the insurance companies. It might be the best investment opportunity ever, backed by the Supreme Court ruling, so there’s no chance the insurance industry can lobby Congress to have laws and rules changed. The insurance companies are going to pay every penny the policies have accrued.”
Russell suddenly stopped, out of breath. Russell and Edmund looked at Gloria, who stared back for a couple of beats. There was silence.
“Don’t you see it?” Russell questioned.
“ I see it,” Gloria said. “You’re the ones who don’t see it.”
“It’s real. We’ve run the numbers up and down and confirmed it with all the actuarial companies. It’s real. We’re already holding fifty thousand policies—”
Gloria whistled. “How much are the premiums on fifty thousand policies, Russell? You must be paying out about four, five million a month. You’re going to run out of capital by the end of next year if you don’t start having significant income.”
Russell and Edmund knew she was right. That Gloria was smart was not news to Edmund; he wouldn’t have hired her otherwise way back when. But in this instance they’d be fine, they were going to be fully capitalized by the end of this year. He wondered if Gloria might be bluffing and was beginning to think she was. So far she’d given them nothing. He was getting tired of this.
“Gloria. All you’ve told us is that we are mean, heartless bastards taking money from old ladies,” Edmund said. “But we knew that already. I think you’re fishing. You told some guy you were shorting us knowing it would flush us out, and we’d come down here and explain our business plan. Which we have done. Congratulations. Now we should go and not take up any more of your time. We’ll be more than happy to mail you a prospectus in due course.”
Edmund’s irritated expression had morphed into the insufferably smug look Gloria remembered from whenever he had dressed her down in days of yore. She pulled out the central drawer of her desk and found a red Sharpie on her desk. Looking at Edmund, she took one of Russell’s graphs and copied the bell curve, only drawing it shifted to the right of the one printed on the paper. She held up the graph.
“What would it mean to you if this happened?”
Russell squinted at the paper—it was the diabetes chart.
“That’s not going to happen.”
“Humor me. Hypothetically.”
“You’re projecting chronically sick diabetes patients living about ten years longer than they’re going to live. As I said, it’s not going to happen.”
“Let’s say forty percent of your policies are diabetes patients. If we have a curve like mine instead of the curve like yours, I reckon that’s twenty thousand policies you’re stuck with for ten additional years. That’s, um, two hundred and forty million in premiums you weren’t expecting to pay. Kind of cuts into your model, doesn’t it? Perhaps they’re half your policies. I think the curve needs to move a little more. Fifteen years and it’s four hundred and fifty million. Your biggest source of revenue becomes a sinkhole of toxic assets.”
“That’s hypothetical, and it flies in the face of fifty years of actuarial data. Fifty years!”
Edmund was yelling but Gloria was looking at Russell. He looked worried.
“Yes, you have fifty years’ worth of old data. But you’re not looking at the future. Technology can make a monkey out of a table in a minute. If you have any more great ideas, please share them with me, I will be happy to take a position on them too.”
“What the fuck are you talking about?” Edmund demanded.
“Do you know what an iPS cell is?”
“I’ve heard of them, yes,” said Edmund. “Something to do with stem cells. But I don’t see—”
“Induced pluripotent stem cells,” said Gloria. “If you looked to the future and not to the past, you might know that iPS cells are going to have a huge impact on regenerative medicine.”
“You mean stem cell
Russell suddenly stopped, out of breath. Russell and Edmund looked at Gloria, who stared back for a couple of beats. There was silence.
“Don’t you see it?” Russell questioned.
“ I see it,” Gloria said. “You’re the ones who don’t see it.”
“It’s real. We’ve run the numbers up and down and confirmed it with all the actuarial companies. It’s real. We’re already holding fifty thousand policies—”
Gloria whistled. “How much are the premiums on fifty thousand policies, Russell? You must be paying out about four, five million a month. You’re going to run out of capital by the end of next year if you don’t start having significant income.”
Russell and Edmund knew she was right. That Gloria was smart was not news to Edmund; he wouldn’t have hired her otherwise way back when. But in this instance they’d be fine, they were going to be fully capitalized by the end of this year. He wondered if Gloria might be bluffing and was beginning to think she was. So far she’d given them nothing. He was getting tired of this.
“Gloria. All you’ve told us is that we are mean, heartless bastards taking money from old ladies,” Edmund said. “But we knew that already. I think you’re fishing. You told some guy you were shorting us knowing it would flush us out, and we’d come down here and explain our business plan. Which we have done. Congratulations. Now we should go and not take up any more of your time. We’ll be more than happy to mail you a prospectus in due course.”
Edmund’s irritated expression had morphed into the insufferably smug look Gloria remembered from whenever he had dressed her down in days of yore. She pulled out the central drawer of her desk and found a red Sharpie on her desk. Looking at Edmund, she took one of Russell’s graphs and copied the bell curve, only drawing it shifted to the right of the one printed on the paper. She held up the graph.
“What would it mean to you if this happened?”
Russell squinted at the paper—it was the diabetes chart.
“That’s not going to happen.”
“Humor me. Hypothetically.”
“You’re projecting chronically sick diabetes patients living about ten years longer than they’re going to live. As I said, it’s not going to happen.”
“Let’s say forty percent of your policies are diabetes patients. If we have a curve like mine instead of the curve like yours, I reckon that’s twenty thousand policies you’re stuck with for ten additional years. That’s, um, two hundred and forty million in premiums you weren’t expecting to pay. Kind of cuts into your model, doesn’t it? Perhaps they’re half your policies. I think the curve needs to move a little more. Fifteen years and it’s four hundred and fifty million. Your biggest source of revenue becomes a sinkhole of toxic assets.”
“That’s hypothetical, and it flies in the face of fifty years of actuarial data. Fifty years!”
Edmund was yelling but Gloria was looking at Russell. He looked worried.
“Yes, you have fifty years’ worth of old data. But you’re not looking at the future. Technology can make a monkey out of a table in a minute. If you have any more great ideas, please share them with me, I will be happy to take a position on them too.”
“What the fuck are you talking about?” Edmund demanded.
“Do you know what an iPS cell is?”
“I’ve heard of them, yes,” said Edmund. “Something to do with stem cells. But I don’t see—”
“Induced pluripotent stem cells,” said Gloria. “If you looked to the future and not to the past, you might know that iPS cells are going to have a huge impact on regenerative medicine.”
“You mean stem cell
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