Crash
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This book is for Judy. And for Meredith, beloved muse and so much else.
Also: To Fred Cuppy, a friend and savvy trader; thanks for your help and kind words.
ONE
OPENING BELL DAY ONE
1
Ben Whalen had known for the past two weeks that something was eating at his girlfriend, Cassy Levin, and he was almost certain it had to do with her work on the cybersecurity floor at Burnham Pike, the nation’s premier investment bank. But he had mostly left her alone about it, figuring that sooner or later she would tell him.
As a former Navy SEAL lieutenant he had learned by combat experience how to face any problem head-on. Not that he appeared very aggressive. At five-ten and a lean 170 pounds, his blond hair and open blue eyes made him look more like the appealing boy next door than a highly trained killer.
“My hero,” Cassy had called him from the first moment they’d met at Toni’s, a bar on Long Island.
She was thirty, petite, with a pretty face and a nice figure, and he was turning thirty-two next week, and sometimes, like this Thursday morning, looking at her lying in bed beside him in their third-floor loft in the Village, he could only marvel at his good luck. They’d lived together for nearly a year now, and on the fifteenth, his birthday, he was going to ask her to marry him. And it scared the hell out of him that she might say no.
She’d been moody lately, which wasn’t like her. She was usually feisty and spirited, but something was bothering her. Yet every time he’d brought it up, she’d just smiled and looked away for a moment. “It’s work, but I can’t talk about it right now. Okay, sweetheart?”
“When?” he’d pressed two days ago as they were having lunch at the Old Town Bar on Eighteenth Street.
She’d started to object, the corners of her mouth turned down, but he’d kept going.
“Is it like Murphy Tweed?”
“Don’t push it, Ben, please.”
“Is there an intrusion?”
“Could be,” she’d said, and she’d abruptly tossed down her napkin. “I’m late.” She’d gotten up, pecked him on the cheek, and left.
At her previous job over at Murphy Tweed, a small investments firm, she had worked as a cybersecurity analyst and designer. On her first day of work she’d prepared a detailed report for the brass informing them that their data system was woefully out of date and prime picking for hackers. She’d recommended a complete overhaul of the system, which at her best estimate would take as much as a half million dollars to put in place.
She was voted down, and less than a month later, the company’s system had been hacked and mined for the user names and passwords of nearly one thousand customers. The stolen money had been channeled to overseas private banks where no one could find it.
In less than ninety days the company had gone belly up, the execs had been bailed out with golden parachutes, and Cassy had been blamed for the entire mess. She’d found herself out on the street with no job, no money, and no real prospects.
Until Francis Masters, a research chief at Burnham Pike, had recognized her talent and almost literally plucked her off the street.
“I would like you to do for us what you tried to do over at Murphy Tweed,” he’d told her in his office. “You have the chops, Wharton and Harvard. I went to MIT myself. And believe it or not, MIT’s old VP Tom Foley gave you the best recommendation of all: ‘Hire her and listen to her.’”
“Malware,” she’d told Ben, later that night at home. “Someone put a program into our system that can steal passwords and user names, like at Murphy Tweed, and create all kinds of other mischief.”
“I know how to blow up stuff, and shoot bad guys, and seek and find.”
“Macho man.”
He’d shrugged. “I didn’t have Wharton or Harvard, but I did have the SEALs, including hell week,” he said. “But you know how to stop it.”
She’d tilted her head to one side—a move that meant she was agreeing with him and thinking at the same time—a move that had turned him on from the get-go. “I think I do, and now it’s up to me to convince Francis so he can convince his boss, the chief technology officer.”
“O’Connell?”
“Yeah.”
“Well, they hired you to improve their cybersecurity operation, so you’d think they’d listen to you.”
“We’ll see.”
For the last week or so he’d watched the worry lines grow at the corners of her eyes and mouth, and heard her laugh, which had always been light and musical—one of her many fabulous attributes—go south.
“Screw it,” he’d said at their apartment yesterday after work. “Your systems are in place, let’s take a month off. Paris, get a little efficiency on the Left Bank, walk the Quai, spend the afternoons at sidewalk cafés, maybe take in a museum or two here and there. Versailles, Mont Saint-Michel, maybe a canal barge in Burgundy.”
“Not now,” she’d said.
“Later?” he’d asked.
“Promise.”
He was going to propose in Paris. All he had to do was get her there.
2
Cassy came awake slowly, as she did most mornings. He watched her with pleasure as she stretched, arching her back, tasting her lips as if she were testing the air, just like a cat did, smiling, almost purring. Her shoulder-length dark hair was tousled, the sheet down, exposing one small breast.
Her eyes opened and she looked up at him, propped up on one elbow, watching her. “What?” she asked, smiling.
“I can’t stop looking at you.”
