It was 4 P.M. on July 26, 2007, and the markets had just closed. Credit Suisse, the billion-dollar Zurich-based bank, had shut down the block in front of its digs at Madison Avenue and 24th Street in Manhattan. Beer and soda chilled in giant tubs.food stations slung burgers, hot dogs, and gourmet barbecue from restaurateur Danny Meyer’s Blue Smoke. A cotton candy machine gave the grown-up affair a kids’ carnival vibe. The early evening’s entertainment: the bank’s own band ofemployee-rockers, Aged Inventory, who were setting up their various vintage instruments.
Most of the musicians were part of the elite team of 300 or so bankers who handled Credit Suisse’s fixed-income investments — the types that fueled the recent economic meltdown. Even David Bowie turned his yet-tobe-earned royalties into immediate cash in 1997 when he sold his “Bowie Bonds” to Prudential Insurance Company for $55 million. But among the most lucrative chunk of the fixed-income market were bonds backed by the mortgages of everyday homebuyers. They had qualified for the loans, after all, and every month they wrote checks to their mortgage companies. Housing was booming, and no one was thinking about foreclosure, least of all mortgage lenders, who found new and improved ways to approve loans (without down payments or qualifying credit even — so-called subprime loans), or the traders who earned six- and seven-figure salaries selling the mortgage-backed bonds to insurance companies and hedge funds.
For Credit Suisse, the fixed-income division was a cash cow, and its traders were some of the highest paid in thecompany. The street party was a way to say thanks to the division’s employees, including Aged Inventory singer Allen Oppici and guitarists Steve Kaiman, David Smith, and Jack Cook. Drummer Tom Graf was a client. Singer Carla Hall started in fixed income and later moved to human resources. Sax player Jason Weyeneth had worked in fixed income at Credit Suisse until 2006, when he left for a hedge fund. Bassist Tom Mullarkey sold leveraged (high-risk, high-priced)loans to companies already in deep debt. Trumpet player and keyboardist Mike Marriott, the ranking banker in the band, ran his own group within the division, focusing on residential mortgage-backed securities, which, he says, included toxic subprime loans.
Normally, traders would have found any excuse to slip away from their desks before the closing bell and groove to Aged Inventory’s covers of “Thunder Road” or “(What’s So Funny ‘Bout) Peace, Love, and Understanding.” But July 26 wasn’t a normal day. The Dow Jones Industrial Average, the overall indicator of market health, was in a free fall. Down as many as 450 points at midday, it closed at a whopping loss of 310 points. “By 4 p.m., the markets were just in a complete shit storm,” Marriott, 47, remembers vividly two years later over beers with other band members at Dos Caminos, a restaurant across the street from the party site. “People came down to, like, power-drink a six-pack.”
The day’s plummet wasn’t an isolated incident, either. In February ’07, the Dow had suffered its greatest dip since the 9/11 attacks — 416 points. The warning sign went mostly unheeded. July’s loss came courtesy of a typhoon of bad corporate borrowing, a stagnant housing market, and more foreclosures on loans that never should have been given in the first place. As the sun set on the party, Aged Inventory (named for a bond that sits on the books for 60 days or more) played the B-52s’ jaunty “Love Shack.” Twice.
“I have a picture from that day, and everyone has long faces,” says Cook, 43. “Usually we’re pretty upbeat, but we were just going through the motions. It was pretty evident that something bad was coming over the hills.”
Summer 2007 turned out to be the high-water mark for Aged Inventory. For the better part of the naughts, they had happily sucked on the corporate travel-and-entertainment teat, playing graduation parties where the band members, who were mostly married with children, would show recent business-school grads that Credit Suisse still afforded its tireless traders time to rock. They played charity fundraisers in front of a Credit Suisse banner. But mostly they chased the rock’n’roll dreams they’d abandoned for well-appointed Manhattan apartments or houses in the suburbs. “I think we all have a piece of us that wishes we did something else,” says 44-yearold guitarist Kaiman. “You’d hate to wake up 60 years old and think, ‘Shit, I never played guitar. I never played drums like I wanted to.'”
Almost all of the Wall Street band members I talked to for this story brushed off the suggestion that they helped drive the economy into the ground. But during the boom, many of them raked in seven figures trading bonds on the backs of people with mortgages they couldn’t afford. When borrowers defaulted en masse, often losing their homes, they effectively killed Wall Street’s fantasy band camp, too. Groups that had always played for free suddenly joined the horde of musicians who compete for gigs and even pay to play. Face to face, these traders were fun-loving, thoughtful, hard-working guys who really believed that they, too, were victims of the recession. None of them seemed in the least bit evil. But for years, they were runnin’ with the Devil.
Read more about corporate rock in the Nov. 2009 issue of SPIN, on newsstands now.