The Wangs vs. the World Page 11

  His collection of vintage comedy albums—Richard Pryor, George Carlin, Lenny Bruce—and extra clothes were neatly packed into a cardboard box taped and labeled with Saina’s address in upstate New York. Grace said that she’d just given away all of her other clothes, but that seemed like the worst decision if they were going to be poor now. It would only cost something like forty dollars to mail everything, otherwise he’d have to buy new clothes; he couldn’t just wear the few things that fit in his duffel forever. Andrew wondered what had happened to his snowboard and gear, to everything in his room at home. Probably nothing. Probably it was just sitting there, locked up, and if he could just climb through a window and break it out, it could all be his again.

  He was sitting on his naked mattress, holding Emma’s spiky heels in his hands, looking at his bare walls, when his alarm went off.

  9:15.

  Fifteen minutes before Econ 201. Most Monday, Wednesday, and Friday mornings he hit snooze at least once, which made it 9:22 by the time he rolled out of bed. Another five minutes to brush his teeth and take a piss, one to choose a pair of sneakers, eight minutes to walk to class, four for an egg-sandwich stop, another five to say hi to people along the way. By the time he got to class, it was usually 9:45.

  But not this morning. He pressed snooze, put down the heels, picked up his backpack, and walked straight to class, not even pausing to talk to that cute Pi Phi girl who’d smiled and said, “Good morning.”

  It was weird being there so much earlier. Who knew that so many people got anywhere on time? A solid five minutes before class started, the hall was already three-quarters full of fed, caffeinated students with laptops at the ready. From his unaccustomed vantage point in the back—usually he had to slip into one of the last open seats right in front of the lectern—Andrew could see that almost everyone was on Facebook, clicking through photos from last night.

  The professor finally walked in at 9:40, carrying a cardboard box. Andrew knew it. You really didn’t need to get to things on time. Not only had he not missed anything with all those added seven minutes of sleep, he’d probably tacked an extra year onto his life because he was more well rested than everyone else. Mental note: Stop wasting time worrying about being late.

  “Make no mistake, we are in a recession,” said Professor Kalchefsky slowly, holding up a copy of the Wall Street Journal. He read the headline: “‘U.S. to Take Over AIG in $85 Billion Bailout.’ You heard it here first. No one is willing to admit it, but we are smack-dab in the midst of a giant, ball-breaking recession, and every one of you ought to be furious because you are the unfortunate generation who will be graduating and trying to obtain jobs in a busted economy that we might as well pack up and sell to the Chinese.”

  Andrew opened up his laptop. He wasn’t sure why he was even there, but if he was in class, he might as well take some notes. People liked jokes about the economy, right?

  Kalchefsky 201, he typed.

  Recession.

  W. T. F.

  Oh shit. He was going to have to work! Actually work. At some uninspired, uninspiring job. Maybe with an apron on. For money. Money that he would need to pay for things like rent and phone bills and air-conditioning—or maybe air-conditioning was free? It seemed like one of those things that should be a basic human right for people living in the Southwest.

  Forget it. He wasn’t going to leave. After class, he’d call Saina and ask her to pay his tuition, then he’d call and tell his dad not to come, tell him that they could stop by for a visit if they wanted, but maybe suggest that they just drive past Arizona altogether. Andrew wanted to skip out on Econ and call everyone immediately, but if he was going to finish school and then get a job, it was probably time he started doing better in his classes.

  And Emma. He’d bring her shoes back tonight and tell her that actually he loved her. He did. He must. Definitely. Why was he always trying to be such a good guy all the time, anyway? Nothing stayed perfect forever. Being a good person hadn’t kept his mom from dying. Being some kind of business star hadn’t kept his dad from messing it all up after all. He’d make himself love Emma, and then he’d finally get to have sex.

  Kalchefsky was writing on the board now.

  Our first big mistake—we believed that money was rational.

  Andrew sat up. Kalchefsky was a mess. Stubble and dark circles. Some sort of yolky residue on the corner of his mouth. Cuffs undone. He looked like an older person, a tired adult. Like he’d gone from being somewhere around Saina’s age to Andrew’s dad’s age overnight. More than that, though, he looked wired—pissed off and strangely awake, his slight Eastern European accent suddenly strong.

