Chapter 523: Can It Still Hold On?

Late September, New York.

7 World Trade Center.

"...So if we follow the plan finalized last week and schedule the first batch of adjustments for early October, the duration change won’t be too obvious."

Peter Walsh held the phone in one hand while pressing down on several unfolded spreadsheets on the desk with the other.

"We have recalculated the prepayment speed. Given the current interest rate environment, the original assumptions were indeed a bit too conservative, but the impact is still within an acceptable range."

The other end of the phone was very quiet.

Walsh didn’t mind.

He lowered his head, turned a page, and found the mark he had just made on the yellow sticky note next to him filled with numbers.

"The part that truly requires attention is the second phase."

"If you are still planning to complete the entire portfolio adjustment before the end of the year, I suggest splitting up the part originally concentrated in November. We can do one-third first, and the rest according to market conditions—"

He stopped abruptly mid-sentence.

It was simply too quiet on the phone.

Instead, the sounds in the office suddenly became exceptionally clear.

Dozens of phones rang one after another, someone not far away shouted out a price across two rows of desks, and the printer spat out paper sheet by sheet.

In the trading area further away, several people staring at screens raised their heads simultaneously and lowered them just as quickly.

Yet there was not a single sound coming from the earpiece in his own hand.

Walsh frowned, held the phone slightly farther away, and then pressed it back against his ear.

"Charles?"

Still no answer.

"Can you hear me?"

He reached out and touched the telephone line.

"Charles?"

After a few seconds, a voice finally came from the other end of the line.

"I’m here."

Walsh’s hand stopped.

"I thought there was something wrong with the line."

"No."

After saying that, the other person fell silent for a moment.

That pause made Walsh’s previously relaxed expression gradually fade.

He and Charles McCormick had known each other for nearly eight years.

Ever since Walsh was just a young man in the institutional sales department hugging the phone all day looking for clients, the other party had been doing business with Salomon.

At first, it was only tens of millions of dollars a year.

Later it became one hundred million, then two hundred million, and the amount kept rising.

By now, the bond transactions of Northern United Life processed through Salomon every year were long past that initial figure.

The two men had even met each other’s wives.

When McCormick’s eldest son went to college, Walsh even sent a greeting card over.

They rarely needed to deliberate for so long on how to start a conversation like this.

"Peter."

McCormick finally spoke.

"Did you read the newspaper today?"

Walsh was stunned for a moment.

"What?"

"This morning’s newspaper."

"..."

Walsh instinctively looked towards the corner of his desk.

A copy of the Wall Street Journal was pressed right there.

Below it was The New York Times.

On the neighboring desk lay a copy of the New York Post that someone had finished reading, its cover half-pressed by a coffee cup.

"I read it."

Of course he had read it.

In fact, ever since that damned matter broke out, the entire Salomon had practically become the most loyal newspaper subscriber in all of New York.

In the past, the first thing people in the trading department did when entering the office in the morning was to look at the market.

Check out interest rate changes, or see what madness the Federal Reserve was up to again.

Things were different now.

Now, every morning after the newspapers were delivered, the first thing many people did was to search for their company’s name first.

And then pray that today’s headline wouldn’t be worse than yesterday’s.

It’s just a pity that such prayers rarely worked recently.

Today was no exception.

The names of the Department of the Treasury, the Department of Justice, and the Securities and Exchange Commission appeared on different pages once again, with reports surrounding investigations, subpoenas, and Treasury auctions coming one after another.

Even news of clients beginning to reassess their business relationship with Salomon was no longer considered news.

These contents still took up a considerable portion of the newspaper this morning.

And the content was clearly far from pleasant.

Walsh was still wondering how to continue the conversation when McCormick already saved him the trouble.

"Reports say that another institution is re-examining its trading limits with you."

"And it says that the scope of the government’s investigation may continue to expand."

McCormick said on the other end of the phone.

"The Department of Justice hasn’t finished either."

"This morning’s report also mentioned that some people believe your current problems are no longer just a few irregular bids."

Walsh didn’t reply.

Of course he knew all this.

Even knew more than the newspapers did.

At least he knew how many meetings the company had held late into the night over the past few days, and how many people normally never seen kept walking in and out of those offices upstairs.

"Moreover, I also saw a commentary."

"They were discussing, if things continue to deteriorate... can Salomon still maintain its current government bond business?"

After saying that, both sides of the phone fell silent.

Yet the office was anything but quiet.

Telephone rings constantly came from the trading area dozens of steps away.

Someone was standing by a desk shouting prices, and someone else with the receiver wedged between their head and shoulder was talking while gesturing to the person next to them.

Printers and fax machines rang every few moments.

If one simply closed their eyes and listened, today seemed no different from half a year ago.

But Walsh knew it was different.

After a long while, McCormick spoke again.

"Walsh."

"Hmm."

"Tell me the truth."

His tone softened a bit.

"Can Salomon still hold on?"

Walsh’s hand holding the phone paused for two seconds.

Can it still hold on?

This was a question he actually wanted to know very much as well.

Heaven knew whether Salomon could still hold on.

If someone had asked him this half a year ago, he probably would have thought the other person had lost their mind.

This was Salomon Brothers after all!

They did bonds and they did trading.

They provided quotes to some of the largest institutional clients in the world.

How many companies on Wall Street stared at their moves every day, and how many young traders racked their brains trying to get into this building.

