Absolute Risk (31 page)

V
ice President Wallace sat at the head of the conference table in the situation room thinking that the two men whose judgment had guided him throughout his political career might as well be dead: President McCormack was in a coma and former president Harris would likely be implicated in a crime.

Looking across at Abrams and Casher, Wallace realized that the president trusting them more than the secretaries of treasury and state, maybe said more about him than about them, but it was irrelevant. The treasury secretary was already in Davos for the World Economic Forum and the secretary of state was in the midst of global warming treaty negotiations in Japan.

Wallace didn’t want Graham Gage in the room at all, didn’t understand his motives, except maybe the pressure he felt to get his wife out of China. And it made Wallace suspicious, that the route Gage had traveled to discover the scheme had taken him through one twisted mind after another: Hennessy, Ibrahim, Minsky.

In the end, he had to agree with Casher: Everyone who knew what the country was facing must stay together until a decision had been made. It was the only way to ensure that there wouldn’t be a leak that would trigger the collapse. Even the Secret Service agents assigned to Wallace had been sent to the perimeters so nothing could be overheard.

Except that Gage’s gaze from where he stood leaning against the paneled wall gave Wallace a chill, like a frozen wind against his bare skin, like being exposed to the elements. Gage had been deferential toward the office of the vice president only in manner, not in substance, as though he could see through the constitutional form and into the heart of Wallace’s personal weaknesses and uncertainties, and as though Gage already knew how this would all end.

Wallace felt his body move toward the table, an unthinking, almost gravitational force sliding his chair closer and rolling his shoulders forward. The movement gave him a sense of having closed a circle with Casher and Abrams, but then he felt a moment of vertigo, for he knew that soon he’d have to push back again and sit up and make a decision.

“Try to make it simple,” Wallace said, looking back and forth between Abrams and Casher. “And in English.” He pointed across the room toward the blank wall-sized monitor, and then looked at Gage, arms folded over his chest. “We need to make sure that there will be no misunderstandings when your wife translates what we say into Mandarin for the general.”

Abrams rose from his chair and walked to a whiteboard.

“I’ll smooth the edges of this thing by using round numbers,” Abrams said. “And go step by step.”

Heads nodded.

“First, the Chinese Central Committee decided that debt levels in the U.S. had passed the point at which the principal amount of the treasury bonds they held could be paid back. In fact, they estimated that in five years the U.S. would even default on the interest payments—I’m not saying they were right or wrong. It’s irrelevant at this point.”

Wallace caught Abrams’s eye and said, “That’s where the Group of Twelve came in.”

Abrams nodded. “The idea was for the Group of Twelve to use the bonds as collateral for loans they needed to buy hard assets: land, buildings, mines, forests, oil leases. The Central Committee fronted the bonds to the Group of Twelve, which used them to secure loans from Relative Growth. In effect, a trillion dollars of bonds was turned into a trillion-dollar loan, turning what they considered dead paper into live assets.”

Abrams paused and looked around the room.

“Remember, it appeared in the Treasury Department records that we were still paying interest on these bonds to the Chinese government.”

Abrams waited until he was certain Wallace understood, then said, “The Group paid interest on the loans as the years went along, with a balloon payment at the end, like an interest-only mortgage. When that date arrived they could either pay back the principal in cash or simply transfer the bonds over.”

Wallace raised a finger to get Abrams to pause.

“Which means that if the bonds had gone up in value,” Wallace said, “the Group would keep them and repay the loans to Relative Growth in cash. But if the bonds had gone down, they’d repay Relative Growth with the bonds.”

“That’s what Minsky thought and that’s why he was willing to make the bet. But the Group had no intention of paying a trillion dollars back in cash. Their plan from the start was to surrender the bonds to Relative Growth, but only after they forced what we estimate will be an eighty percent collapse in their value.”

“I don’t get it,” Wallace said. “What difference does it make to the Group what the bonds were worth? They’re giving them up anyway.”

