The Metronome (The Counterpoint Trilogy Book 1) Read online

  Until the upstart in the north rose out of empty marshes. St. Petersburg: majestic, imperial, haughty. Proclaiming that Russia’s future was not in the footsteps of Constantinople and Byzantium, not in Asia, but in Europe. Peter the Great wanted St. Petersburg to be the beginning of new, European Russia.

  And for two hundred years the upstart reigned, Moscow relegated to a noisy, dusty has-been. But the city that Peter founded as a leap of faith became a capital of mammoth bureaucracy. In the end, Russia rejected this implant in favor of its natural focus in Moscow. And then the curtain fell between Russia and the West.

  Two cities, three tzars: Ivan the Terrible, Peter the Great, Stalin. Should it be Stalin the Murderous? Three tzars that fought to modernize Russia, each in their own way. All left behind fields filled with the bones of their subjects, not caring how many had to die in their cause. All ruled with an iron fist, believing that their ends justified the means. All, directly or indirectly, killed their own, flesh-and-blood, sons. All fought with Europe: one was defeated, one victorious, the last one got his tanks all the way to Berlin.

  As we land in the Domodedovo Airport, I am again anxious, expecting to be stopped. But no one bothers me as I make my way outside to the taxi line. This time I have to splurge $90 for the ride, but after an hour and a half in heavy traffic, I get to the post office on the Lomonosovskiy Prospekt only twenty minutes before it closes.

  I look around, don’t see anyone following me, then I head in. I wait in line, get to the window, show my Russian passport. The indifferent woman behind the glass goes inside and comes back with a thick manila envelope addressed to me. I recognize my father’s handwriting. With a trembling hand, I sign off for the package, stuff the envelope into the pocket of my backpack, zip it and leave.

  In a hurry to make it to the post office, I had made no plans for my stay in Moscow. I debate for a minute whether to try and fly back to St. Petersburg, but decide that this will be too much for one day. I should find a hotel, eat, read the materials that my dad sent, and hopefully get a good night sleep. Not seeing taxis nearby, I recall that there is a hotel on the Leninskiy Prospekt a short distance from here.

  There are not many pedestrians, and I walk briskly. A group of two men and two women walk toward me, laughing. They stop and loudly argue about where to go eat. The sidewalk is narrow, and I try to get around them on the building side when a strong arm loops around my neck from behind, squeezes, and the lights go out.

  PART 2: UNDER SIEGE

  Friday, June 9, early evening

  I come about from a strong smell of urine. I am sitting in a puddle. There are people standing around me, blocking the light, I only see their legs. Someone says, “Let’s just do him and get it over with!” A voice that sounds familiar disagrees, “The colonel’s orders were to take the package and let him be.” The first voice grumbles unintelligibly, and the legs disappear, leaving me alone. I remain on the ground staring at a sliver of cloudy sky, my chest heaving. A tiny voice in my brain reminds me to slow down my breathing. I try to speak up, but my throat hurts and my voice betrays me. I slowly get up to my knees, holding to the wall behind me. I am in a dark passage between two buildings. My backpack is on the ground by the other wall. I crawl towards it. The external pocket is open, and my father’s package is gone; everything else is still there. The smell of urine follows me. I look back and realize that’s the puddle I was sitting in. My jeans are soaked in some drunkard’s urine. I sit by the backpack, exhausted.

  The pain and throbbing in my throat subsides a bit. It’s getting darker. My breaths are still ragged and my hands shake, but the blind panic gave way to disjointed thinking. I can’t stay here. I can’t go to a hotel like this. I pull my Blackberry out of the backpack. After being gone for twenty years, the only Moscow phone number I still have is that of Yakov Weinstein, my old university professor. I gather my courage for a few minutes, and then dial the number.

  After all these years, he recognizes my voice immediately. I apologize and haltingly explain my immediate situation. He tells me to come out to the street in ten minutes and watch for a blue Toyota. I remain on the ground, thinking of what I will tell him. After about ten minutes, I get up and make my way to the street. I must look and smell awful because a passing woman grimaces and mutters, “Damn drunks!” A small blue Toyota is slowly cruising by, and I tentatively raise my arm.

  The car stops. It’s Anya. Why did he have to send his daughter? I wish for the ground to open up and swallow me. Suppressing an instinct to run away, I walk over, open the passenger door and say, “Anya, I am sorry, it was a really bad idea. I’ll go to a hotel.”

  “Pavel, get in.”

  “I can’t. My jeans are soaked in urine.”

  “Pavel, please get in. We are holding up traffic.”

  As if on cue, cars start honking. I get in, feeling my face turning crimson.

  She says, “I have not seen you in twenty years; I was wondering what you would look like. You still have that strong jaw and at least they did not break those nice full lips. But otherwise, you look like shit!”

  We both start laughing hysterically, so hard that she has to pull over.

  Then she sniffs the air and says, “Yes, we better keep going, get you into a hot bath.” My former professor’s place is only a few minutes away. I steal a sideways glance at Anya. I am 45, so she must be 42 now. The years have been kinder to her than to me: she is slender, almost feline, a wide mouth ready to curl into a smile. The years have left their imprint in the crow’s feet and frown lines on her face.

