Crash

by David Hagberg

  “Bullshit, Seymour. He’s teasing the network guys, so what’s he really up to?”

  “He was busy with Rockingham’s daughter. She heads the company’s marketing department, and the word on the Street is that she’s pretty good.”

  “So, he’s chasing another skirt, what’s new?” Betty said.

  Ten years ago, she’d had a brief affair with Treadwell, joining a legion of women he’d bedded. The affair had broken up her marriage, but not his. Treadwell’s wife was a society doyenne, who’d never bothered herself with her husband’s flings. He was making a lot of money, and that was sex enough for her.

  “Is that what you want to talk about? Reid’s sex life?” Schneider asked.

  Hidalgo, 1792’s headwaiter, brought a skim cappuccino, the only thing Schneider ever ordered up here.

  “Rumor is that BP is cashing out a good share of its proprietary accounts, a lot of the trades on a number of dark pools. He’s even spreading the money around in small bits to banks to get in under the FDIC’s limits.”

  “I’m a simple trader on the floor.”

  “He’s taking a large piece of BP’s capital and squirreling it away like hiding it in a storm cellar with a tornado on the way. That’s a disaster scenario, Seymour. Drastic, wouldn’t you say?”

  Schneider shrugged. “Rumors are a dime a dozen. Why don’t you ask Reid himself?”

  “We don’t talk.”

  When she’d announced over dinner with Treadwell and a few Street friends at Delmonico’s that her husband had left her when he’d learned about the affair, Treadwell had dumped her then and there in front of everyone. She’d supposedly reacted by tossing her whiskey sour in his face and storming out.

  “I can’t discus BP policy,” Schneider said. “You know that.”

  She sipped her scalding coffee without flinching. “You and I both know that China is going to rise up and bite us in the ass. And you’ve been the town crier, telling everyone that the worldwide debt load is going to come crashing down on us.”

  “I’ll own up to that much,” Schneider said. “And when it comes—not if, but when—it won’t be pretty.”

  “Reid’s a shrewd man. He’s a bastard, but he knows his business. And he has to know what’s really going on in Beijing; he has ears everywhere, including Spencer Nast, who I was told was also on the floor this morning. He was one of your guys, and right now there’s no doubt he has some damned good intelligence sources.”

  Schneider knew exactly where she was coming from, because he was asking himself almost the same questions. “Above my pay grade, Betty.”

  “Really,” she said, giving him a small, vicious smile. “You’re the old man of the sea on the floor. You know everyone. You hear things.”

  “Do I?”

  “Here’s the trouble for BP, and trouble for Reid and for you, personally. Your company is taking its capital off the board—money it uses to trade and make deals for its own accounts.”

  “And the trouble is?”

  “You guys have a legal responsibility to safeguard your clients’ money. If Reid suspects that hard times are coming and protects the firm’s money, but not its clients’, it could be construed as a violation of securities law and exchange rules.”

  Schneider said nothing. There was nothing meaningful he could say. He was in a corner, and Reid Treadwell had put him there.

  “If BP goes down, you will too, Seymour. Do I make myself clear?”

  “What do you want?”

  “For now I want your take on how a Chinese bank collapse is even possible. The Communist Party controls everything. If the People’s Bank of China sees commercial banks folding, it would take them over and print more money to recapitalize them. In the trade wars we’ve had with China, the PBOC was always there to keep the banks in good shape.”

  “You’re right up to a point,” he admitted, his voice lowered even though no one was close enough to overhear. “But what I’m about to tell you never came from me. Deal?”

  “Deal.”

  The waiter came, poured more super-hot coffee, and withdrew. Ladd drank without letting it cool down.

  “I won’t confirm that this came from the White House via Spencer, or from anyone else connected in any way with BP.”

  Ladd held up a hand. “I got it. Maybe a little bird told you. What are you saying?”

  Schneider sat back and gathered his thoughts. “We think of China as the monolith, which used to be true. But Hua Biao is weak, while Liu Feng is smart and one tough son of a bitch.” Hua was the chairman of the Communist Party, and Liu was the new governor of the People’s Bank of China.