  “The market doesn’t lie. How many times have you heard people say that? The market doesn’t lie. People who have no business knowing what the market is capable of are nonetheless convinced that it is somehow bound to the truth. That things will always cost exactly what they should because of some sort of free-market fairy dust. Why did shares in the East India Company trade for £284 in 1769? Why did a single streaky tulip bulb fetch the equivalent of more than £25,000 at auction in 1637? I’ll tell you what—it’s not because people used to be dumber.”

  With that, he picked up the cardboard box by his feet, held it over his head, and gave it a desperate shake, releasing a shower of purple stuffed animals. The class burst out laughing. Beanie Babies! Andrew had one when he was a kid—a tie-dyed bear from some client of his father’s. Kalchefsky picked up one of them and held it out to the class, squeezing its soft plush body.

  “A Princess Di Beanie Baby, $2.50 plus $.99 shipping and handling on eBay. But go on there right now and you’ll find an auction where one of these guys is listed for $45,000. Forty-five thousand dollars! For a little purple toy bear with a white rose sewn on its chest, mass manufactured in a Chinese factory.” Kalchefsky shook his head violently, his shaggy hair flying, as the class laughed.

  “I bought all twenty of these on the same day, which was enough to set off a rumor that Beanie Baby prices were back on the rise. Here’s what one Beanie Baby message board reported.” He looked out at the class and slowly raised an eyebrow. “Oh yes, they still exist. For a furry few, the dream lives on.”

  Kalchefsky picked up a piece of paper and peered through his glasses. “And I quote, ‘OMG. What up, doubters. Looks like a new wave of collecting has been unleashed—eBay trackers say that Princess Di Beanie sales are up 1,100 percent. Time to buy, bitches.’”

  Andrew let out a laugh.

  “Throughout history we have believed that markets determine worth and that bubbles are eternal, despite ample evidence to the contrary. In the midst of each bubble, we believe that this time it will last forever. We have all been complicit in our own deluding.”

  The professor paused.

  “It’s all bullcrap. There is no market. The market is people, and people are dolts. Even the smartest people are moronic. You’re all a little too young to remember that there were people—educated people, people with serious careers—who chased down ‘rare’ Beanie Babies. Who bought heart-shaped plastic-tag protectors. Who told themselves that their massive collections of plush toys would pay for their children’s college tuitions.

  “In fact, you were those children, and I’ll wager that none of you are being floated in this fine institution with proceeds from Beanie Baby auctions. We all mocked those assholes, but their only mistake was that they chose to believe, as we all have, that money is rational. That price is truth. That the market doesn’t lie. But it does. It lies. Or, at least, it will stretch the truth for a very, very long time.

  “Real estate. That’s our present-day delusion. More than that: Mortgages. Because a mortgage is never just a mortgage, is it? It’s a promise. A promise that your life can change. A promise that you can be the sort of person who should live in that house no matter how far it is from your real price range. And let’s be truthful, shall we? What is a promise like that but your world-famous American Dream?”

  Kalc
hefsky looked out at the class, breathing hard, jaw clenched, like a wolf in some sort of intellectual standoff over a carcass. “You can grow up to be anything you want. Isn’t that what they told you? Your mommies and daddies in the front seat of their SUVs while they were driving you, their special snowflake, to soccer practice? Except that you got it mixed up and thought that it meant ‘You can grow up to own anything you want.’ Not the same thing, America. Nowhere near the same thing.”

  Maybe Saina was right.

  Maybe people from other countries really did hate Americans.

  Why was Kalchefsky being such an asshole? How surprised would he be if he knew about Andrew’s SUV, how it had just been towed by a shiny black truck with gold fangs painted on the grill, the keys pocketed by a wiry repo man Andrew hadn’t even bothered to argue with? If he knew that Andrew had owned everything he wanted and that now maybe he was going to grow up to own nothing at all?

