Odds Against Tomorrow

by Nathaniel Rich

  “Listen,” said Mitchell. “I’m just about to finish a project here. Can you leave me your card?”

  Charnoble pretended not to hear. “The corporation,” he continued, “has only one response: We didn’t see it coming either. Unfortunately, as we’ve seen in Seattle, this response doesn’t hold up in court. And because they have no catastrophe coverage, they’re out, at the very minimum, several hundred million dollars.”

  Mitchell saw that he was going to have to wait this through.

  “Listen,” said Charnoble. “I’m not immoral or anything like that.”

  “Of course not.”

  “It’s only that disasters happen, no matter how much you prepare. Just because you build a bomb shelter doesn’t mean you’ll be inside when the bombs fall. And if it’s not a bombing, it’s a war, a tsunami, an envelope stuffed with ricin. An earthquake.”

  He appeared to be a snake, this guy. But he wasn’t quite guileful enough. The real reptiles never look like reptiles—they’re too skilled at camouflage. Still, it made Mitchell wonder: When he went on about his worst-case scenarios, did he sound like Charnoble? He doubted it. He didn’t have the rank phoniness, the condescension, the folksy camaraderie. People like Charnoble—and Fitzsimmons was full of them, especially in Securities and Lender Finance—were interested in risk for purely financial reasons. They saw the wedges that risk offered, the way you could use risk to get between clients and their money. Mitchell’s fear, on the other hand, was real, hot, viral. Just the previous night he couldn’t sleep because he’d been trying to figure out why a global pandemic as severe as the influenza of 1918 hadn’t recurred, and whether one was imminent. He had read about a new superbug called New Delhi metallo-beta-lactamase, or NDM-1. This Indian bug was a product of the twenty-first century, resistant to antibiotics. In the last four decades, scientists had discovered nearly no new antibiotics; an airborne mutation of NDM-1 would be unvanquishable. It would quickly contaminate every hospital in the world. There would be no cancer treatment, transplants, care of preterm babies, even tonsillectomies or appendectomies, without the risk of fatal infection. NDM-1—this was the kind of thing that Mitchell pondered. Not just NDM-1, but also its inevitable heirs: NDM-2, NDM-3, NDM-4, each mutation more aggressive than the last. The youngest child always caused the most trouble. Until the next one came along.

  “As we’ve learned,” Charnoble continued, “whenever there’s a catastrophe, Corporate is vulnerable. Corporate has to clean up the mess—in a manner of speaking. This is where FutureWorld comes in.”

  “So FutureWorld protects the company against disaster? That’s impossible.”

  “You’re right. We don’t protect. We advise. We predict catastrophes, calculate their costs, and help our clients avoid unnecessary risk.”

  Mitchell sat with this for a second. “What’s in it for them? The clients, I mean. If another earthquake comes, they’re doomed, no matter what advice you’ve given them.”

  “If a disaster does occur, we serve as a hired scapegoat. We indemnify you when your insurance company won’t.”

  “We’re talking great fires, twisters, solar storms.”

  Charnoble nodded. “Suitcase bomb, water supply poisoning, hantavirus. In court, the corporation can testify that they hired FutureWorld, a risk management specialist. They paid us eight hundred and fifty thousand dollars a year—”

  “Eight fifty?”

  “That’s just the retainer. The point is that the client can say, ‘If our business was not sufficiently prepared, it is the fault of FutureWorld, whom we hired to advise us—at the formidable rate of eight hundred and fifty thousand dollars—for this exact service.’”

  Mitchell couldn’t figure out why Charnoble was trying to win him over.

  “So we would pay for the right to blame you.”

  “Exactly,” said Charnoble. “So you can’t be accused of negligence. This is, in legal terms, a buck-passing. A ripcord. FutureWorld serves as a get-out-of-jail-free card. In a manner of speaking.”

  “So you’re offering catastrophe coverage. You’re offering a service that insurance companies no longer offer.”

  “I’ll put it like this. When, after 2001, insurance firms stopped providing catastrophe coverage, a void was created in the market. We plan to fill that void.”