“You’ve just hit on the genius of the plan,” Abrams said. “The Central Committee was so focused on ridding themselves of the bonds that they agreed to be paid back in cash based on the bonds’ value on the repayment date.”

“And that’s on Monday at 9
a.m.,
Hong Kong time,” Casher said, “based on the evidence we’ve collected from Ibrahim’s computer.”

Wallace looked back and forth between Casher and Gage. He wished Casher had used the word “facts” instead of “evidence,” for evidence only suggests, while facts tell. But that thought was swept away as Wallace’s mind caught up with the implications of what Abrams was saying.

“If I understand you,” Wallace said, “an eighty percent collapse means that the Group plans to pay the Chinese government only two hundred billion dollars for what was once a trillion dollars’ worth of bonds?”

“Exactly.

Wallace slammed the table. “You mean these crooks are going to rip off the Chinese people for eight hundred million dollars and Relative Growth for another eight hundred million? “

Abrams nodded.

“It’s worse than that. We estimate that the total losses to Relative Growth, its investors, the Chinese government, the banks, and the other hedge funds that lent money to Relative Growth will be closer to five trillion. And when it becomes clear that Relative Growth doesn’t have even a fraction of what they need to pay everyone back, the entire international banking system will collapse.”

“In a matter of a week,” Casher said, “grocery store shelves will be empty, service stations will run out of gas, pharmacies and hospitals will run out of medicines, people will be arming themselves to protect what they have.”

“What kind of monster created this thing?” Wallace asked, and then saw Gage push off from the wall. Wallace knew it was coming, for Gage had stood there like the number twelve on a clock, waiting for the second hand to arrive.

“Ibrahim,” Gage said. “And we created him. Just like we created Minsky and the Group of Twelve and your pal Harris who gave them cover while they—“

Wallace threw his hands up. “Don’t bring Harris into—“

“You don’t think he suspected what they were up to? He didn’t believe that audit for a second. He was just too much of a coward to ask the right questions and demand the truth. He just wanted to find a way to get out, leaving his reputation intact.”

Wallace lowered his hands and exhaled. Gage was right. That had been Harris’s message, and the real reason he wanted to extricate himself from the board of Relative Growth. And Wallace knew that he wouldn’t be able to save him.

Wallace looked over at the videoconferencing monitor.

“Why don’t we admit our part in this,” Wallace said, “and then ask the Chinese government to arrest the Group of Twelve and seize their assets. That way no one loses anything.”

“Seize their assets where?” Gage asked. “The money they stole is invested outside of China, in thousands of places. It could take a decade. And they have no control over Relative Growth or over Minsky’s currency attack. Ibrahim decentralized it so that only Minsky would have a single switch to turn it off.”

“If we had another twenty-four or forty-eight hours,” Casher said, “time to break into Relative Growth’s Cayman Island headquarters, then we could stop it.” He then shrugged and shook his head. “But we don’t.”

M
r. President—“

Cooper Wallace shook his head, cutting off Reverend Manton Roberts. He leaned back on the couch in the president’s study and looked over at Roberts balanced on the cushion edge.

“Please don’t call me that. As long as Tom McCormack has a chance to recover, he’s still the president of the United States.”

Roberts raised his stubby, fat-creased hands. Wallace wasn’t sure whether it was in defense or in surrender. Roberts stretched them higher, palms up, and then looked heavenward. “And I pray every moment for his recovery.”

“What I need, and the reason I asked you here, is that I need you to pray with me and to give me guidance.”

Roberts lowered his arms. “I’m honored.”

Wallace felt the presence of Billy Graham in the room. A dozen presidents had sat where he sat now, bowing their heads as the evangelist spoke, but none of them faced the decision that he would have to make.

“But to do that will require that I disclose some matters that demand not just discretion on your part, but absolute confidentiality.”

“Of course I—“

“Not so fast. At some point it may mean going to jail.”

Roberts’s brows furrowed. “You haven’t committed a crime, have you?”