  Crack! Kalchefsky slammed a palm down on the lectern. “And what people want to own, of course, is real estate. So a dental hygienist with bad credit making forty thousand dollars a year felt that she deserved to park her ass in a million-dollar home. With a little creative financing, and as long as housing prices continued to rise, she believed that she could afford a million-dollar home. And as long as the dental hygienist continued to pay interest on the mortgage for the million-dollar home, as long as housing prices continued to rise, as long as more loan officers approved more loans for more dental hygienists with bad credit who could continue to pay the interest on their overblown mortgages, housing prices would indeed stay stratospheric, and banks could print money based on that certainty. And, like your nursery rhyme, that was the house that Jack built.”

  Kalchefsky picked up a marker and slashed at the whiteboard, then moved aside so that the class could see what he wrote.

  Our second big mistake—we thought that risk could be quantified.

  Our third big mistake—Alan Greenspan.

  The class giggled. “Oh no,” he said, shaking his head at them menacingly. “It’s not funny. It’s not something that any of you should be laughing about unless you’re so rich you don’t have to care. Alan Greenspan is going to go down in history as a social-climbing, self-hating, Ayn Rand–loving, Zionist fraud. You just don’t know it yet. But I do.

  “But before we break down Greenspan, let’s look at our second big mistake,” he said. “Does anyone know the name David X. Li?”

  Andrew looked up. Kalchefsky was writing it on the board: David X. Li, which meant that he was probably Chinese. If it was Lee, with two e’s, then it could have been a white guy instead.

  “Learn it. Remember it. He’s going to go down in the history books as the accountant who took down America.”

  Kalchefsky’s losing it, Andrew typed.

  Character? Crazy prof vs. whole world is against him? Recurring. Goes downhill through set, thinks club is lecture hall. Meta, meta, meta.

  “Ole David X-marks-the-spot Li. A Chinese swashbuckler who rode into town and duped the entire American financial system into believing that he could lasso risk.” Kalchefsky turned and wrote on the board:

  Pr[TA<1, TB<1] = ϕ2(ϕ-1(FA(1)), ϕ-1(FB(1)), γ)

  Whoa. How did he just reel that off? Impressive.

  “You know why the dental hygienist got the mortgage for her million-dollar home? Because of this formula. You know why AIG needed a bailout? Because of the ways that Wall Street tried to profit off of that mortgage. You know why Wall Street thought that they could make millions off of the millions of people across the country with bad million-dollar mortgages? Because of this formula.

  “The thing is, no one on Wall Street can make sense of this thing. I can’t make any real sense of it, and I grew up in a country that took math seriously, unlike America, where you just study the Top 40 pop hits of math. All you know is the Pythagorean theorem. Avogadro’s number. Eureka and apples on the head. So how can any of your finance guys possibly be expected to understand something even slightly more complex than A2+B2=C2?” He turned around again and skewered the formula on the board with arrows. “This is the Gaussian copula. Named after Carl Friedrich Gauss, one of the greatest mathematicians ever to live. What this particular formula does, as I’m sure none of you know, is correlate variables that seem unrelated, predicting a connection between them. Li didn’t invent the copula, but he did bring it into the finance game, and he was the one who made the crucial second mistake, which we all get to pay for: He made us think that risk could be quantified. And he thought that corporations were like people. Like people! Because before David X. Li rode into the canyons of Wall Street, way back in 1997, he worked on the broken-heart syndrome, which is a very real phenomenon that none of you have the experience to comprehend. True, dedicated love. Love beyond the grave. Take a couple: Whitehairs, oldsters, married for fifty years. One of them dies and odds are the other one is not far behind. They die because their heart is broken and they’re alone, and glorified accountants like David X. Li had to go in and meddle with the beauty of that because they wanted to figure out a better way to price life insurance policies. The antithesis of beauty, no? Those accountants developed a method whereby they could plug in various pieces of information and churn out one number: A likely date of death. David X. Li took one look at this and decided that with a few modifications he could use it to churn out another number entirely: An entity’s likelihood of default.

  “If you’ve been paying any attention at all this semester, you know what is at the center of all studies of economics: Risk. Harness the risk and you’re minting money. Let the risk run you and you’re sunk. So, naturally, when David X. Li came along and said that he’d found a way to quantify risk, every hedge funder and bond trader out there was ready to hop aboard the Orient Express. He created a formula that he claimed could solve Wall Street’s biggest problem, without any complications, and set it loose in a field of greedy, shortsighted bastards.”