  “But how?” asked Mitchell. “I mean, if a worst-case scenario did occur, wouldn’t FutureWorld have to pick up the bill, like an insurance agency? One disaster and you’d be bankrupt.”

  “No,” said Charnoble. His fingernails were working half-moons into his palm now. He seemed pleased with himself. “No, we wouldn’t have to pick up any bill.”

  “Who, then, would pay?”

  “Nobody,” said Charnoble, and it was as if a white sheet of paper had passed over his face. His features became flat and blank. Even his voice had lost its modulation. “Nobody,” he said, “pays at all.”

  Mitchell suspected that Charnoble had accidentally said something he wasn’t supposed to say.

  “You’ve left something out,” said Mitchell. “I’ve added it all up, and it doesn’t come out right. You protect your corporate clients. But who protects you? What protection do you have that an insurance company doesn’t?”

  Charnoble laughed. “You’re good at mathematics.”

  “This is only basic algebra. But a variable is missing.”

  Charnoble seemed to be weighing something in his head. On one side of the scale was prudence. On the other side was his pride. A grin slowly started to work its way across his face and Mitchell could tell that pride was tipping the scale.

  “How familiar are you with the concept of limited liability?” said Charnoble at last.

  “I didn’t go to law school.”

  “Let me try again. Two weeks after the Seattle settlements were announced, the governor of New York signed a routine piece of legislation called the Recommit to Civil Service and Pensions Act. It moved money between different state retirement funds, but that doesn’t matter. Like any bill in this state, it contained earmarks—funding for a hospital in Syracuse, a park in Batavia, a salmon-counting project in Lake Ontario. But none of that matters either. What matters is that the state senator from the Twenty-fifth District—that’s the district that includes Wall Street—inserted his own earmark. It’s one sentence long. It offers what lawyers call ‘a defense to liability claims.’ It applies to any property owner in possession of a building with an occupancy greater than two hundred persons.”

  “Just about every office building in the state, in other words.”

  “That’s the first part of the sentence. The second part says that if the property owner has made a ‘reasonable, good faith effort’ to protect his building against acts of God—by, for instance, spending a substantial sum on precautionary measures—he is indemnified. He can’t be subject to civil suits like those we saw in Seattle.”

  “And that’s it?”

  “Similar limited liability statutes were passed after the savings and loan crisis, after nine eleven, after Bernie Madoff. It’s nothing new. You just have to know the right state senator.”

  This man was up to tricks. But there was a solid and compact logic to what he was describing. The first rule of investment was that chaos breeds financial opportunity. And this was a chaotic time. Mitchell was beginning to see it now.

  “We make recommendations to our clients about how to reduce their exposure to catastrophe,” said Charnoble. “But we’re merely consultants. If our recommendations are insufficient, we’re not liable. And our clients, as long as they pay for our services, are not liable either.”

  Charnoble paused to let that sink in.

  “Think of a money-laundering operation,” he continued. “Dirty money goes in, clean money comes out, no one breaks a law, and everyone is cleared. And everyone is rich. We protect our clients against risks, and we protect them from lawsuits. The statute protects us. And the good senator from the Twenty-fifth District will not have to wor
ry about fund-raising this year. Everyone wins. In a manner of speaking.”

  “So you just happen to know the right state senator?”

  “Not me—I don’t. But Brumley Sansome’s legal counsel does.”

  So Charnoble was a Brumley man. That meant he was either a genius or a crank. He had impressed powerful people in his past.

  “That makes sense. Only Brumley would devise something this devious.”

  Charnoble’s grin was a fault line splitting open a freeway. “Look, these old shops—they’re like spiderwebs.” He gestured at the spreadsheets on Mitchell’s desk. “We’re the flies. Before I started FutureWorld, I was just like you—a quant. I would’ve been stuck there forever, pricing risk, valuing employees’ lives. The same grunt work you’re doing at Fitzsimmons.”

  Mitchell turned the spreadsheets facedown.

