They put me in charge of a whole department. A one-person department. Me; I was the department. I was now in charge of raising money for an agency of the United States government; the Federal National Mortgage Association (FNMA) in Washington, D.C.
How it worked was that there were four major dealers who were authorized to issue short term Fannie May discount notes. Each day we were given an allotment, a maximum amount of money to raise for FNMA that day. This helped FNMA budget and smooth out the cash flow they needed to support the mortgage financing markets. Usually, they wanted to raise a few million dollars. Sometimes FNMA didn’t need any money at all on a given day. Management of this capital raising function rotated each week between the four dealers. Brand new to all this, my mentor, Paul, briefly showed me how to do everything. Then, it was our turn to become the manager, run the book, manage the sales, report to FNMA, etc.
I was on my own, running a whole department! The other dealers would call me up and request an amount of money against orders they had generated. I filled all their orders and kept track of the sales. At the end of the day I would notify the director of our firm and then FNMA about how much we had raised for them that day. That day I had raised 12 million and was very proud. I told Paul how much I and the other dealers did. His jaw dropped. “Twelve million?” he gasped. “That sounds like an awful lot. How much was the allotment today?” I gave him a blank look. He ran over to my FNMA accounting book and looked down at the official allotment I had received and written in for that day. Four million. Paul turned ghostly white. “Oh, Lord”, he wailed, “we are in deep doo-doo. You were only allowed to raise four million dollars today and you raised twelve!” He immediately ran in to see the boss. A director of the firm.
I could see them through the glass walls of the boss’s office; we called it the fishbowl. Paul spoke briefly to him. Then the director’s face turned red. Very red. Then he started to scream at Paul. Then he stuck his head out of the door of the fishbowl and screamed for me to get in there. NOW! I entered the fishbowl with my knees shaking. At the top of his lungs the director screamed and screamed at me. “You stupid son-of-a-bitch! You raised eight million dollars more than you were allowed! Now I have to call the president of goddamn FNMA in goddamn Washington, D.C. and see if I can figure out a way to correct this friggin mess! If I goddamn can’t, we’ll have to cough up the extra eight goddamn million dollars out of our own goddamn pockets!!!”
Oh goddamn, I thought, I’m dead. My life is over.
The director told me to wait outside. Then he called Washington and spoke to the president of FNMA. He explained about the “new kid” and the mistake. They worked out a deal; FNMA honored the extra eight million dollars of notes sold by me even though they didn’t need the money right then and it could be a bit of political problem et al. And seeing as how I made them “overspend” their budget by eight million dollars that day they probably wouldn’t need anymore money raised by us, by me, for a while, thank you very much.
I was saved! Or so I thought. The director screamed at me some more. Then he screamed at Paul again. Then he screamed at me again. Then he finally calmed down a little.
He looked at me, hard, and told me he was now going to tell me something I would never forget. And he said,
Gulp. I went pale (or even paler if that was possible under the circumstances).
I heard that little ditty only one time. And for the rest of my life I never forgot it.
It took me a long time to get over making that eight-million-dollar mistake. In today's money that would be an $56 million mistake!
Somehow, I survived it.
That was a long long time ago. And, to this day, I have never feared making a mistake again. Any mistake.
After all, once you make an eight-million-dollar mistake (today, it would equate to a $50 million mistake) it isn’t very likely that you could ever make a mistake that big again!
The moral of the story? When you are young-ish making mistakes can be valuable learning experiences. Provided you survive a mistake you can learn a lot from it.
This post is an excerpt from my book: "Stories of a Lifetime: extraordinary events in an extraordinary life". An amazing book about my amazing life experience. It is available on amazon.com.