  Professor Weinstein still lives in a high rise on Donskaya Street, a mile away from the Academy of Sciences. From the balcony of his 15th story apartment, one looks straight at the Gorky Park. If you turn to the right, you see Kremlin. I used to come here regularly. Now, I am awkwardly riding a narrow lift with Anya, guilty and embarrassed.

  But, the professor seems to be genuinely glad to see me, with a smile, a big hug, and a Russian kiss on both cheeks. He is short, like Anya, and has to rise up on tiptoes to reach me. Yakov is in his seventies now; he stoops even more that I remember, and his face is a spider web of lines. His hair is still all there, Einstein-like unruly, only all white now. Yakov studied under the famous Lev Landau and was known in the department for the saying, “That’s not how Lev Davidovich would approach the problem” whenever he disagreed with someone. His wife passed away three years ago; I sent a card but could not bring myself to call.

  Yakov ushers me into a small bathroom with a tub full of steaming water. “I took the liberty of drawing you a bath; undress and get in.”

  I would have preferred a hot shower in a more American fashion, but right now I’ll take anything to get out of these soaked jeans and wash off the smell of urine. I climb in, soap myself, and close my eyes.

  There is a knock and the door slowly opens. It’s Anya. I try to cover myself.

  She laughs. “Pavel, I’ve seen you naked. You’ve gained some weight since then. Here’s something for you to change into.”

  She sets down a set of clothes, picks up the stinky dirty pile from the floor, and leaves. I luxuriate for a few more minutes, but as the water grows colder I pull the plug from the drain, rinse myself, and change into the clothes that Anya left: boxers, white linen shirt, brown pants. They can’t be Yakov’s; he is much smaller than I.

  I come out of the bathroom and go to the kitchen, where the voices are. There I find Yakov, Anya, and a boy of about nine sitting around a small table. Anya introduces him. “Pavel, this is my son, David.”

  She pronounces “David” in an English manner, with an emphasis on the first syllable. David is a shy blond kid with bright eyes, flat nose, and high cheekbones. There is not much of Anya in him, at least visually. Yakov suggests that we should eat now so that David can go to bed, and then we’ll talk. The dinner consists of a salad, meat stew, and potatoes, plus a bottle of vodka for my benefit. Yakov explains to David that I was his student back in the 1980s – “one
of the most talented students I have ever had” – but then I moved to America.

  David’s eyes light up. “Are you working in particle physics? I love physics!”

  Evidently, Yakov had brainwashed him already. I disappoint the boy by saying that I left physics for finance, and he loses interest. By the time we finish eating, it’s dark outside. Anya motions to David, he kisses his grandfather, politely wishes me good night, and Anya takes him away.

  Yakov shakes his head. “Pavel, Pavel, I know it’s not the time, but I don’t see you very often. How could you have traded physics, the queen of sciences, for this pseudo-scientific financial mumbo-jumbo?”

  “It’s not mumbo-jumbo,” I protest. “We use models and sophisticated math equations.”

  “Models? Equations? You can write down all the elegant equations you want, but your theories have the empirical validity of alchemists trying to turn lead into gold. I am 74, and I still stand in awe of trying to discover the God-given laws of physics. They are permanent and exact. You, on the other hand, are pretending that you can precisely model human behavior, which is inherently impermanent and inexact.”

  “It’s not true; we have historical data to base our models on. And we don’t try to predict each individual behavior; we use probabilistic distributions.”

  “Historical data? How can you rely on historical data when the very system you are trying to model is being changed by the application of your models? I’ve seen some of the formulas you use; you just borrowed the heat transfer equation with normal distribution from physics. It works in physics precisely because its laws are permanent. In finance, the human behavior causes extreme events that are not subject to the normal bell curve distribution. Mandelbrot proved it, and you all ignored him because you are now practicing this Stalinist approach of politically correct science, when in reality you are just like Roman augurs, divining birds’ entrails to justify whatever campaign the leaders want. I think you’ve lost your way.”

  Anya saves me by her return.

  “Come on, Dad, you have not seen him in twenty years and that’s what you start with?”

  She turns to me with a smile.

  “My dad does not tolerate betrayal of his first love: physics. But why don’t you tell us how you ended up in a puddle of urine in a dark alley?”

  Grateful for the change of subject, I tell them everything starting with the middle-of-the-night call from Vakunin. Well, almost everything – I skip the part about Sarah. When I finish, Anya pours everyone another small shot of vodka.

  Yakov refuses his.

  “I am too old, you youngsters go ahead. It seems to me that they – whoever ‘they’ are – thought that your dad must have mailed you some information and have been following you in order to get it.”

  “Yes, I think they’ve been playing me all along,” I agree.

  “You said that your dad came to visit you last year?” asks Anya.

  “Yes, he did, in March.”

  “Was that the first time he visited you in America?”

  “Yes. There was a distance between us since my mother’s death. I thought he could do more to save her, to prolong her life. And he did not approve of me marrying Karen, did not come to the wedding. About seven years ago, we took a trip to Europe and came to St. Petersburg. That was the only time we saw him until last March.”