  “Common knowledge.”

  “What’s not so common is that the PBOC used to be a puppet of the regime. But Liu has his own ideas.”

  The PBOC was much like the Federal Reserve in the U.S., with the authority over bank supervision, interest rates, and if necessary, the creation of money. After Mao Zedong’s death in ’76, the Party turned to a hybrid system of Marxism and capitalism. Commercial banks, overseen by the regime-controlled PBOC, lent money at a wild pace to private as well as publicly owned corporations to build the economy as rapidly as possible. And they succeeded fabulously. In a very short time China became the second largest economy on earth behind the U.S.

  “But the commercial banks made a lot of very bad loans, at the regime’s request,” Schneider said. “Loans that are going into default; companies are not even making interest payments, let alone paying off the loan when it’s due.”

  “The PBOC will bail them out same as always,” Ladd said.

  “Maybe not this time,” Schneider said. “If they freeze up, which might be starting to happen, their entire economy could collapse, bringing tough times for everyone else.”

  “Including us.”

  Schneider nodded. “And that’s not all. Liu is demanding that Hua step aside and let him take over the Party as well as the central bank. But Hua, and almost certainly the Politburo, has ordered the PBOC to continue bailing out the banks. Liu is saying no, so that if the economy takes a dive, which it will and very soon, it’ll be on Hua’s head.”

  “Power politics,” Ladd said.

  “At the highest level. And that’s what Reid is trying to guard against. If China goes down, everyone will get burned. Emerging countries supply them with raw materials. Germans sell them cars. We sell them soybeans and a lot of other foodstuffs. If all of that goes south, a lot of people will get hurt.”

  “It’s like Reid knows the other shoe is about to drop,” Ladd said. She shook her head. “Talk to me, Seymour. What’s he thinking?”

  “As I said, Betty, it’s above my pay grade,” Schneider told her. But Reid did know something the rest of them didn’t. And it had something to do with an abacus, the Babylonian calculating instrument of beads strung on wires that had been important in early Chinese history.

  On the floor earlier this morning, O’Connell had mentioned it to Reid, who got angry, which he never did. Schneider, standing nearby and unnoticed, had overheard. Whatever the “abacus” was, it was important enough to scare the hell out of both executives.

  THREE

  THE RUSSIANS

  16

  Location Alpha, where the Russian team had been holed up for the past three days, was on Platt and Gold streets in a moderately new high-rise condo with underground parking. Its location near South Street Seaport, north of Wall Street and the Financial District, was an upscale address. The Russians, understanding this, were well dressed when they were out and about. They were Spetsnaz professionals and knew how to blend in.

  It was also within walking distance of Burnham Pike, so Dammerman and Hardy were on foot.

  “Do you think this is for the best, you coming here in person?” Hardy asked.

  “What the fuck’s that supposed to mean?” Dammerman demanded.

  “You’re BP’s COO.”

  “No shit.”

  “You shouldn’t be seen hanging out with the
se scumbags. I hired them, it’s my job.”

  The street was busy with traffic, a lot of people surging across at every corner, minding their own business. Even the street people, set up on cardboard mats close to the buildings—especially those with overhangs to help protect them from the rain, or snow in winter—minded their own business. Their hand-printed signs bore pleas like: Hungry. God bless for your help.

  “Do you think anyone gives a shit, Butch?” Dammerman asked. “We’re terrorists, right?” he said, raising his voice. No one noticed them. “Really?”

  Hardy shook his head. “Your call, Clyde.”

  The building was 301 Gold, and inside they approached the concierge’s desk. “Mr. Anderson for John Dugan,” Hardy said.

  “Are they expecting you, sir?” the man in a dark blue blazer and white shirt asked.

  Dammerman wanted to reach across the desk and break the bastard’s neck. He didn’t like flunkies talking down to him.

