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  “The extra two mil comes out of your pocket,” Treadwell said.

  Dammerman chuckled. “After tomorrow I’ll be able to afford it. Bykov vouches for the shooters, and so does Butch. So let’s just play it as it lays.”

  “Are we sure we even need to go that far?” Treadwell asked. “Are we sure that Cassy can stop us?”

  “Julia has her doubts. She thinks that no one can crack her program, especially after the Amsterdam nerds spiced it up. But just in case she can, I say let’s eliminate the problem permanently. Cassy Levin disappears. Has an accident, ends up in the East River with all the other trash.”

  “What about family, maybe friends who might miss her?”

  “She’s got her young pal working with her downstairs, but she’s the real brains.”

  “Do we need to make him disappear as well?”

  Dammerman spread his hands. “I don’t think it’s necessary. One of our people ending up in the East River we can get away with, but two who’ve worked side by side would be too much of a stretch.”

  “I don’t want any of this coming back at us,” Treadwell said. He was more concerned about this issue than Schneider’s bringing up Abacus, or Betty Ladd taking a shot across their bow.

  “Cassy Levin might have the chops to stop the virus, but her pal Donni Imani sure the hell doesn’t,” Dammerman said. “Abacus goes into the system before opening bell tomorrow, and the shit will hit the fan globally, making us the heroes. The rich heroes. BP corners the market. Reid Treadwell—Robin Hood and Sir Galahad rolled into one.”

  “I suggest that you make some side bets. I will.”

  “You mean short the market? Already done,” Dammerman said.

  “I put ten mil to short a bunch of S&P 500 EFTs through one of my banks in the islands.”

  “I did the same with twenty mil.”

  “You son of a bitch,” Treadwell said with a sort of backhanded admiration. His COO was rough around the edges but cunning.

  Treasury had cracked down several years ago on offshore accounts because wealthy Americans used them to avoid paying taxes. Major banks in important nations like Switzerland, which had sheltered these secret money stashes, had gone along with the new rules. But banks in places like Hong Kong and Panama had given Treasury nothing more than lip service.

  Treadwell and Dammerman were using money from those island accounts to wager that the entire market would plummet. The banks furnished phantom investors to do the trades. Basically they were borrowing shares of investment pools, called exchange-traded funds, or ETFs, that held the stocks of the S&P 500, which covered 70 percent of the U.S. market.

  They would sell the borrowed ETF shares, wait for the S&P 500 to tumble, then buy back the shares at the much lower level. Their profit would be the difference between the higher price they sold for and the lower price they paid to reclaim the shares.

  “O’Connell doesn’t know how to do short, and she’s too worried about her nerds downstairs. And Nast is under the microscope in D.C., and doesn’t dare,” Dammerman said. “More for us.”

  Treadwell’s secretary buzzed. “Ms. Ladd will meet with you at 1792 right now,” she said. “And…”

  “And what, Ash?”

  “She wanted me to tell you something else.”

  “Yes?”

  “She said that she was going to cut off your balls and shove them down your throat.”

  FOUR

  WARNING SIGNS

  21

  Don Pennington was mulling over how to treat the warning from Spencer Nast when his secretary buzzed him. He couldn’t possibly ignore the president’s chief economic adviser but the man was a sleazy, uncultured prick and hadn’t changed since Yale. And he had the balls to waltz in here and hold the secretary of Treasury job like a carrot in front of a donkey.

  He hit the key. “Yes?”

  “Ms. Ladd is on one for you, sir.”

  “Thanks,” Pennington said and picked up his phone, hesitating for just a moment before pressing 1.

  In his estimation Ladd was a smart, efficient woman who’d done a good job keeping the NYSE relevant when electronic trading had all but put the exchange in a back corner. They’d known each other since business school at the University of Chicago, and had bumped into each other numerous times at tony social events in the Hamptons and here in town.

  Some of the old-school Wall Street types didn’t like her take-charge leadership style because she was a woman. But Pennington didn’t give a damn about any of that; he just didn’t care for her because he felt she didn’t respect him as the chief of the New York Fed.

