16 June 2013

The Digital Detective, Wall Street part 1

by Leigh Lundin

Low Crimes and High Finance

I learned a couple of curious things when I worked at IBM’s Wall Street Data Center. One was that my friend, Curtis Gadsen liked mayo sandwiches and fleecy-legged girls. The other was my friend Ray Parchen could be fooled because he was too good at his job as a mainframe computer operator.

IBM 360 mainframe
IBM 360 computer room
Like an old-time stoker fed the fires of furnaces and steam engines, an IBM operator stuffed the huge machines with programs and data. Very good operators could act and react instantly without thought, confident in their experience and skills, mounting discs and responding to messages as they'd done ten thousand times before, giving them no more thought than donning their underwear in the morning. The keyword was efficiency.

Unintimidated by hulking computers the public suspected were semi-sentient, Ray worked quickly and accurately, and for that reason, he held down the first shift position. For him, I wrote a silly little psychological program that worked only with the best.

Amidst weighty programs queued for the giants of Wall Street, I slipped in the prank while a dozen employees gathered outside the computer room’s glass wall, waiting for the small program to do its thing: It made discs chatter, tapes whirr, lights blink, and the data center rumble as if Colossus was taking over the world.

We watched Ray bend over the console, reading the first mundane message:
05483A Press ENTER.
Ray pressed the ENTER key. The machine responded with another message:
05483A Press ENTER hard.
A few of us watched from outside the computer room as Ray hit ENTER again. The machine came back with:
05483A Press ENTER harder.
Ray punched the ENTER key, and a couple of the girls giggled. The computer responded with:
05483A Press ENTER even harder.
Ray smacked the key hard, very hard. The machine responded with one last message;
05483I Did it occur to you I can’t tell how hard you press ENTER?
Ray looked up with a red-faced grin and spotted us chuckling. Afterwards, he joined us for a drink where we argued why the program fooled some and not others.

Of course he knew pressure couldn't be detected, but he hadn't engaged his knowledge hidden behind the wall of his expertise. I would discover this common quirk could be exploited, as Simon Templar might say, “by the ungodly.” As noted in the article about kiting, confidence men take advantage of confidence.

Over the next few days, we tried our little joke on other operators and observed this interesting fact: Only the best fell for the stupid little prank. Novice operators stopped, studied the messages, and tried to look them up.

Ray and the other top operators reacted immediately and without thinking. Self-assured of their abilities, they acted instinctively by rote.

Less experienced operators questioned everything, including themselves. We caught more than one systems engineer trying to look up the bogus message number in the reference manuals and they sometimes called for help. That spoiled the little program.

Lesson: Sometimes it’s easiest to fool the most experienced.

There’s a reason I tell this story. It leads to how I became sort of a detective, a digital Dashiel of a Continental Op.

Over the next few weeks, I'll talk about an accidental career as a investigator in a field yet to be invented, that of computer forensics. I reveled in the chase, but my career often hung in the balance under threat of firing, even blackballing. Often the only reward was termination but hey, that happens to all the best private eyes.

Background Noise

An early case exploded with little of my own involvement, or, perhaps because of my lack of involvement. The players: Walston & Co, the nations third largest brokerage house, and Arthur Anderson, the biggest of the Big Eight accounting firms until participation in the Enron scandal brought about its demise. Anderson had dirtied its manicured fingers long before Enron arrived on the scene.
Lower Manhatan Financial District
Wall Street and Financial District

Search the internet for Walston & Co and its Wikipedia entry merely reads "(Walston) was acquired by Ross Perot following pension account fraud and then merged it with Dupont, which had found itself in financial difficulties." Here's the story behind the story.

Despite the Wikipedia gloss-over, the wheels of merger with F.I. DuPont began turning before revelation of Walston’s fraud. Fifteen million in securities had vanished from DuPont’s accounts. The White House grew nervous. Wall Street threw up its collective hands, Oh woe, what to do, what to do?