Yet now, a client who had cooperated with him for eight years was actually asking seriously:

Will you collapse?

Walsh even had a momentary impulse to retort—

How should I know?

He was just an institutional salesperson.

What did that mess of Treasury auctions have to do with him?

He hadn’t forged client bids for anyone, nor had he touched those damned irregular filings.

The vast majority of people in this building hadn’t touched them either.

But the newspapers wouldn’t separate them.

Clients wouldn’t either.

Now people outside would only focus on one name.

Salomon Brothers.

Thus, troubles stirred up by a few people resulted in thousands of people suffering together.

Walsh hadn’t even seriously thought about this year’s bonus for a long time.

Because the more realistic problem recently had become—

By the end of this year, would he still be sitting here at all?

When layoffs genuinely came one day, the Human Resources Department would never specially draw a circle around his name on the list just because Peter Walsh was completely innocent.

These thoughts swirled around in his mind, but the words actually spoken had already changed into a different appearance.

"Charles."

Walsh adjusted his sitting posture, and his voice regained the steadiness it had when discussing business in the past.

"I won’t tell you the newspapers are spouting nonsense; you wouldn’t believe that anyway."

The other end of the phone made no sound.

"Things are indeed very troublesome, and we have indeed lost some business recently."

"But you should have noticed that things have begun to stabilize over the past few days."

Walsh glanced at another clipping by his desk.

"Saionji has already entered the scene."

"That Japanese person?"

"Saionji Satsuki."

Walsh corrected slightly and continued:

"When she came here for the first time a few days ago, you should have seen the market’s reaction. At least everyone has finally started to believe that someone is seriously considering providing new long-term capital to Salomon."

"Today their professional team has officially moved in."

"Finance, legal, risk, investment—they are all here."

As he said this, his tone also became a bit lighter.

At least these words weren’t entirely meant to comfort the client.

That’s right, they still had Saionji.

The whole company had been spreading this matter since morning.

In the elevators, the coffee room, and on the trading floor, people were talking about it.

Almost everyone knew that the behemoth from Tokyo had begun to truly examine Salomon’s account books.

And at a time like this, having someone willing to seriously look at the accounts was in itself much better than no one caring at all.

"Saionji is a client we have cooperated with for many years, and you also know how much business they’ve done here."

"As long as their official support comes down..."

Walsh paused for a moment.

"Everything will get better."

The phone fell silent again.

Even Walsh himself felt that this statement was a bit too full of certainty after finishing it.

But at a time like this, a salesperson could hardly say to a client of eight years—

Brother, I don’t know either; let’s all pray together.

After a while, McCormick finally spoke.

"I understand what you mean."

"Then what about our plan?"

"Let me think about it some more."

Walsh’s heart sank a notch.

"Charles, we’ve already worked on it for over two months—"

"I know."

McCormick interrupted him, his voice carrying a hint of apology.

"It’s precisely because we’ve worked on it for over two months that I’m calling you first instead of letting the legal department notify you directly."

Walsh’s remaining words were choked back.

"Give me a few days."

"I need to talk to the investment committee again."

"Alright."

Walsh could only reply like this in the end.

"Call me anytime if you have any questions."

"Of course."

The two sides exchanged a couple more words.

The phone call hung up.

Walsh remained sitting in his original posture for a while.

Until another phone next to him rang, and only then did he seem to suddenly react, stuffing the receiver in his hand back into the cradle.

"Dammit."

He cursed in a low voice.

"Even McCormick is like this."

"Then you can consider yourself quite lucky."

Someone next to him chimed in.

Walsh turned his head; across the not-so-wide aisle in the middle, Eddie Morrison had just finished his phone call.

When he pressed the receiver back down, the force was noticeably heavier than usual, and his complexion looked even worse than Walsh’s.

"What’s wrong on your end again?"

"That Pennsylvania account."

Morrison pulled his suit jacket off the back of his chair, draped it over his arm, and reached for the cigarette pack on the edge of the desk.

"Just notified me to temporarily stop making new trades with us."

Walsh frowned upon hearing this.

"Pennsylvania... so they suspended government bonds?"

"If I had only lost government bonds, my mood would still be a bit better right now."

Morrison glanced at him.

"All business has been stopped."

"Bonds, repos, and the arrangement originally scheduled to be renegotiated next month—all put on hold for now. Trades already executed will continue to be settled normally, but apart from that, nothing else will be done temporarily."

Walsh fell silent.

That account had been cooperating with Morrison longer than he had with McCormick.

Over the past few years, although the other party couldn’t be considered Salomon’s largest client, they had always been quite stable, rarely changing arrangements suddenly just because of some disturbance in the market.

"How long did they say they’d stop for?"

"That’s the worst part."

Morrison stuffed the cigarette pack into his suit pocket and twitched the corner of his mouth.

"The exact words from their legal department were ’temporary.’"

"And translated into English, that means—who the hell knows when it will resume."

Walsh was silent for two seconds, looking at Morrison for a good while.

"Looking on the bright side, at least you don’t have to guess what they mean."

"Yeah, that really counts as good news, I suppose..."

Morrison smiled helplessly, then patted the cigarette pack in his suit pocket and gestured toward the outside.

Walsh immediately understood, and also took out cigarettes from his drawer.

"Let’s go."

The two of them left their workstations one after the other.