  “Hey, Betty, lovely to hear from you,” he said with a warmth that both of them knew was not genuine.

  “I just had an interesting visit with Seymour Schneider,” she said.

  “I didn’t think either of you ever left the floor during trading; does he have a bee in his bonnet?”

  “You could say that,” she said. “He thinks that we’re on the brink of a meltdown even worse than ’08.”

  Pennington sat up straight. She had his attention. “What’d he have to say?”

  “He’s like a crystal ball, and he’s never wrong.”

  “Seymour is a good man, no doubt about it.”

  “Even though he works for BP,” Ladd said. “But I called to find out if you’ve heard any rumblings from anywhere.”

  “A word or two here and there,” he said, though he had no intention of going into any of the details that Nast had warned him about.

  “It’s me you’re talking to, Don, so cut the bullshit.”

  Pennington held off for a beat or two. “Nast came to see me just a little while ago.”

  “Oh?”

  “He brought up the China problem, especially the PBOC’s probable response if some of its banks start to go down, which he thinks is a very real possibility.”

  “Shit, Seymour was right,” Ladd said. “But just a word of caution: If Spencer promised you something, don’t believe him. He’s in Reid Treadwell’s pocket, even though he’s the president’s man. And you know what they call him, don’t you?”

  “Nasty.”

  “Yeah. And Reid is a quantum leap above that, and I do know what I’m talking about.”

  Everyone knew about the romance, and how he’d dumped her. But just about everyone else in the business gravitated toward Treadwell. He was a superstar. A few called him the JFK of the market because of his looks, his charm, and his savvy.

  But Pennington had also heard the story from a couple of different sources that BP’s boorish COO, Clyde Dammerman, was drunk at a party in Palm Beach and said something to the effect that when you peel away all the Cary Grant savoir faire crap, Reid made Attila the Hun look like Mr. Rogers.

  “I’m not going to make any sudden moves,” he said.

  “I understand, but I’m smelling something bad here. It’s why I called. And my suggestion would be to have a chat with Miller.” Joseph S. Miller was chairman of the Federal Reserve.

  “About what, exactly?”

  “If things actually do go south the way Seymour and Nasty suggest they might, then you need to be at the table making decisions, the same as your predecessor did in ’08. Call Miller right now.”

  22

  Joseph Miller looked and acted like a chairman of the Federal Reserve should: snow-white hair, haughty bearing, sonorous voice, and the florid vocabulary of a first-class pedant. He was at his enormous desk in his enormous book-lined office studying a spreadsheet showing the latest flow of money into various international funds when his assistant rang.

  “Mr. Pennington has called with a question, sir.”

  As far as Miller was concerned, Pennington was a lightweight. Unlike most of the top people in the Fed, Don Pennington wasn’t a Ph.D. in economics, and in serious meetings it was obvious that the man didn’t know what was being discussed.

  By law a committee of the Wall Street establishment chose the head of the New York Federal Reserve Bank,
and Pennington was a golfing buddy with a lot of them. In addition he had contributed heavily to Farmer’s presidential campaign, and under pressure from the White House, Miller had reluctantly rubber-stamped the appointment. Now Don Pennington was the second-most-important figure in the Federal Reserve hierarchy.

  Miller picked up the phone. “Good morning, Don. You have a question for me?”

  “Spencer Nast stopped by to have a chat this morning, Mr. Chairman.”

  “What for?”

  “He warned me that another financial disaster is coming our way, and it’ll probably be a lot worse than ’08.”

  “If that scumbag called on a rainy day to warn that showers were likely, you’d be hard-pressed to believe him,” Miller said. “Did he give you any details?”

  “He’s worried about the Chinese debt bomb. Said it’s about to explode. He had the numbers and frankly, Mr. Chairman, he sounded very convincing.”

  “He always does.”

  “What should we do, if anything?”