Wallace shook his head. “Not yet. It’s more in the realm of state secrets, but eventually there may be—there will be—hearings about my conduct. What I knew. When I knew it. Who stood to gain. Who stood to lose.”

“Maybe you should go to Congress now. Isn’t there some procedure—“

“There’d be too much danger of triggering precisely what I’m trying to avoid.”

Roberts shifted his body more toward Wallace, who felt the couch sag and rebound under his weight. “You’re being a little too cryptic.”

Wallace nodded. “According to Milton Abrams …” He watched Roberts struggle to repress a display of disgust. “We are on the verge of an attack on our economy.”

“Why should you believe Abrams? “

The distain in Roberts’s words made it sound to Wallace as if Roberts had asked,
Why should you believe the Jew?
For all his biblical wisdom, Wallace recognized that one of Roberts’s failings was that he loved Jews only in the abstract, in the way one pities stray dogs awaiting euthanasia at the pound: precious, but doomed to the terrors of the Apocalypse. In the concrete present, in the flesh and blood and black hair and dark eyes and Semitic noses, they were unredeemed Christ killers.

“We’ve confirmed most of what he’s saying.”

“Most?”

“Most. If I knew for certain, I’d have already found a way out of this and acted on it.”

“I see.”

Roberts pointed at the carpet under Wallace’s feet and they slid down to their knees.

“Dear Lord, please guide your servant Cooper Wallace as he faces the challenges of his office. Thou has created the great United States and it has grown according to Thy will and Thou has sent this good and courageous man to lead it. May he be as confident as a sleepwalker led by Thee through a minefield toward the Promised Land. Thou has always granted victory to those most worthy. Though we see but through the glass darkly, Thou sees all.”

Roberts paused for a long moment, and then said, “Amen.”

Wallace eased himself back onto the couch. Roberts pushed his hand down onto the edge of the cushion, struggling to jack his body up from the floor. He grunted as he pulled one knee up. Wallace stood and reached down a hand. Roberts accepted it and then rocked forward, leveraging himself high enough to slide onto the cushion. He leaned back and straightened his suit jacket. Wallace unbuttoned his.

“In … the end,” Roberts said, his breathing heavy from the exertion, “all … we can do … is let the invisible hand of God … work through us.”

Wallace gazed at the bulbous red face—one not of a holy man, but of a glutton—and felt a natal rage rising within him and an inarticulate thrashing: at himself for not listening to President McCormack, and at the sudden meaninglessness of the world, his faith, and the faith of his father, now seeming more like fog, than light.

“And if we’re wrong,” Wallace said, “He forces us to walk into hell on a road we’ve paved with our good intentions.”

Roberts smiled his Sunday-morning-let-us-read-from-Scripture smile. “That’s what our faith is for, to bear us forward in the face of our doubts.” He raised a finger. “Yea, though I walk through the valley of the shadow of death, I will fear no evil: For thou art with me.”

Wallace stared and stared and stared at Roberts until his beatific smile faded into one of awkward uncertainty, and then asked, “The question is not whether God is with me, Manton. But whether you are.”

G
age held his breath as the teleconference monitor in the situation room flashed. He had no reason to trust General Shi Rong-bang, now appearing on the screen with Faith sitting to his left. He’d already guessed what General Shi planned to do with Old Cat once he’d served his purposes, but was terrified of what Shi would do with Faith once she’d served hers.

Standing against the wall behind Wallace, Casher, and Abrams, Gage could see two sheets of paper lying on the table in front of General Shi. It was clear that he intended for them to be seen, and they all knew that the discussion would end with them.

For a moment Gage felt grateful that Ibrahim had broken down, and hoped that the catatonic world of nothingness he now occupied felt safer than the reality that would’ve confronted him here.

Gage watched Faith translate the introductions, her eyes staring back at him. He could feel his heart beating, and knew it was doing so in time with hers. The official PLA translator on the opposite side of General Shi nodded as Faith reached the end of each sentence.

General Shi sat without expression, monklike in his impassivity, his unadorned uniform sagging on his body.

