Andrew Gross - Reckless

“I can’t put everything together. I can’t put together why this was done or ultimately who benefited from what took place. There may even be others involved I haven’t identified yet. But there was a plot, sir, make no mistake. A plot to destabilize the U.S. economy by taking advantage of weaknesses in the financial system. Hassani should be detained-today. He should be made to provide answers about his activities in this plot. If he was carrying a bomb you would have no problem picking up the phone to the FBI immediately. This is no less a bomb, and it caused more damage than any device they could have detonated. I wish I didn’t have to come to you on this, sir.”

“And the reason,” Keaton asked, “you’re not proceeding through normal channels is…?”

“You mentioned London, Mr. Secretary. You know what happened there. Somehow someone beat us to both Thibault and al-Bashir before we could take them in. Two days earlier, Thibault had been killed in Serbia. It was made to look like a retribution killing for his offenses in the war. But no one knew about that, sir. And no one knew he was back in his home village.

“I don’t know who it is,” she continued. “Hassani, I assume, covering his tracks. But only a handful of people knew we had placed Thibault and Hassani together. In light of this I couldn’t take the chance of what I had on Hassani finding its way into the wrong hands. I felt I had to go directly to you with this, sir. I hope you understand.”

Thomas Keaton’s jaw grew taut and he glanced toward Mitch Hastings with a sobering stare. The lawyer eyed him back with an equally concerned expression.

“Very serious stuff,” he said, turning back to Naomi. “You were absolutely right to bring this to me, Agent Blum.”

Peter Simons was skimming the Wall Street Journal in the back of his company Maybach, making his way down the FDR. He had an eight thirty breakfast with the head of the New York Fed in the Washington Room at their headquarters on Liberty Street. Along with the chiefs of Goldman, Citi, and Blackstone, some of the most powerful people in finance. The government had to craft a response to the deepening Wall Street crisis, a plan for how to hold the system together. And who better to consult with than the very people most responsible for pushing it over the edge? The historic meeting room on the Fed’s thirteenth floor was three stories tall and completely windowless. In the most symbolic sense, to lock in whatever was discussed within its hallowed walls.

You didn’t have to be a genius, Peter Simons knew, to have seen it all coming. The geniuses were all responsible for creating the mess. For years, the world had been lulled to sleep by the toxic double dose of credit and debt. The banks, the rating bureaus, the governance agencies tasked with keeping it all together. Even the insurance giants who devised the logarithmic schemes to offset all the risk, like AIG. The system was corroded, rotted from the core. And, as most failed to understand, completely rigged. Deregulation had allowed the banks to lever their capital up at forty to one. Rating agencies were collecting fees from the very firms they were assigned to vet. Complex derivatives and credit-default swaps no one understood drove trading volumes. The mortgage market had melted down to dross. The whole rotted mess spiraled upward in an unimpeded arc, throwing off record profits for everyone. Until it stopped.

Until it simply didn’t anymore. Until the winds changed. No, you didn’t have to be a genius, Simons knew. Certainly he wasn’t. You just had to be willing to do something about it. To make sure not to be blown away by the gale.

And Simons had never been one to be pushed aside by a little shift in the winds. His father had been a middling merchant outside of Philadelphia, and from the beginning, Simons had dreams that he was destined for higher things. He had run track in high school, still held the record for the four hundred at his school. Now the stadium was named after him. At Yale, he had been invited into Skull and Bones. The day he had been asked into the exclusive club was one of the proudest of his life. It had made his ascent to the top of Wall Street almost a self-fulfilling plan. Opened doors to the right contacts. There was always a hand above him guiding his way. No one worked harder. No one sold his ass off like he had. He knew he wasn’t one of the “geniuses.” And he surely had no pedigree that was going to pave his way.

First, he became head of the trading floor at Reynolds, when it was a quiet, retail-based institution. Then he was put in charge of the bond department, riding the wave of growth in the nineties. He built the firm from a quiet old-line brokerage house into the new model of leading investment banks in the world. He rode the crest of the subprime rally all the way to the top. But the signs became clear-when everyone else started piling on, he wasn’t about to let it take him down as well. That was the difference between him and many of his peers. Even the people who, in fifteen minutes, were about to sit around the same table with him and thrash over how to right the ship in this storm.

In school, Simons had studied the Austrian economist Joseph Schumpeter, and it had formed his view that the system was made anew by every generation. Capitalism wasn’t static. It was constantly remaking itself, like a living organism. Innovation cleansed the system. Behemoths rose and fall. Creative destruction. Nature did it, in evolution, in great forests ravaged by fire. Schumpeter called it being carried away by the “gale.”

The idea had first occurred to him a year ago over drinks with Hassani in Dubai, after the Bahraini had helped facilitate a needed investment by the royal family. How, if they could just influence events, tip the scale, you might say, in their favor, despite the coming downturn, everyone could win. It was all inevitable anyway. Nature was going to take its course. Simons had the network of like-minded people. People to make it happen on a global scale. Hassani would just need to implement the plan. Put it all in motion. Give it the proper impetus. That was where al-Bashir fit in. A man with obligations to Hassani of a different sort. The perfect fit to start the chain unraveling. Send the banks’ stocks plummeting. Bring the short sellers out. Then the rogue traders. That was Hassani’s idea.

And he had found the perfect piece of scum to make it happen.

What a lark that that scum had ended up seducing his ex-wife.

Simons knew, in the end, he was only speeding up the inevitable. Reynolds Reid would be poised to pick up the pieces. Some of his competitors would be blown away; that was bound to happen. Surely he would suffer losses. Personally. As well as the firm. In the short term.

But in the end, he would be one of the winners. The innovative player. The one who alters circumstance to fit design. They would be made stronger by the gale.

After breakfast he had a board meeting. At that meeting they would ratify the acquisition of Pacific-West, California’s largest bank, which had just been taken over by the Fed. They had picked up coveted pieces of Wertheimer. And ArcCo, the country’s largest mortgage company. They would announce it at the annual meeting this afternoon.

What they would never announce was just how it all came to be.

Simons’s car pulled up at the Fed on Liberty Street. His driver, Carl, leaned back around. “Shall I let you off here, Mr. Simons?”

“Great, Carl. Stay close to the phone. I should be back down in ninety minutes. We have to be back up at the office by ten.”

“You got it, sir.”

Simons stepped out onto the street. There was only one thing that gave him pause.

His friend.