  “Yes, we’re associates,” Hardy said pleasantly.

  The concierge made the call, and he nodded and hung up. “Thirty-one A, gentlemen. The first elevator on your left.”

  Yuri Bykov, the group leader, dressed in sweatpants and a white T-shirt, was waiting at an open door a few feet down the hall, his left hand concealed behind his back. He was short, slightly built, unremarkable-looking, with thick dark hair, a narrow face, and startling black eyes. But he was smiling.

  Dammerman, who’d been a boy of the streets, instinctively understood that Bykov was a killer. The man had the look.

  “Do we have a problem?” Bykov said.

  “No, just a slight change,” Dammerman said.

  “Who the fuck are you?” the Russian asked. He brought his left hand around from behind his back, revealing a deadly looking pistol.

  Dammerman started to respond, but Hardy held him off. “He’s my boss, the money man.”

  Bykov hesitated.

  “Without him, there’s no deal. Ponimayu?” Understand?

  Bykov stared at Dammeran for a long beat, then nodded and lowered his pistol. “Da,” he said in Russian and turned back into the apartment.

  Hardy followed first, Dammerman, now not so sure of himself, right behind.

  The two-bedroom-with-study apartment was sparsely but well furnished, with great views south toward the East River. Three men, similarly dressed to Bykov, were playing poker at a table in the kitchen, at least a couple of thousand in one-hundred-dollar bills in the middle. Bykov’s hand was lying facedown.

  They looked up. All of them were similar in appearance to the team leader; well groomed, closely shaved, prosperous-looking, with absolute confidence in their eyes and in their manner.

  For the first time in his life, Dammerman felt outgunned; he was not in charge of the situation. It was like standing next to a half-million-volt power line; look, but don’t touch.

  “You gentlemen are ready for morning?” Hardy asked.

  “We were ready two days ago,” Bykov said. “We’re ready now.”

  “Do you want to go over the timetable with me?”

  “Why?”

  “It’d make us happy.”

  “The diesel fuel and hydrogen canisters are packed in the panel van downstairs. Just before nine-thirty we’ll park it in front of three twenty-five, set the timer, and walk away.”

  Three twenty-five was the number of the building that housed the NYSE’s backup computer, across the river in Union City, New Jersey.

  One of the poker players laughed. “Boom,” he said.

  In that moment, Dammerman was suddenly not intimidated by the four of them. They were boys, in his estimation. Highly trained with weapons and explosives and almost certainly hand-to-hand combat, but they were kids, experienced in only two things: how to kill people and blow up shit. But they had no finesse. They weren’t even Americans.

  “We have another issue that we want you to take care of for us,” Dammerman said.

  Bykov looked at him as if he were an idiot.

  Dammerman nodded to Hardy, who took out an iPad. He brought up a picture of Cassy at her workstation. She was talking to Masters and had just turned to look back at her computer when Hardy had taken the picture from across the room. He held it out so Bykov and the others could see it.

  “Her name is Cassy Levin,” Dammerman said. “She works for us, and she could be a problem.”

  “A problem for whom?”

  “For me, and therefore for you.”

  “Explain,” Bykov said.

  The other Russians were watching the interplay, faint smiles on their lips. Dammerman was the money man, so they couldn’t be openly contentious, but he was a civilian.

  “She may have information that would be a hindrance,” Dammerman said.

  “How so?”

  “She has information about the four of you,” Dammerman lied. “Your photographs, your dossiers, even this location.”

  One of the operators at the table pulled a pistol from the waistband of his sweatpants and started to rise, but Bykov held him off with a gesture. “How?”

  “I don’t know. But except for her, you and this operation are secure.”

  Bykov thought about it for a moment, then nodded. He turned and said something in rapid-fire Russian to the three at the table, who immediately started to rise.

  “We’re leaving,” Bykov said.

  “Five hundred thousand if you take care of the problem,” Dammerman said.

  Bykov stopped.

  “She’ll be leaving the Burnham Pike building at some point this morning, maybe for lunch.”