“I’m a wreck at this hour.”
“My wreck,” he said, and he reached for her.
She pushed back the covers and scrambled out of bed, stepping back. “Not this morning.”
“We have time,” Ben said, and he shoved back his covers and started to get up.
“Benjamin, no,” she screeched, backing up.
They both slept in the nude, and in his eyes every square inch of her body was perfect. And again, as he did just about every hour of every day, he said a Hail Mary to his luck. He was a kid from the wrong end of a steel plant/iron-ore-mining town, and she was a New England privileged blue blood.
“Just a shower together. One reason why not.”
“I’ll give you two. You’re taking the shuttle down to the Navy Yard in D.C. first thing, and in the meantime the roof might cave in on me this morning, so I have to be on the floor ASAP.”
“Come on, Cassy. It’s me you’re talking to. What’s going on?”
“Something. I’m not sure. But big.”
Her narrow shoulders slumped, and for just a moment Ben thought that she
was going to cry.
He got out of bed, and before she could turn away, he took her in his arms. She was shivering, and he held her without saying a word for a long time until she calmed down. When they parted, she looked up at him.
“I’m afraid.”
“Don’t be. I’m here.”
“Just be here for me, Ben. Please. Promise me that no matter what happens in the next twenty-four hours or so, be here.”
“Promise,” he said, and he was more concerned than he’d ever been in a combat situation, where the SEALs’ number-one Murphy’s law was: Incoming rounds have the right of way.
3
Clyde Dammerman, the number-two man at Burnham Pike, was the last of the four to arrive at Kittredge, the hundred-year-old private club on Fifth Avenue. He was a tall man with a bald head, a beak of a nose, and dark, angry eyes that suited his personality. This morning, an hour and a half before the opening bell on the NYSE, they were the only four in the oak-paneled dining room on the third floor.
Reid Treadwell looked up. He was BP’s chief executive officer, a trim, dapper man in his fifties with gray hair. The joke was that he was so natty he even went to bed at night dressed in a three-piece suit, the tie correctly knotted. Handsome and debonair, he radiated a charisma that landed Burnham Pike a lot of high-fee deals—and aided his almost insatiable quest for women. Always calm and composed in public, he never raised his voice even when he was irritated, like now. “You’re late,” he said, his tone icy but even.
Dammerman, whose idea for the crash had come to him in a dream eight months ago, took his seat. “Sorry, Mr. T, traffic.”
“We’re betting the fucking farm on this thing, so you could at least be on time.”
“We’re on point, trust me. By noon tomorrow all four of us will have become heroes, and we’ll all be on our way to collecting several-hundred-million-dollar payouts. And let’s not forget, the grateful thanks not only of BP, but of the few clients who will have listened.”
“And screw the NYSE, and every other market across the country and the pond,” Spencer Nast said, a smirk on his pinched, narrow little face. His hair was thin, his frame was thin, and so, in everyone’s opinion, were his morals. Everyone, that is, except for President Roland Farmer, the multibillionaire businessman who’d hired Nasty, as Spencer was widely known, to be the White House chief adviser on economic affairs.
“Start a business, get into the markets, take a risk, and sometimes you win, sometimes you lose,” Dammerman said. “This time we win, guaranteed.”
“Lots of people are going to get fucked,” Nasty said.
“But not us,” Dammerman replied. “Not us, not this time.”
Treadwell, who had listened without comment, sat forward. “Julia, we’re down to the actual wire here, what’s your take? Go or no go?”
Julia O’Connell was BP’s chief technology officer, and without her brilliance, the Plan, as the four of them had come to call the scheme, wouldn’t have a chance of working. Pleasant but socially maladroit, like many tech geeks, she was obviously trying to assume a tone of bravado among all these high-testosterone males.
“It’s risky,” she said. At five-two, just over one hundred pounds, with dark hair cut in bangs, she epitomized the computer whiz. She’d been a nerdy genius since she was seven years old, when she first discovered that she understood the cyberworld. She knew what computers and complicated programs were thinking. Even what they were feeling. Her babies were pure in her mind, angelic. The gods of a new age. They could do no wrong if they were handled with a velvet glove. Garbage in, garbage out. The mantra for the new age.
“Is it a go?” Treadwell repeated.
“Abacus is a go,” O’Connell said. “A better virus than Stuxnet—the one that crashed Iran’s nuclear program—less traceable because it leaves no footprint, and so deadly complicated that even the best heads won’t be able to come up with the cause, let alone any solution that’ll work. When we crash the market—and I mean crash it—they’ll have to start over again. From day one, at tables under a tree on Wall Street.”