  “How long did he stay with you?”

  “Only a few days. He continued to Los Angeles. I remember taking him to a local travel agency; he had to make a slight change.”

  Yakov has that look of concentration that I remember from classes long ago. “Do you know why your dad flew to Los Angeles?”

  “He said he wanted to see California. I thought he was going to meet Simon – that’s my son’s name – who is going to university there, but they never connected.”

  “And where did he go from Los Angeles?”

  “I presume back to Russia.”

  “And how old was he at the time?

  “He was 80. But he was still in pretty good shape.”

  “So your dad, who is not known to travel internationally, at 80 decides to fly all the way to America, spends only a couple of days with his son, and then goes to Los Angeles where he does not even meet his grandson,” muses Yakov.

  When presented this way, things do look somewhat strange. My father came with gifts of books and kitschy matryoushkas. Karen thought the visit was his way of saying goodbye. I was too busy with a new job to give his actions or reasons much thought.

  Yakov asks, “And what happened with you after that?”

  “What do you mean?”

  “Exactly what I asked. I tried to follow your career a bit; there was something about you managing a money fund.”

  “A hedge fund. Well, after I left academia I went to work on Wall Street as a quant, basically an analyst developing and programming trading models. As a quant, you make an OK salary, but to do well you have to move into trading or, even better, become a hedge fund manager. But it’s hard to become one, as that is everyone’s goal. So, in April of last year, when an acquaintance asked me if I’d be interested in co-managing a fund with him, I jumped at the chance.”

  “Who was this acquaintance and why did he offer you such an opportunity?”

  “His name is Martin Shoffman. We moved in the same social circle; Karen and I went out with Martin and his wife Sarah together a few times and became friends. He was more of a sales person, did not have a strong analytical background. He told me he wanted me as a partner because we complemented each other and the prospective investors wanted to see a well-rounded management team.”

  “And what happened after?”

  “Martin did have investors, although it was really just one large investor putting up the bulk of the money.”

  “Who was that large investor?”

  “It was a Cayman Islands limited partnership, very secretive, we only met their attorneys. But their money was real. Their main requirement was that Martin and I should put our own ‘skin in the game,’ as their attorneys put it.”

  “And you did?”

  “Yes. Martin and I mortgaged our houses in order to put up the money.”

  Yakov is silent.

  “We opened in May with over a hundred million in funds,” I continue. “We’d been doing well for a while, but in February things turned sharply against us. It felt like some of our leveraged positions were being pressured by a large player. In particular, I thought that the housing market was overheated and went against it, but the value of our positions has declined. I wanted to cut our losses, but Martin thought we’d be kicked out as the fund managers and we doubled down instead. The fund lost a lot of money that quarter, and the major investor’s attorneys descended on us. Turns out there was a provision in the funding agreement allowing the majority investor to liquidate the fund for poor performance and to have priority on recovering their money.”

  “What does it mean?” asks Anya.

  “The fund was closed, they took over the assets, Martin and I lost everything.”

  “Everything?”

  “Yes. We mortgaged our houses and put everything we had into the fund.”

  “That was rather risky, wasn’t it?” Yakov spreads his hands in wonderment.

  “Yes,” I admit. “We were afraid of missing our chance at running a fund and risked too much.”

  “Was that a typical provision?”

  “No, it was not. I am not a lawyer, in the initial excitement I did not read some of the fine print, counting on our attorney catching things like this.”

  “Did you have an attorney review the agreement?”

  “Martin did.”

  Yakov wonders out loud. “Your partner gets you into a bad agreement, and then encourages you to take big risks. How much of a partner was he?”

  “I am not happy about his decisions, but he lost his house just like I did. And his marriage broke up like mine.”

  Yakov ponders things for a while.
/>
  “Sometimes you do a physical experiment, and the results neatly fit one theory. Then you do another experiment, and the first theory does not look like such a sure thing, while some of the seemingly random data points in the first set don’t look so random. Your description looks entirely logical. But when I combine it with the events of the last few days, I am not so sure. You may want to recheck some assumptions back in America.”

  He gets up.

  “I am sorry. It’s late for an old guy like me. Let’s sleep on it. As a Russian proverb goes, ‘Morning is wiser than evening.’ Good night.”

  Once he leaves the room, Anya says, “So where are your kids now? You have a boy and a girl, right?”

  “Yes, Simon and Jennifer. They are both at the University of Southern California in Los Angeles. Jennifer just finished her first year, Simon is a year ahead.”

  “Why are they so far away from you? Don’t you have great colleges where you live?”

  “My father-in-law went there and pushed really hard for them to follow. Plus, California’s year-round sunshine was hard to pass on.”

  “Is your breakup hard on them?”

  “On Jennifer, yes. Fortunately, she was in college already. Simon, he grew distant a while ago. Tell me about David.”

  “His father’s name is Jim Morton; he was in Moscow with the American-funded Reconstruction and Development Bank back in the 90s. He has a wife and two daughters back in New York, I am not sure he ever plans to leave them. Jim comes here on business once or twice a year; I don’t think his wife even knows about his son. It’s his clothes you are wearing.”