  “How can you be sure?”

  “I’ll make it happen,” Dammerman said. “And when she leaves the building, she’ll be followed, and you’ll be told of her route.”

  “And?”

  “She’ll be carrying a file or files. Most likely a flash drive.”

  “And?” Bykov said again.

  “Take her off the street and get the flash drive.”

  “And?” Bykov said for a third time, as if it were the only word in English he knew.

  “Kill her or fuck her,” Dammerman said. “I don’t give a shit what you do first. But get the drive, and stay on schedule in the morning.”

  “We’re not going to do it,” Bykov said.

  “Bullshit.”

  “We have some Russian mob friends in a place you call Brighton Beach. We’ll call two of them who are experts at this sort of thing.”

  “When can they be here?”

  “One hour.”

  “Call them.”

  “Two million for that, including our part,” Bykov said.

  Dammerman only hesitated for a beat. “Done.”

  17

  Standing in front of the Federal Reserve Bank of New York, pedestrians flowing around him on the broad sidewalk, traffic heavy as usual for this time of a workday, the title “secretary of the treasury” kept popping up in Spencer Nast’s head.

  His name had been mentioned by the president, but he didn’t want the job. Never had. Too much politicking for his tastes. But Don Pennington, president of the New York Fed, was just the opposite, and in Nast’s opinion the bastard was nothing much more than a cheese brain.

  The bank was just a short distance from the exchange, and pausing in front of what had become an iconic structure—it was the bedrock of the American economy—Nast had to congratulate himself. He was a White House insider. A man of even more financial importance than Reid Treadwell.

  In his days as the chief economist at Burnham Pike, he’d already been well known in the financial world. Almost a superstar even then. He had appeared on a weekly basis on CNBC, and reporters from The Wall Street Journal, Forbes, and a dozen other print-media outlets had come to him for his opinions.

  And now as the chief economic adviser for the president of the United States, his celebrity had expanded almost to the moon and back. He was famous, and he loved every minute of it. No longer was he just some schmuck from Jersey
, he was the right-hand financial man for POTUS.

  The Federal Reserve was the world’s most powerful bank; it was a government institution that rode herd on the nation’s money supply and worked to keep the economy on a good footing.

  Other central banks, like China’s PBOC, were little more than knee-jerk extensions of the country’s rulers. On the other hand, the Fed was independent of the White House because its decisions were supposed to have nothing to do with elections.

  The Federal Reserve was based in Washington, but there were twelve regional banks, and the New York branch was the largest and most influential of them all. New York was where the country’s monetary policies were conducted—for the most part, trading Treasury bonds and dollars, and setting interest rates. The Fed’s policy makers in Washington made the decisions; New York carried them out.

  Looking up at the neo-Renaissance pile of limestone blocks, its windows protected by wrought-iron grilles, Nast almost had to laugh. Besides being the beating heart of the world’s money culture, the edifice also harbored the world’s largest depository of gold. Far below street level, behind a nine-foot-thick door, was the New York Fed’s vault, which held bullion bars worth a quarter of a trillion dollars.

  It was one of the reasons why the building, which had opened in 1924, had been designed to look like a fortress; a physical statement that the American economy rested on a solid foundation.

  And yet the place was as fragile as a sand castle. Just about every man, woman, and child on the planet was about to find that out after the opening bell tomorrow.

  Secretary of the Treasury. Nast couldn’t get the thought out of his head.

  Inside he was met by a young man in a blue blazer. “Good morning, Mr. Nast,” he said. “Mr. Pennington is expecting you.”

  The ornate arched hallway was busy with people, most of whom turned their heads as he and the kid headed to the bank of elevators. In one of the cars, another young man in a blue blazer waited to escort the Washington man to the top floor. No one here was going to make the president’s economic adviser wait in some anteroom.

  Upstairs an attractive young receptionist opened the door to Pennington’s inner office. “Good morning, Mr. Nast,” she said brightly. “Mr. Pennington will see you now.”