Gage had listened in on the earlier discussion between Abrams on one side and the head of the Chinese Central Bank on the other and knew what both sides had come to understand about the origins of the crisis.

Except that Abrams hadn’t disclosed that Minsky was dead and that his secrets about what would trigger the collapse, and how to stop it, had died with him.

“Mr. Vice President,” General Shi began, “we both know that to a large extent, the resolution to this crisis rests with you.” He waited for Faith to translate, and then continued. “All we have to offer is our cooperation, but there is a condition.”

Wallace didn’t respond.

“My single concern,” Shi continued, “is with the stability of the People’s Republic of China. And there is only one way to end the current troubles, short of violent suppression: punishment of those responsible for the crimes committed against the people of China. I have a much freer hand in the matter than you, for China is not a nation of laws. As long as I have the power, I’ll decide what a crime is and how it will be punished. I’ll decide what a contract is. I’ll decide who owns what. You don’t have that power. Your wrists are bound by legal handcuffs.”

Shi paused, but not as though he was waiting for an answer, then said, “I used to be jealous of the American legal system, but now I see that when law and justice diverge, you are helpless to act.”

Gage suspected that Shi was only jealous in the abstract.

In the concrete, he’d always wanted—needed—the power.

“Assuming we come to an agreement,” Shi said, “I’ll use my authority to abrogate the contract between the Central Committee and the Group of Twelve. The bonds will remain in the hands of the Chinese government. That way, they will maintain their value. That act, however, will leave the Relative Growth Funds naked, with no security to back up its trillions of dollars of obligations.”

Gage saw Abrams’s body tense, and knew what he was thinking. The Chinese could walk away with both the bonds
and
all the assets purchased with the Relative Growth money.

Abrams cast a glance at Wallace, as if to ask whether the vice president understood the implications.

Wallace nodded without looking over.

“I think it’s time for you to tell us what you want,” Wallace said.

Shi held up one piece of paper in his left hand. “This is a list of our Group of Twelve.” He held up the other sheet in his right hand. “This is your group of twelve, including the CEOs of your old company, Spectrum, along with that of RAID and ten others who’ve paid the largest bribes in China and poisoned our people.”

Shi lowered his left hand and turned the sheet facedown on the table.

Gage saw Faith swallow and her eyes widen.

Shi looked over at her. “No,” he said, “they haven’t been executed.” He looked back at Wallace. “But at the proper moment they’ll be arrested. I want you to do the same with yours. And I want the Japanese and the British and the Germans and the Taiwanese to arrest the ones on the lists I’ve made up for them.”

Shi looked at Casher and said, “I suspect that your lists and mine contain the same names.”

“You’re asking me to eliminate the cream of worldwide corporate leadership,” Wallace said.

Shi lowered the second sheet and stared at Wallace.

“You mean the scum.” Shi rose. “I’ll need your answer in two hours.”

The screen went dark.

Gage glanced down at his watch, but his mind still saw Faith’s frightened, weary eyes.

Wallace bit his lip as he stared at Abrams, then said, “He doesn’t know that without Minsky we have no hope at all of turning this thing off.”

“And that if even a hint of any of this gets out,” Abrams said, “currencies will begin gyrating, Minsky’s algorithmic trading program will activate, and we’ll go into a black hole.”

Wallace raised his palm toward Abrams. “And we don’t even know if all of this is real.”

Gage felt a flash of rage. Backtracking and pretending it wasn’t real was the way Wallace had chosen to excuse his inaction and to escape responsibility. Abrams looked back and caught Gage’s eye and shook his head as if to say:
Give him time.

Wallace stood, and said, “I need to meet with someone for a few minutes.” He then walked out of the room.

“Who?” Gage asked Abrams.

“I think Manton Roberts is waiting in his office.”

Gage rolled his eyes. “Not only is Wallace a coward, but he’s delusional. He thinks Billy Graham is sitting in there, but it’s just a lunatic.”