Billions (S02E02) “Dead Cat Bounce”


So here’s what happened:

The episode opened with both Axe and Todd Krakow of Krakow Capital as panelists on a $3,000/per person “Thought Leaders” symposium on the future of quant funds versus hedge funds. Lawrence Boyd, played by Eric Bogosian, CEO of Spartan-Ives, a company Lonnie Wately characterized “as a finishing school for Treasury Secretaries” chaired the event. Of course, Axe and Todd trade barbs during the symposium but the event abruptly ended After Axe delivered a final diatribe and then stomped off the stage in a flourish. Later Axe is presented with an analysis theory by Mafee and Taylor that Krakow is invested in a shell company that’s milking investors in the Pearl River Delta. Axe directs them to dig deeper into what may be Krakow’s real investment. Taylor and Mafee later find it, short it and Axe prevailed monetarily-wise, but while Axe swaggered he realized his business needs to diversify and directed Wags to discover a new diversification market. “We can’t live inside those city walls forever. Change is coming.”

Rhoades, three days out from being fired, met with his lawyer Ira, played by Ben Shenkman to assess his options. Ira recommended Rhoades prosecute a case so big and juicy the Attorney General would have no other choice but to reconsider. Rhoades agreed and directed his staff to find him such a case. The first recommendation was to prosecute Spartan-Ives but Wately quickly objected: “if we muck in there, and step wrong we will all be shaking cups outside the bar association.” They resign themselves to a lesser target, retail giant Goodstock, but Rhoades’s hopes are dashed when he is later informed by Fred Reyes, the new deputy AG, played by the very handsome Ian Kahn that Goodstock’s “pelt” would not save him from dismissal. After a rather impromptu “session” with Wendy about an decisional exercise she employs with clients called “The 180” Rhoades takes the large hint. Rhoades has Spyros contact the press to spread the rumor that an investigation may or may not be in the works against Spartan-Ives but such investigation could only be pursued if sanctioned by the Attorney General. It saved Rhoades’s bacon, but the Attorney General warned Rhoades he only bought time.

It seems Wendy and Rhoades kept their separation a secret from their family, however, Chuck Rhoades, Sr. figured it out and subsequently visited Wendy and then later Rhoades. And Chuck, being the bastion of matrimonial faithfulness that he is, one can hear his “logic” from space that Wendy “play the part” for the larger picture. “Unless it is broken plates and steak knives you gut it out.” Yeah, Chuck, we all know what you mean.

Meanwhile, Wendy and Rhoades are in couple’s counseling, but Wendy is more concerned about Dake’s investigation, specifically her interview with him. She fears if Dake discovers Rhoades illegally accessed Wendy’s session notes, it would end Rhoades’s career. Rhoades informed her to be truthful and not worry about him. It was a pleasant to watch Wendy briefly turn the interview tables on Dake but almost on a dime Dake turned it back and came perilously close to realizing Wendy’s fears but he approached the question the wrong way as if Wendy had passed bedroom talk into the boardroom. Wendy’s response to his question made Dake aware of his error and soon thereafterwards contacted Brian Connerty to seek out more information.

Doc Gus, played by Marc Kudisch is the new Professional Coach at Axe Capital and strutted in looking like a literal ballbuster off the docks of New Jersey and proved just as hard-hitting as Wendy. In one of his employee coaching sessions, a rather timid employee sought guidance on how to be promoted from Analyst to Portfolio Manager. Well, that’s going to be hard to do, particularly at Axe Capital if all one does is say sorry all day, and in New Jersey docks-like language Doc Gus let the employee know it: “You are a long way from making the trek up that path! Holy fuck, do you people need what I do!”

After Wags witnesses Doc Gus explosively completing a session with one of the employees and questions what happened (yes, Wags did that) Doc Gus zones in on Wags and talks him into dinner at an exclusive Sushi restaurant. During the dinner scene Wags surprises us all with his fluency in Japanese and humbling respect for the culinary craft of the Japanese chef. When he witnesses another patron committing what he thinks is culinary sacrilege Wags explodes all over the guy. Doc Gus calms him down and asks, “Where are you at right now? What’s churning those waters up so much that a little cub like that can break the levee?” Yeah, Wags? What gives? Wags’s descent into despair appears to be genuine and Axe is beginning to notice. Turns out Axe’s new Chief of Staff, Stephanie Reed is not a simple figurehead. It looks like she was brought in to balance out Wags, if not outright replace him, if necessary.

The only scene we see of Lara is at the conclusion of a workout session with her sister where she proposed they enter into business together on as-yet-to-be-determined venture.

What may also surprise viewers is that Brian Connerty and Orrin Bach know one another. Seems Orrin was a Law Professor who taught Brian Connerty back in Law School. This is revealed in a scene where they meet at night at the request of Brian who needs some good-old fashioned mentorship.

The meeting we all waited for was the one between Dake and Axe, and this is the first time we see Dake a bit taken aback as Dake was not prepared for Axe or the force of his personality, or his incisive ability to read a situation and /or people. Rather than continue to cross brains with Axe, Dake blatantly suggested Axe recharacterize the bonus he gave to Wendy as a bribe and if he did so the Justice Department would grant him immunity from prosecution. Afterwards, Orrin advised Axe that although Axe’s reputation would take a hit Dake’s offer would be easiest, quickest route to Rhoades’s downfall, but then Wendy would also be indicted.


Summary Thoughts:

One of the things I love most about the machinations of business, and this episode laid out so well is that business is hardly ever about the textbook fundamentals. It is always about behavior. How Taylor was able to piece together Todd Krakow’s shell activities to milk investors by analyzing his statements, movements, and reactions is 95% as to how business is conducted on the Street, particularly Hedge funds. There was a scene where Axe talked about how Hedge funds used satellite images to watch Wal-Mart parking lots and could project what type of quarter they would have simply by the number of cars in the parking lot.

As an aside, every so often I tweet out the need for companies to employ a Professional Coach. It would most certainly go a long way at exposing an employee’s strengths and weaknesses if, how and where they can grow themselves and the company. The scene between Doc Gus and that one Analyst is a perfect example. I mean, who or what business is going to promote a person too timid to cross the street with the delusional expectation this same timid person possesses the ferocity to help grow a business? No one.

The best line of the episode was delivered by Lawrence Boyd: “I lived my life as an exemplar of rectitude.” Doesn’t that sentence sound like a warning of the worst bowel movement ever is coming? Could be.