  “I’ll make a few calls, see if anyone else is coming to the same conclusion. If it comes to anything, I’ll give you the heads-up on what the New York Fed’s response will be. Meanwhile, don’t share this with anyone else. Just keep a lid on it, Don. Please.”

  “I’m part of the decision-making loop. How can I help?”

  “Go to lunch,” Miller said. “You’re good at that.” And he hung up.

  23

  Miller used his cell phone to speed-dial Secretary of the Treasury Robert Nichols. The Fed techs had assured him that their phones were hackproof.

  Nichols answered on the first ring. “Good morning, Joseph, how’s Marge?”

  Marge was Miller’s wife, and they were close friends with Nichols and his wife, Judy. “Looking forward to seeing you guys at the club Friday night. But that’s not why I called.”

  “What’s on your mind?”

  “Have you been getting any rumbles from the White House about a financial crisis hitting the Chinese, and maybe spreading our way?”

  “Practically every day, depending on who’s talking.”

  “Don Pennington called and said Spence Nast paid him a visit to warn him about the China thing, specifically Liu Feng’s supposed plan to block the PBOC from bailing out the small banks whose debt load has become critical.”

  “That’s common knowledge. What else did he say?”

  “He thought that it was imminent,” Miller said.

  He had a lot of respect for the secretary of the Treasury, who had earned his economics doctorate at Princeton and during the last financial crisis had served on the Fed’s board of governors in Washington. Most of what happened to save the American economy in ’08 and ’09 was his idea. It had helped that Nichols’s specialty was economic slumps. His book, The Great Depression, had won the Pulitzer Prize.

  “Well, if it actually comes to the point where they start reneging on their bond payments to us, yes, it would become a hell of a mess.”

  “Maybe we should think about mobilizing right now, in case the worst does happen. And Congress just might have to become involved like it did the last time.”

  “Reluctantly.”

  “Yes, but Paulson was convincing, just like you can be,” Miller said.

  Nichols had a plain-speaking style that helped him get along with the politicians on the Hill, unlike Miller, who was thought to be capable but aloof and sometimes arrogant.

  “I’m sure as hell not going to take this to the White House. Nast would fuck it up royally.”

  “I agree, so it’ll have to be like ’08 and ’09 again when Hank Paulson, Ben Bernanke, and Tim Geithner took the lead in the bailout,” Miller said.

  “It means you and I will have to step up to the plate, and I’ll leave it to you to tell Pennington what to do,” Nichols agreed.

  “If it comes to that.”

  “God forbid,” Nichols said.

  “By the way, Bob, is there any truth to the rumor that you want to quit as secretary next year?”

  “Nast is running around telling that to anyone who’ll listen. But even if it were true, which it isn’t, I’d stick around to see this thing to the end.”

  “You’re the expert on depressions,” Miller said. “If Hank and the others hadn’t taken charge in ’08, what would have happened to us?”

  “Unemployment, to start with. In ’08 it peaked at ten percent. In the thirties it hit twenty-five percent. But what worries me most is what would happen if we had to spend as much as Roosevelt, or for that matter, Bush and Obama, to pull us back from the brink of a total economic apocalypse.”

  “I think I know where you’re going with this, and it gives me a massive migraine.”

  “Our debt is way up, greater than in ’08 and a hell of a lot bigger than in the thirties. The question is: What if we couldn’t afford to pay off all the unemployment claims or bail out the banks so they wouldn’t fail? What happens if we couldn’t borrow more money because no one would trust us to repay, on top of all the other debt we’ve accumulated? That’s what gives me the sweats.”

  “This won’t be easy, no matter what,” Miller said.

  “If China does go down, and our debt load is already at the limit, let’s hope that nothing else happens.”

  “It’d better not, Mr. Secretary,” Miller said. And he couldn’t help but feel that they were adrift at sea with an impossibly heavy anvil around their necks.

  24

  Yuri Bykov hadn’t liked the BP money man whom Butch Hardy had brought over earlier, and he tended not to trust men he didn’t like. It wasn’t until the first half of the two million promised showed up as an electronic transfer to their Cayman Island account that he made the phone call to Brighton Beach.