“It’ll effect just about every other market here in the States—Nasdaq, American Exchange, Chicago, Over the Counter—plus Tokyo, London, the Euronext, Shanghai,” Dammerman said. “Thank you, Amsterdam.” He raised his coffee cup, and the others, including Treadwell, did the same.
“Amsterdam,” Treadwell repeated.
The fact of the matter was that when it came to serious cybersecurity issues, the most talented hackers were mostly young, disaffected people—almost hippies—who lived in communities in the slums of Amsterdam. The Russians went to them for help, as did the Chinese, the Brits, everyone. Including Dammerman, who with O’Connell’s help designed the parameters for Abacus, then handed the project over to the whiz kids.
And now, within twenty-four hours, or a bit more, Abacus would be a reality, the final phases inserted into the NYSE’s computer system. Markets across the world would crash, disintegrating people’s faith in the system and triggering defaults of debt in an overextended world financial system. The entire planet would plunge into a mind-numbing depression the likes of which hadn’t been seen since the 1930s.
Treadwell raised a finger, and instantly a waitress appeared to take their breakfast orders. Omelets or easyover with ham or bacon for everyone except O’Connell, who ordered oatmeal with half-and-half, plus yogurt and a dish of cut fruit.
“Thank you, Denise,” Treadwell told the waitress, who blushed. He was a born salesman, who knew everyone’s name.
“Who the hell do you think you are, Hank Paulson?” Dammerman asked, laughing. Paulson, who’d been secretary of the treasury in 2008 during the collapse of the subprime mortgage market, had famous planning breakfasts with the president of the New York branch of the Federal Reserve, the chairman of the Fed, and the comptroller of the Currency, as they hustled to stem the crisis. He ate oatmeal every day for breakfast.
“I’m glad he isn’t here,” O’Connell said.
No one laughed, because it was those four people who’d averted what would have amounted to a collapse of the entire American economy and almost certainly the economies of every industrialized nation. They bailed out the big banks.
“There’ll be no bailout this time,” Treadwell said. “Too big to fail? We won’t give them the time to react. When they realize what has hit them, it’ll all be over.” He smiled. “I wonder what they’ll call it once the dust settles?”
“How about the debt bomb,” Nast said. He liked to lecture people about economics. “It’s the real reason the shit storm is coming, and there’s nothing anyone, and I mean anyone, can do about it.”
There were four types of people in the financial world—in places like Burnham Pike, the markets, and especially the White House: dealmakers, like Treadwell, who was the driving force at BP and a smooth operator. Traders, like Dammerman, with his blue-collar background, the same as most of the market makers who manned the posts on the floor of the NYSE. Geeks, like O’Connell, who understood computers better than she did people. And wonks, like Nast, who were the numbers jockeys, the guys who analyzed company finances, figured out elaborate market algorithms, and wrote economic forecasts—everything he’d done for BP when he’d worked for the firm, and now did for POTUS.
“And we’re going to make a killing by getting into cash, because we know it’s coming,” Dammerman said with a smirk.
“Because we made it happen,” O’Connell agreed.
“Abacus is just the spark that’s going to light a fire that would have come all on its own,” Nast said. “And that’s the beauty of the thing. The world will go to shit, and there’ll be no one to blame. Especially not us.”
“The ‘debt bomb,’” Treadwell said. “I like it.”
“It’s easy,” Nast said. “The world is in too much debt. Pushing the quadrillion-dollar mark. Hell, most countries will never be able to pay it back; they’re having a hard time just keeping up with the interest.
“Since the last crisis, corporate debt has gone through the roof. Companies right now owe more than six trillion dollars plus because the Fed lowered interest rates, which added more fuel to the fire. But instead of expanding production and research, building new factories, hiring more workers, they’re funding stock buybacks to make their investors happy.
“State and municipal pension plans are so underfunded there’s no way in hell employers will be able to meet their obligations to their retirees, and that’s already here, right now, in the short run.
“Household debt is in the stratosphere. Credit cards, houses, cars, college loans. Put together, that adds up to another thirteen trillion dollars and counting.
“And just about every other country is in the same condition or worse. China is choking on debt. Greece is going down the tubes. And Latin America’s debt to us? Forget them ever—and I mean ever—paying it back. Most of those countries are starting to default just on their interest payments.”
Nast stopped for a moment. “Crash the world economy—starting with the NYSE—convert to cash, and we’ll make our fortunes, all right,” he said. “And live like kings.”
“Our virus, Abacus, will start the fire,” Treadwell said, “but how do we know it can’t be put out somehow? The NYSE has an off-site backup computer system. If the main servers on the floor fail, they can go to the second set.”
“I have it covered,” Dammerman said. “Trust me. No backup computer on the planet will save the market once we pull the pin. And our Russian friends will even plant a terrorist bomb on the backup computer just as a diversion.” He laughed, his voice loud in the normally staid dining room.