A Texan rode into town, Ross Perot. He’d bulldozed through the insurance industry (an intriguing inside tale of its own) and encouraged by Felix G. Rohatyn, he made his move on Wall Street. For an initial $30 million, the impossibly old, impossibly young forty-year-old Napoleonic Perot acquired control of one of the Street’s most prestigious houses. (N.B: Regrettably, Time Magazine articles referenced herein require a subscription.)

At the time, that seemed background noise for me, a full-time employee and a full-time student, living paycheck to paycheck and barely sleeping. I couldn't guess how it would alter my career.

Trinity Church from Wall Street
Trinity Church framed
by Wall Street

Crime on the Street

In the Financial District, denizens simply call Wall Street 'the Street'. Philosophical sorts read a moral into its long, narrow confines, noting it begins at a church and ends at a river: When times get tough, in depression or desperation, one may choose salvation or suicide.

The Street fosters its own culture. On the one hand, a man’s word is his bond– multimillion dollar transactions hinge on verbal promises. On the other hand, huge regulatory holes allow brokerage houses to commit the sleight-of-hand that brought the economy to its knees ten years ago. We can’t say we weren’t forewarned, but in the heady days of deregulation, greed and giddiness carried the day. We never seem to learn industries cannot police themselves.

One of the first observations of the Street is that the market's moody– it reacts, even overreacts to political news of the day. But I stumbled upon other emotions, which included surprisingly little hanky-panky. A few notes from the era:
Francine Gottfried
Miss Francine Gottfried

  • Wall Street can be a mad marketplace when the economy's in a lull. Late one summer, a sweet keypuncher named Francine Gottfried caused a sensation with the mostly male lunch crowd as her 43-23-37 figure bounced down the steps of Chemical Bank & Trust. For a few days, a sort of silly mating season reigned and then, as so often happens, her 15(0) minutes of fame were up.

  • Once, as I strolled with my boss down the street, we encountered a beggerman squatting on his flattened cardboard. My boss stopped and chatted with this derelict before moving on. I didn't say anything but he confessed: The homeless man once worked as a broker, what Wall Street called an account executive or AE. When my boss and the man’s wife carried on an affair (and subsequently married), this man– the husband– collapsed in despair. He now lived– literally– on the Street.

  • During the 'Hard Hat Riots' (then called the Wall Street Riots), I picked my way through roving construction workers from the rising World Trade Center left by police to run wild, bashing kids protesting the war in Vietnam. On my way to school as police idled, I helped a girl and her boyfriend bloodied by a musclebound thug. It was no contest: the canyon-like Street corralled the teens, leaving them easy pickings by hardhats with pipes and wrenches. That wasn’t one of Wall Street’s prouder moments. Hard-hats went on to attack the city's mayor's office, smashing the face of one of his aides.
The Young and Restless

A precocious if unaware teen, I worked as an IBM shift supervisor in their Wall Street Data Center, Number 11 Broadway. I had the greatest boss, a pretty blonde named Judy Kane. We boys loved her; the girls– not so much.

And I loved software, the machine-level bits and bytes and Boolean stuff. A teenage mad scientist, I found computers a giant puzzle, one I learned to solve and control. It was a battle of wills, me versus machine, immersive therapy for a broken heart (but that's another story). I'd come to know these Daedalus creatures like a mother knows her own children; better even, I'd learned their DNA.

A sales rep, Herb Whiteman, discovered I spent weekends camped in the computer room, teaching myself to program the huge monsters, then catnapping on the couch as the computers blinked and toiled, compiling my routines. Herb asked if I’d be interested in joining a three-man team that would change Wall Street and put video terminals on broker’s desks. Argus Research, the parent company, would double my IBM salary.

The company gave us secretaries and an entire floor of offices, no expense spared. Unfortunately Argus, in the business of prognostication, shortly deduced the economy teetered on the brink of recession and pulled the plug. Not long after Walston & Company hired me as their fancy-pants systems programmer offering tuition reimbursement as part of my hiring package. Me! I was just a kid from nowhere.

Thus began my introduction to low crimes and high finance.

Stay tuned for more next week, Wall Street's big boys and big crimes.

9 comments:

Fran Rizer said...

