T. Bunn - Drummer in the Dark

“The dangers of such institutions are enormous. When Long Term Credit, a Wall Street hedge fund operated by two Nobel Prize winners, collapsed recently, nobody even knew how much outstanding debt they carried. Do you hear what I am saying? Nobody knew. And who was their largest investor? One of the country’s biggest consumer banks. One of the cornerstones of our financial community had given a credit line to this group, and suddenly found itself facing a mountain of debt. How much? At the critical point, when the LTC meltdown was at its peak, it is said they faced sixty billion dollars in assumed liability. Enough to bring it crashing down. And that was just one hedge fund. Six of our top ten banks now operate hedge funds in-house. There are over fifty within our borders. Carrying how much risk? Who knows? Our federal reserve system certainly doesn’t. Why? Because at this point the hedge fund industry and the derivatives trading industry are both totally uncontrolled.”

Wynn could see now why Hutchings had suffered his strokes. The man did not speak, he raged. He flailed his arms and he pounded the podium. He shouted his ire. The longer he spoke, the more furious he became. It was the performance of a man on the edge.

“Banks have utterly forgotten their creed to serve the clients entrusting them with their money. Banks are no longer there to serve the local community. Profits from such ventures are too small, too regulated. Banks are responsible first and foremost to their shareholders, most of whom could not care less about the banks’ traditional role. So banks spend hundreds of millions of dollars, not just in America but all over the developed world, subverting the laws established after the first Great Depression. In the minds of many people far more knowledgeable than myself, it is only a matter of time before a second depression strikes.

“My premise, ladies and gentlemen, is simple. International hedge funds have become the demons of the globalization process. Those banks that have become mired in derivatives and hedged operations are time bombs waiting to explode. They threaten to demolish our entire economic well-being in the process. Globalization is good only so long as it serves. Globalization must earn its place in the world. How? By improving and stabilizing economies.”

The speech was then interrupted by loud cheers and applause. It took Wynn a moment to realize the tumult was both recorded and live. Hutchings’ response was interesting. He showed a great impatience as he waited through the interruption. The applause was not his intention here. He burned with the need to go on.

“But these so-called investment bankers don’t want stability. Stability means balance and predictability, and this kills any chance for extreme profits. Hedge funds and derivatives traders all hold one point in common: They feed on instability. They want chaos. They want dramatic swings. And where they can, they will foster even greater swings. These so-called investment bankers act with utter disregard for the effects of their conduct on the small and the defenseless. It is a replay of the Roaring Twenties, now performed on a global scale. They are the barbarian hordes, threatening the empire with oblivion. They have to be reigned in. They must be tamed.”

Wynn’s final view of Hutchings was cut off by the people in front of him rising to their feet. As the lights rose over the assembly, Wynn caught sight of many faces staring into the now-blank screen with a tragic sense of lost hope and failed dreams. Yet they applauded still, shaming him with their sad fervor.

He turned to the woman beside him and asked, “What does all this have to do with third-world debt?”

But Jackie Havilland rose and left without a word or a backward glance. And the others applauded still.

Sunday

Jackie’s Sunday morning began with a surprise all its very own. Kay Trilling called and asked if she wanted a ride to the hospital where Graham was recovering from surgery. Jackie’s precoffee brain had difficulty wrapping itself around both the words and the woman’s tone. Trilling did not sound friendly, but she certainly had lost her hostile edge. Jackie said, “Recovering?”

“Apparently Graham didn’t have a stroke at all. The doctors are now calling it a subdural bleed. The important thing is he might recover. Graham is still with us. For the moment, that’s enough.”

“Where are you?”

“Outside in the hotel lot. Are you dressed?”

“Five minutes.”

“I’ll get you a coffee. How do you take it?”

“Black.”

“I’m driving a gray Buick.”

Jackie was down in three. Kay Trilling stepped from the car, handed over the cup, said in greeting, “I woke you up, didn’t I.”

“It’s no problem.” She peeled off the top, took the first welcome sip, and scouted the empty lot. “Where’s your entourage?”

“You were expecting the senator to have a dark limo and a few Secret Service in tow?” Today Trilling was dressed in a pastel silk knit suit. She had the sleek look of a woman who battled daily against her age. “That just happens in the movies. In real life, senators and congressmen don’t rank so high. Only presidents and cabinet members get such perks.”

“Tell me about Graham.”

“Apparently a subdural is a slow venous bleed in the membranes between the brain and the skull. A few weeks back, Esther found him laid out in the bathroom with a bump on his head. Everybody, including the doctors, assumed it was a second stroke. The scan showed nothing but the damage apparently from the first stroke, which can happen with these things.”

Nothing could be done about the thrust of Trilling’s jaw, the aggressive set of her shoulders, the way her hands wrestled the wheel, the force of her foot on the pedal. She drove with masculine impatience, holding to the inside lane, paying no attention to the speed limit. With the world hurtling past, Trilling went on, “The doctors say these subdurals keep drawing in other fluid once the actual bleeding stops. This forms a hematoma, and the thing just keeps getting bigger. What alerted them to a possible misdiagnosis was how Graham kept going downhill. This isn’t common with strokes, but is with subdurals. So they drilled a hole in his skull, drained the fluid, and now we’re waiting to see just how much he recovers.”

Trilling waited until they were across the Potomac and heading onto the freeway to ask, “How did it go yesterday in College Park?”

Jackie gave her a slow look. No question from a woman this intense could be called casual. Nor had Jackie forgotten the hostility enveloping their last contact. “If you don’t mind, I think I should wait and report to Esther.”

“Loyalty. I like that in a person. So what did they do when Esther didn’t show up?”

“They played a video of one of the congressman’s earlier talks.”

“Which one?”

“The perils of hedge funds and modern banking.”

“I remember that. Landed him in a world of hot water. Graham never did learn how to mince words.” A swift glance. “What did you think of it?”

Wrenching. No other word would do. Not just because of the passion in Hutchings’ voice, or the fact that the topic was intimately close to her own studies. The assembly’s response, their fervor and depth of passion, had made her ashamed of her own limited horizons.

The senator was still waiting for her response. Jackie asked, “Are you married?”

If the senator found the change of subject startling, she gave no sign. “Twenty-eight years next month. He’s an insurance broker. And the reason I stay sane. One daughter, she’s been a sophomore at Stanford for four years. Majors in lost causes. Last year it was strip mining, this year it’s ending the reign of some South American dictator, I forget which. What about you?”