  Andrew’s hand shot up. It was a surprise even to him.

  He was all the way in the back of the room, so he shouted. “Professor Kalchefsky!”

  The professor paused. Looked up at Andrew. A poisonous, tired look.

  Andrew stood up. “Why is it David X. Li’s fault? I mean, I don’t think it’s his fault. He didn’t force anyone to use it, right? The . . . what’s it called? That formula? He just wrote it. He didn’t say that everyone had to use it.” Andrew paused, waiting for the professor to agree with him. He was right, he knew he was right.

  “Force? No, he didn’t force anyone to use it. And no one forces children to pester their parents for the sugared cereal that’s packed with their favorite action figures; no one forces young women to starve themselves anorexic so they can look like a billboard. No, Li just created a formula he claimed could solve Wall Street’s biggest problem. But he’s perfectly innocent, perfectly. You know what else he’s innocent of? Besmirching Carl Friedrich Gauss’s good name. Gauss deserves to be remembered as the prince of mathematicians—his work impacted the fields of astronomy, optics, differential geometry, all the ways in which we observe and understand the physical world—but in democratic America, his name will forevermore be associated with financial ruin. And that’s not the inscrutable David X. Li’s fault either, is it?”

  Andrew rolled his eyes. He couldn’t help it. Inscrutable was such a lame dig, it was barely worth protesting. “Are you getting scared yet? Are you finally sitting up and thinking about something besides keg parties and sexting? You know that Li was trained in China’s most respected university, the Harvard of Tianjin, and that the Communist government encouraged him to set sail for North America? How do we know that he wasn’t working for them from the start? Right now China owns 8 percent of America’s debt. How do we know that this wasn’t all a plot hatched in the honorable Deng Xiao Ping’s official opium den?”

  “Oh come on!” The voice came from somewhere on the edge of the room. Andrew turned, along with everyone else in the cla
ss. As Professor Kalchefsky got more and more riled up, the guy next to Andrew had taken out his cell phone and started recording surreptitiously—now he held it up, tracking the room like a periscope, trying to figure out who was talking.

  The voice kept on going. “Okay, let’s just say that it was a plot, right? Doesn’t the West deserve it? Maybe this is just payback. Fact! In the year five hundred something, Christian missionaries stole China’s silkworms and used them to prop up the Byzantine Empire for a thousand years. Fact! In the late thirteenth century, Marco Polo went to China and learned about pasta, and now everyone thinks the Italians are the last word on spaghetti.”

  It was Mark Foo. He was a militant Asian kid, not the kind of guy Andrew usually hung out with. Foo Man Chu was always organizing protests and group dumpling dinners; he was the kind of guy who made up names for those Asian girls who always dated black guys (the current frontrunner seemed to be “chocolate banana”) or white guys (“lemonhead”); he was president of the Asian American Student Association.

  “Payback for ancient crimes. Alright, let’s call it that. A karmic kung fu kick to the balls. But you know who’s getting kicked in the balls? Is it the descendants of those missionaries? The Anglo-Saxons who profited from that original theft? No, they remain in their Martha’s Vineyard mansions, eating lobster and fighting over who gets to give Bill Clinton handjobs. And who really gets jacked off? ME!”

  The professor grabbed at the newspaper that he’d held up at the beginning of class, crumpling it in his fist. “Do you know that I make as much each month tutoring rich junior high schoolers in calculus as I do as an adjunct professor? The whole economic mindset of America is warped. Your parents are willing to pay five hundred dollars per credit hour to get you through a good college—if this can be considered a good college, which it isn’t, which means that your particular parents probably didn’t open their wallets wide enough—and the actual professors you came to learn from are barely being given a living wage. In fact, there are so many people who want to go into academia that they could just as reasonably not pay us at all, yet here I am, training my replacements. Academia begets academia. Yet, despite my paltry pay, I managed to accrue a plump little nest egg and now, without warning, it is gone. Wiped out.”