Leigh, being computer challenged as I am, your words today were very informative to me. One thing that struck me personally was the joke you played on Ray. When teaching, I collected "Little Johnny" jokes. When I retired, I began researching mortuary science and practices and have been rewarded by good friendships with people who work in the business, so close that they share funny stories with me. All this indicates to me that there are jokes and funny stories in and about most professions.

Your anecdote of the man on the Street who wound up there after his wife had an affair with his boss and eventually married him shouted to me--GREAT SHORT STORY IDEA. Isn't it interesting to consider the endings each of us would put to that story? I think my version would end with the boss learning his wife's having another affair, becoming devastated and losing everything. I'm not sure, but the first husband might kill him at the very end.

Like I used to tell married men who hit on me when I was a young divorcee, "No, thanks. I go by the motto that a man who will cheat WITH me will cheat ON me."

Dale Andrews said...

Ahh. Sounds familiar. My first job (well, other than that one as a guide at the National Museum of Transport in St. Louis County) was as a programmer analyst with McDonnell Douglas Automation Company. we designed programs that ran Medicare claims in about half the states -- an upstart named Ross Perot had the other half. The last system I worked on before bailing for law school was an automated processing package that allowed claims adjusters to (gasp!) input data directly at their desks and then process the claims in real time using a keyboard and CRT screen.

So how come so many programmers (at least around here) ended up also writing mysteries? I think it may have been because the yes/no decisionals that are the basis of programming are the same sort of yes/no decisionals that are the basis of the deductive process in detective fiction.

Looking forward to the next installment, Leigh!

R.T. Lawton said...

Leigh, like Dale said, I'm looking forward to the next installment and whatever happened back then.

As for data processing tricks, a couple of us soldiers once found that data processing machines in military vans were often plugged into wall sockets controlled by a wall switch near the front door. Thus when an operator dropped a stack of punched IBM cards into a sorting machine, we would wait until he took a step away, then throw said switch. The cards quit sorting. When the operator stepped back to the machine and was about to touch one of the controls, we threw the switch again and the cards sorted. When he stepped away again, we threw the switch again. Back and forth the operator went in a weird dance of body motions trying to control the machine. Some operators could be maneuvered into strange gestures to keep the cards sorting. Fun is where you find it.

Louis A. Willis said...

I too am looking forward to the next installment.

I'm also looking for a writer, if one hasn't done so already, to create a robot PI to find the gremlins that keep messing with my computer.

Leigh Lundin said...

Louis, the robots could double the trouble!

RT, I’ll just bet there were weird gestures. (chuckling) Probably lots of sign language once they realized what was happening.

Dale, a colleague and friend, Billy Fenwick, happens to be John Floyd’s best friend. I think it was he told the real story behind Ross Perot’s climb to success… which hardly matched the legend.

In my case, I love puzzles, so I think that’s why I was initially drawn to mysteries. And to write mysteries or computer programs takes logic and a sense of architecture. In other words, either takes a weird mind!

Fran, the guy on the cardboard was sad. I think when everything he held dear collapsed, so did the man. And yes, once a cheater… I think the pattern’s set.

Eve Fisher said...

Great post!
Experts can be played in many areas - my father was a tournament level chess player (back in the old days, before computer games, etc.), and taught me to play. Well, the only way I could stay alive in a game with him was to come up with "unorthodox" (but strictly legal) moves. I used my bishops and my knights in ways that no chess master ever did that he'd ever heard of. The result is that once in a blue moon, I won. And, playing other people, I win a lot more often than I should...

John Floyd said...

Leigh, I think you're right: mystery writing and computer programming are fields that require a weird mind. Those of us who have done both . . . heaven help us.

Leigh Lundin said...

John, it doesn't sound like there's much hope for us! And say hi to Billy.

Eve, I was tempted to use the word 'over-confidence', but that's not a fair assessment of people who've expertly learned their disciplines. And thanks for reminding me not to bet when playing chess with you!

Dixon Hill said...

Ah, chess for cash...I think Bogart earned some side money by doing that at one time in his life.

I love these posts, Leigh! Keep 'em coming, buddy.

--Dix