, as the volume flowing into crypto explodes, managing their day to day has taken on an increased level of risk.
Afterwards, Kelvin and I retreat to his tiny glass enclosed office. It’s time to talk shop.
“You guys going hedge fund?” he asks.
“Is that what you’re hearing?”
“Word around the grapevine. I don’t blame you. Bitcoin has quintupled this year. What have you seen from that?”
“Personally? I had twenty-five at the start of the year, so a hundred-twenty thousand. Enough to pay those student loans off.”
“Do it.”
I give Kelvin the side eye. No one in this space says sell. That’s the hallmark of crypto. We are all going to the moon together. There’s never a downside. To hear the head of an exchange tell me to sell is something new.
“Where’s that coming from?” I ask.
“Paydown debt whenever possible. It’s the smart move.”
“I suppose. Surprised to hear that coming from you is all. Aren’t you handling record inflows?” “We are working nights and weekends. There’s a three-day backlog to process a new account. On the one hand, it’s great. Every board meeting is amazing. I haven’t had a bad call with a VC this year. On the other hand, the money is starting to get dumb. It’s stopped being true believers, now it’s late retail. Uber drivers, housewives, Joe Six Packs.”
“You know what’s funny Kelvin?”
“What?” he asks.
“I’m in crypto because it’s a ground floor opportunity. All I want is something I can call my own, where I can control my professional destiny. My goal is to not get laid off as soon as someone younger and cheaper can take my place. That’s why I am running a company, job security. We could have been the brick business for all I care. While I am warming up to crypto’s ideals, the newness is what drew me in. I just went with the flow and look where it took me.”
“You aren’t a true believer, and you are launching a hedge fund? Doesn’t that seem a bit dangerous?” “Rising tides Kelvin. Rising tides lift all boats. You’re handling record inflows. This thing is just getting started. Plenty of time for us to get in, get out, and take a piece of the pie.”
“There’s either a real naivete or a real cynicism underneath that Ryan.”
“Why not both?”
“Now you sound like Andy. With Icarus shutting down, have you ever thought about breaking up with him?”
Funny. Kelvin is going to offer me a job just like that voice in my head said he would. The guy could use the help and I suppose it never hurts to ask.
“Kelvin, are you trying to hold my hand?”
“All you have to do is reach out.”
“That’s mighty sweet of you, but I’m spoken for. Now here’s a thought for you. Why not settle in bitcoin? Don’t even bother swapping fiat for a stablecoin.”
“Couple reasons. First is the downside. One day bitcoin is going to go down. You know it, I know it, our new accounts may not, but what goes up must come down. We can’t find ourselves on the wrong side of the ledger. It would be catastrophic. The second thing is even if we are long term bullish, and we are of course, there’s the issue of impartiality. How do we sell off our BTC without competing with our own customers?”
“Sort of like how we need to shut Icarus down before we can launch our fund,” I say.
“Yup, you can’t trade the market while backstopping it. I hope the party makes it to January.”
“Kelvin, there’s ten weeks between now and the New Year. We’ve got time. I however don’t. This is a one day hit and run in New York. I just got back to Chicago and need to be in my own bed for a bit.”
We get up, lean in and hug it out. Kelvin is a big dude, played lineman in high school, I feel it as he presses his shoulder into mine.
“Alright brother, if you ever need that job.”
“Maybe someday, but not anytime soon. We’ve got a good thing going on, I just need Andy to be nimble, Andy to be quick.”
“If Andy is raising the money, then who is your trader?”
“Sorry Kelvin, that’s our secret weapon. No names there, but she’s good, real, good.”