"It's the worst of times, buddy, and the best of times. Whatever dude
once said that didn't know the half of it. He oughta be around now to
check out the Street."
That was Henderson's Georgia Mafia co-conspirator, an irritatingly smug
young man with red hair and acne who dressed entirely in white, right
down to his skinny Italian tie. We were told he went by the handle of
Jim Bob. As he meditated upon Wall Street's macroeconomic
incongruities, he punched a Willie Nelson tape into his boom box and
popped a Coors, pregame warm-up for programming a full-scale assault on
the U.S. securities markets.
Jim Bob allowed as how he'd arrived in the Big Apple four years earlier
with a cardboard suitcase, a finance degree from Georgia Tech, and a
larger than regulation endowment of natural cunning. After a couple of
years' toil in Henderson's quasi-legal vineyards, he'd gone out on his
own, whereupon he'd parlayed his winnings with Bill and the remnants of
a baseball scholarship into what was now a high six-figure "haircut,"
the name options players use for their grubstake. The way he figured
it, he was just hitting his stride.
How, I inquired at one point during that long weekend, had he managed
it?
"Chum, it's idiot simple. You buy into fear, sell into greed, and fuck
fundamentals. Main thing is, if something makes sense, don't do it.
America's in the all-time shit, and Wall Street's oblivious. It's like
everybody's bidding up standing room on the Tttanic. But who cares? You
play options like I do and all you have to worry about is not getting
stupider than the herd. Which ain't necessarily much of a trick."
Stock options, he went on to assert, were like having a credit card in
a whorehouse--a ton of action for what amounted to tip money up front.
No wonder Las Vegas was in trouble, when Wall Street was beckoning our
high rollers to take odds on the direction of the market. Only widows
and orphans, he observed, bought actual securities anymore. That action
was reserved for the halt and lame.
While country singers twanged beer hall soliloquies on the general
increase in faithless women, Jim Bob coded in the brokerage houses and
offshore banks we'd be using, the catalog of stocks in the DNI
portfolio, and our sequence of transactions.
As noted earlier, the financial setup had been handled by Henderson and
friends. Using his connections, he'd opened accounts for hundreds of
dummy corporations in about two dozen offshore banks. He stuck to the
usual no-questions-asked operations like Banca della Svizzera Italiana
and Bank Leu in the Bahamas--the latter a Swiss-owned Nassau laundry
that had, in years past, reportedly destroyed records and lied to the
Securities and Exchange Commission as a favor to certain of America's
more inventive inside traders.
Since the volume of money to be moved was staggering, it would all be
handled by sophisticated telecommunications networks. We would pass it
through the anonymous accounts we'd established, accessed both ways by
computer, and it would never be touched by human hands. DNI's cash
would flash in and out with total cover. Added to that, anybody who
tried to trace us would first have to break through a traditional Swiss
stone wall.
To dump the stock we were planning to exploit fully the new
"globalization" of the financial scene. Now that the National
Association of Securities Dealers had struck a deal with the London and
Tokyo stock exchanges to swap price quotes, worldwide market makers
were buying and selling American securities around the clock. Plenty of
active market-making was happening off the exchange floors as well, at
places like Jeffries out on the coast, which had recently handled a
massive Canadian takeover of an American company overnight, entirely
off-exchange. With all the avenues available it was almost impossible
to track the movement in a given issue. DNI's computers would be
routing sell orders to brokerage firms around the globe, a block here,
a block there, none of them in quantities that would raise eyebrows.
Maybe I also should add that none of the "corporations" Henderson had
set up would be allowed to show a profit, which would simplify Treasury
Department reporting requirements. As a matter of fact, before we were
through, DNI was going to lose billions. But it would all be done
legally, in accordance with SEC regs. It would also lead to a world
financial flap of notable proportions. Nobody would ever take Noda's
money for granted again.
While Tam went over her new program with Jim Bob, pointing out her
special features, Henderson and I found ourselves at reasonably loose
ends. We sat around drinking green tea (God, how I came to hate that
stuff) and puzzling how we'd all managed to get into such a mess. The
major plus, however, was that we finally had Matsuo Noda by the short
and curlies.
Or so we hoped. The problem was, he'd been a player longer than any of
us, and he'd already demonstrated plenty of stamina. How would he
counterattack? The question wasn't if, it was when. For the moment,
though, we seemed to be on our way with clear sailing; in fact, the
communications link with Kyoto was entirely empty. Tanaka also had
clammed up, refusing to talk--beyond a rather firm prediction that our
wholesale divestiture of DNI's assets was an insane act doomed to
failure. I might also add he didn't appear nearly as concerned as the
circumstances would seem to merit. In fact, he was so complacent I
started getting a little uneasy. Finally Bill and I ran his prediction
past young Jim Bob. Could somebody get through to Tam's program and
devise a way to shut us down?
Henderson's increasingly glassy-eyed protege took out enough time from
popping "uppers" and swilling Coors to assure us to the contrary.
"Hell, no way you could stop what we're settin' up here. We got
ourselves what you call a closed system. Everything's
going to be handled by that green-eyed monster over there in the
corner. We got these numbered brokerage accounts all over the place.
Zip, in go the sell orders; zap, out go confirmations. And since none
of the cash sits around, our bank accounts are all just gonna churn.
We'll have billions of buckaroos rollin' at the speed of light. Ain't
nobody gonna be able to get a bead on the action, take my word for it."
Our computer-generated buying and selling, he went on to declare, was
conveniently similar in appearance to the "program" trading of the big
institutional investors, the arbitrage players who routinely sold
millions of dollars of securities in minutes using computers. Thanks to
them, the market these days had been conditioned to accept huge,
unaccountable trades as part of the territory. If somebody dumped
massive blocks of stock unexpectedly, it could mean anything--such as,
the spread between those stocks' prices and some "index future" had
gotten momentarily out of sync. Shuffling securities like poker chips
was the name of the game on the Street these days, so nobody would
really notice or care. The turnover we'd be generating would merely
suggest to the market that various investment-house arbitrage desks
were unwinding positions.
What the heck, I said to Tam, maybe we could unload the better part of
DNI's holdings before Noda struck back. The real key to our attack on
Dai Nippon, however, depended on what happened to that cash after we
turned it around. When I mentioned that, she just crossed her fingers.
By late Sunday night the DNI offices were a clutter of empty Chinese
take-out containers, Kentucky Fried Chicken boxes, and computer
printouts. However, Jim Bob claimed the system looked like a go. He'd
completed a long sequence of test runs, and he was predicting he could
probably swing at least four billion the first day, something in the
nature of a warm-up for grander things to come.
Jim Bob, I should say, was fully as efficient as advertised by
Henderson. Even if he was now flying higher than a moon shot, thanks to
all the pills. He worked methodically, carefully analyzing the program
at every step, double-checking the codes, poring over his verification
printouts for obscure glitches. Mainly, though, he kept one unfocused
eye on the clock, saying he always delivered on time. Point of honor.