  “After Seattle,” continued Charnoble, “Brumley saw an opening. That’s what they do, after all. They see windows of opportunity and they jump through them. They understood how consulting could indemnify. It’s an old trick, really. McKinsey, Bain, BCG—they’ve been swiping clients from the old insurance Goliaths for more than a decade now. Consulting firms are more nimble, and much less regulated, than the insurance multinationals. Seattle only confirmed that we don’t even have to compete with insurance firms for catastrophe money. Catastrophe is all ours. We’re going to make a killing.”

  “In a manner of speaking.”

  “Exactly!” Charnoble’s eyes glittered like mica. “Brumley spun FutureWorld into its own company—the way JPMorgan did back in the nineties with RiskMetrics. They needed a quant to lead it, and I was there.”

  Mitchell had studied RiskMetrics in Advanced Financial Engineering. The firm’s statistical model was now obsolete, but it had been the pioneer in the field, the Ford Model T of the risk industry. For all his sublimated deviousness, Charnoble knew the literature. He had mastered Risk; he had studied the canon.

  “Brumley doesn’t want our competitors to catch on, at least not until we’ve cornered the market. So we have our own office, our own LLC, our own stationery.”

  “Where is FutureWorld’s office?” asked Mitchell.

  “Downstairs. Second floor. How do you think I got here so fast?”

  “Oh. Right.”

  “It’s temporary, though, this address. Brumley leased the office before I was brought in. It’s not good for FutureWorld to be in the Empire State Building. Too hot.”

  “You think something bad is going to happen? Based on your research?”

  Charnoble pursed his lips.

  “Another attack?” Mitchell groped absently for his calculator. “What are your numbers?”

  Charnoble laughed—a cold, sickly expulsion of air. “You’ll have to hire FutureWorld in order to find out. To find out what the future”—and here he took a histrionic pause—“will cost you.”

  At the elevator bank Charnoble handed Mitchell a business card.

  “I bet Fitzsimmons is happy with you. You must be good.”

  “Equity, Assets, and Derivatives isn’t hard. It just eats your life.”

  “There’s something about you,” said Charnoble. “I’m not sure if you’re aware of this, but, well, it’s your eyes.”

  “Sorry. My eyes?”

  “They communicate urgency. Urgency, and even fear—fear of a great danger coming on.”

  “That probably explains my success with women.”

  “It’s a gift I don’t have,” said Charnoble. “I can’t imitate it either. No matter how much I practice in the mirror.”

  “You practice in the mirror?”

  “It’s essential, in this line of work, to frighten clients. To convey a sense of implacable doom, in a manner of speaking. I’m no good at it. I come off as too cheerful or else too nervous. See, Mitchell—I know my limitations.”

  Charnoble’s finger found his palm and twisted inside it.

  “It’s not difficult to scare people during hard times,” he said, taking a confidential tone. “The challenge is to scare them during the hopeful times, in the lulls between catastrophic events, when FutureWorld’s services start to seem like an unnecessary luxury. When I look at you I start to believe that another disaster is fast approaching.”

  “It’s late.”

  “Don’t take it the wrong way. All I mean to say is, you’re a natural.”

  The elevator chimed and Charnoble slinked inside. Just before the door closed, a weird lopsided smile crawled onto one side of his face. Then he was gone.

  Mitchell wondered what Charnoble meant by “the wrong way.” Did business zeal make Charnoble pray for atrocity?

  But half an hour later, as Mitchell sat in the backseat of the company sedan, the tinted windows muting the dawn, he wondered whether, in some hidden zone in his brain, he prayed for atrocity too. If you devoted your life to the contemplation of disaster, then wasn’t an incident-free existence an empty one? Put it this way: if you planned for disaster and none ever occurred, you were a fantasist. But if a disaster you predicted did come true, then your life had meaning. You weren’t just an expert. You were a prophet.

  It was at moments like this that Mitchell’s thoughts turned to Elsa Bruner.

  4.

  He hadn’t needed to open the envelope, which was heavily creased and smudged with dirt, to know that it contained a bomb, or at least superfine toxic dust. He had been expecting something of this sort; given the current national mood, it was only a matter of time until next-generation radicals began mailing bombs to the country’s largest corporations. But when Mitchell flipped over the soiled envelope—was the dirt, in fact, human feces?—he saw Elsa Bruner’s name. This barely diminished his anxiety. His forefinger trembled as he tried to slide it under the crease. It was as if his finger were connected to a stranger’s hand.