  A man whose voice he didn’t recognize answered. “Da?”

  “I want to talk to Leonid.”

  “Who the fuck is this?”

  “Ne tvoye delo.” None of your fucking business. “Put Leonid on.”

  Leonid Anosov, an old friend from boyhood outside Vladivostok in Russia’s far east, came on the line a minute later. “Who the fuck wants me?”

  “I have a job for you, unless you’re too lazy these days to work.”

  “You old bastard, are you here in the States?”

  “Just across the bay from you,” Bykov said, and he gave him the address. “Ask at the desk for John Dugan. I’ll call and let them know that Mr. Olsen is expected.”

  “When?”

  “Within the hour. Can you be here?”

  “Is it a mokrie dela?” Anosov asked. It was the old KGB’s term for “wet work”—the spilling of blood, assassination.

  “Da,” Bykov said. “I’ll need you and one other operator. Two-fifty large.”

  Anosov hesitated. Like Bykov he had been trained as a Spetsnaz operator, where one of the first rules of engagement was to trust no one.

  “Two-fifty U.S. for each of you,” Bykov said.

  “I’ll take the whole thing and divide it my way. Agreed?”

  “Soglasvano,” Bykov said.

  “Do you have the equipment?”

  “Bring your own.”

  “Valentin Panov will be my number two.”

  “I don’t know the name.”

  “He came a few years after us,” Anosov said.

  “Can you trust him?”

  Anosov laughed. “With my mother, but not my girlfriend.”

  “Bring your account number, and I’ll transfer the money.”

  “Cash,” Anosov said.

  “As you wish, tovarishch,” Bykov said, and he broke the connection.

  25

  Arkadi Zimin, who had come out of the bathroom as Bykov was making the call, was grinning. “We’ll make another tidy profit on the side bet, and Leonid gets to do the real work.”

  Bykov smiled. “If you can’t fuck your friends, who can you fuck?”

  He phoned Butch Hardy’s personal cell phone number. “The help we need from Brooklyn will b
e here within the hour.”

  “Can we trust them?”

  “I wouldn’t subcontract to anyone else,” Bykov said. “If the broad tries to leave before my people get here, slow her down.”

  “No sweat,” Hardy said.

  “I’ll need the pictures of her before then. And I’m going to need an extra five hundred thousand.”

  “We agreed on half of the two million, which has already been paid into your account in the blind, and half when the job is done.”

  “These guys will only work for cash. I need five hundred now. Send it here by runner along with the photographs. One hour.”

  Hardy hesitated for a beat. “I’ll see what I can do.”

  “Just do it,” Bykov said, and he hung up.

  He called his people into the kitchen, where he poured each of them a chilled vodka in small glasses. “Gentlemen, nostrovia,” he said and drank his down, slamming the glass on the counter.

  The other three did the same.

  “Our next drink will be on the plane back to Moscow,” Bykov said. “Do we understand each other?”

  They were professionals who’d been together for a number of years, working mostly out of Moscow and mostly for mob bosses who wanted someone eliminated, or an establishment blown up with all its employees inside, and there was no need to tell them something like that. But it was ritual, and they all nodded.

  “Let’s go over the drill one last time. Two operators from Brighton Beach will be arriving within the hour. It will be their job to handle the woman from the bank. How they deal with her will be their problem, and we will not get involved.”

  “Will they be bringing her here?” Zimin asked. He was their bomb expert.

  “No,” Bykov said. “And a word of caution: They know that we are here to do a job, but they will not ask what it is. If they do, say nothing. In any event they’ll only be with us for a short period until the woman is on the move.”

  No one said a thing, waiting for Bykov to continue.

  “We’ll leave here at 0830. Viktor will be driving the van, with Arkadi in the rear taking care of baby.” Viktor Kolchin had come up the ranks in Spetsnaz a couple of years behind Bykov, and his was a steady hand. He and Zimin made a competent team.