Russell Blake: Silver Justice

She studied his profile as they rolled to a stop. “How do you go to work every day, Richard, if that’s how it is?”

“Simple. What’s the alternative?”

They both absorbed that.

“Speaking of which, we have an interview to conduct.” Silver drew a few deep breaths, her head reeling, and mentally prepared for her interrogation with the man who had kidnapped her daughter and taken the lives of at least six men.

Silver moved uneasily in her chair and glanced at Richard before returning to regard Howard, who sat opposite, his face a picture of calm. The last hour had involved a painstakingly detailed description of each killing, filled with information only the killer could know. They now had enough to bury him under the jail.

Silver took a sip of water and then reviewed her notes. “Howard, you mentioned you’re not well. Is that correct?” she asked.

“I did? No, I think I mentioned I am dying. Not well to dying is like comparing a paper cut to being fed into a wood chipper.”

“What’s wrong with you?”

“Three months ago I was diagnosed with stage four pancreatic cancer. It’s inoperable. They tried dabbling with chemo, but I didn’t do well with it and decided to abort the treatment — the doctor leveled with me and told me that it wouldn’t change my survival outcome, and I didn’t want to spend my last days on the planet with poison running through my veins.”

“How long do you have to live?”

“What time is it?” Howard cackled a dry hack. “Seriously? If I’m lucky, maybe two months. I feel like shit most days, but I’m still strong. As long as I can keep swinging, I guess there’s some fight left in me.”

“Would it be fair to say that your illness played a large part in your decision to become The Regulator?” Richard asked.

He sneered. “Is this stupid question day? Of course it did. I watched my wife, my daughter, my friends and neighbors, everyone I knew or cared about get flattened by the financial destruction perpetrated by this group, and then I find out I’ll be dead in under six months…you bet your ass it played a part. I did the math. Nobody would ever prosecute any of them. They’re untouchable. So I decided to make a difference. To punish those who thought themselves above dealing with the consequences of their actions.”

“That’s why the methodology of the killings changed,” Silver observed, “because of the significance of the deaths to your loved ones.”

“Asked and answered. We already covered that.”

Silver shifted gears. “Howard, can we go through the stuff we discussed about the crashing of the system? I’ve already taken Richard here through what I could remember, but I wanted him to hear the finer details from you.”

Silver and Richard had agreed that they would pretend ignorance during the interrogation so they could hear Howard’s story.

Richard regarded him. “Silver told me your theory — that the crisis was deliberately caused by a group of like-minded interests working together. And I understand that the mechanism to make the money as the market tanked was credit default swaps and naked short selling — I’m more than familiar with the massive bailouts the government stepped in and gave to AIG and others who wrote the swaps and couldn’t pay them. I remember the debate at the time — that all the government would have had to do was declare all swaps null and void, and there would have been no need for the bailouts — but the big banks would then have not made their windfall profits, so that was shouted down. But there are a few gaps, and I’m interested in hearing how the crash was achieved — the nuts and bolts.”

Howard nodded. “How much do you know about the 1929 crash?”

“A fair amount. I studied it in school. Market manipulation was one of my areas of interest.”

“So you know that it and the ensuing Great Depression were the greatest transfers of wealth in history.”

“I know that a lot of money was made by a small number concentrated in New York and Europe, and the majority of the planet lost almost everything.”

“Right. But it’s not like that wealth disappeared. It went somewhere. As an interesting data point, did you know that the federal government emerged from the Great Depression four times wealthier than when it started? Put simply, at a time when twenty-five percent of the population was starving, the government quadrupled its wealth — in just its gold holdings alone. Doesn’t that strike you as odd — that the government made windfall profits at a time when mothers were feeding their babies from the teats of dogs because they were too starved to do it themselves?”

“Roosevelt made some horrendous mistakes. That’s historical fact.”

“But were they mistakes? Why is it that when I make a mistake I lose, but when the banks and government make a mistake, their wealth multiplies exponentially? Ever wonder about that? Ever wonder how, at the start of the Depression the government had limited power, and by the time it ended it had become a massive social engineering machine that regulated every aspect of an individual’s life?”

“Roosevelt was trying to build a social net for the disadvantaged.”

“Really? He wouldn’t have needed to if he hadn’t devalued the currency forty percent overnight after confiscating all the population’s gold, tightened margin requirements for banks to the point where there was no cash in the system, and insisted on tariffs that made necessary goods incredibly expensive for a population that was starving. You sure those mistakes weren’t so his buddies could steal the nation’s wealth? Most don’t know that he grew up with the wealthiest aristocracy in New York — I’m talking the Astors and the Rockefellers. He despised the common man, but publicly he was their champion. Isn’t it awfully coincidental that his social circle increased its riches unimaginably from his ‘mistakes’ at the direct expense of those he detested? And that his government increased its power in ways that a decade earlier would have been impossible?”

Richard wanted to steer the discussion back to specifics of the 2008 crash. “I won’t argue history with you — this could go on all day. Why don’t you walk me through the exact mechanism that was used to crash the system this time? Because that’s what’s unclear. Let’s say I buy the idea that it was orchestrated. I understand anything can be, in theory. But how, specifically, was it done?”

“Like I said, you get all the biggest banks to create batches of mortgages — securities — and create derivatives based on their performance. They made fortunes selling the securities to the world as AAA-rated paper, so they were delighted to do it.”

“I get that. They take nice, safe mortgages and create pools of them, where they’re intermingled, then sell securities backed by the performance of those mortgages.”

“Right. So what they did was create a mechanism to create garbage loans to pour into that soup of good ones, which is step one. They had their mob-controlled lending companies stuff the pipeline full of crap nobody sane would want — but because the securities were rated investment grade, nobody cared. The pools were performing well even with the junk in them because the terms on the first few years of the loans were ludicrously easy for any borrower to pay — they basically gave borrowers free money on home values that were double their true worth. The mob set up tons of appraisers who committed fraud by inflating values and encouraged the mortgage brokerage industry to commit fraud by lying about everything, using the logic that everyone was doing it. Within a few years, the entire real estate industry was one big fraud, and property values were doubling as if by magic.”