  His agitation multiplied with each sentence he read. The first peculiar thing he noticed about the letter, other than the fact that it was drafted in pencil, was its intimate, almost confessional tone. It was written in the voice of a lifelong friend who was resuming a conversation begun long ago. “Hi M.,” she had written.

  Elsa began the letter by explaining that after her “close call” on the day of the earthquake, she had been admitted to a hospital, where she was given a heavy dose of quinidine to combat her arrhythmia. If Mitchell hadn’t called the paramedics, she might have died. She apologized for her behavior that day—she hadn’t been thinking clearly. Her fainting episode, she explained, had been caused by a rare genetic disorder called the Brugada syndrome, which she didn’t describe beyond calling it “boring.”

  One might have expected the letter to end there. A thank-you note demanded no further elaboration. But elaborate she did. Elsa proceeded to update him on what had happened to her since that day. She explained that she had never returned to college and instead moved to a tiny village in Maine called Starling. Her boyfriend’s father owned property there: Camp Ticonderoga, a summer camp for boys on a horseshoe-shaped lake twenty miles northwest of Augusta. The camp had gone out of business several years earlier, and its log cabins had been yielding to the encroaching wilderness. The father had struggled to find a buyer, so he agreed to let his son and Elsa, along with several friends, convert the hundred-and-fifty-acre property into a working farm. It all seemed very convenient. Did Elsa know about the property before she started dating the boyfriend? She didn’t say.

  They arrived in late March, when a fragile crust of frost still covered the ground and sheer flakes of blue ice floated in the lake like tiny glaciers. In April, under Elsa’s direction, they tilled the baseball field and planted tomatoes, squash, and cucumbers; in the riflery range they concealed a square plot of marijuana by planting rows of sunflowers around its perimeter. They played volleyball, lit giant bonfires, and had dance parties in the old assembly hall. They paddled canoes out to the raft and jumped screaming into the frigid green water. They bunked in a farmhouse that had once served as the camp’s infi
rmary. There was no Internet service and no cell phone reception until Augusta, which is why she had to send her letter by post.

  And that was it. She signed the letter, “Goodbye, Elsa (The Fainting Girl).”

  Mitchell was baffled. His first conclusion was that the letter was a request for money. Since he started at Fitzsimmons Sherman, several friends had already written to request his patronage. They never asked him outright, of course—the e-mails were always carefully oblique. They began with a couple of paragraphs of stale banter, reminiscences, and old jokes before succumbing to the inevitable: Would you like to “invest” in my noise band’s debut EP? Would you like to be an “executive producer” of my documentary film about chocolate cigarettes? Would you “subscribe” to our online literary magazine? The message was always clear enough: We’re struggling artists. You have money now. Can you give us some?

  But Elsa hadn’t mentioned money. Perhaps the boyfriend’s family was providing subsidies. If anything she seemed oblivious to such concerns.

  A more logical explanation was that Elsa Bruner had gone mad. The lack of oxygen to the brain while her heart had momentarily stopped was the most likely cause. It wasn’t just the “Hi M.” business, the inexplicable familiarity, that seemed off. Mitchell had also noticed egregious inconsistencies in her behavior that suggested impaired cognitive faculties. Elsa had realized, for instance, that were it not for her proximity to a first-class university medical center, she would have died during her Brugada episode. Yet now she had decided to move to a farm in Starling, Maine, of all places, some twenty miles from the nearest city. Not that Augusta’s hospital was a state-of-the-art operation—did they have any physicians who had ever treated, or even heard of, Brugada syndrome? Besides, Elsa didn’t have access to the Internet or telephones, so calling an ambulance would be out of the question. And if that weren’t enough, she was submitting herself to a frightening cocktail of activities that seemed designed to induce cardiac arrest: strenuous exercise, narcotics, and physical shock (jumping into a freezing lake). Perhaps her letter was a thinly disguised plea for help.