Black Market Read online

  Call him naive and old-fashioned, but that was how he felt.

  “It sounds to me like nobody's protecting the ordinary investor right now.”

  Jay Fairchild nodded. “Nobody is. The big banks are all busy maneuvering for the oil billions. They couldn't give a damn about the poor bastard out there with a hundred shares of Polaroid or A T and T.”

  “Arch, Arab oil money is the name of the game. Arab money is almost always conservatively managed. Since last Friday they've been trying to move out of the U.S. Treasury bills. Into gold. Into other precious metals. The banks are all shamelessly scrambling for the huge Arab fees. They're like rats on a sinking ship, bailing out of the dollar-rushed into sterling, the yen, the Swiss franc, all the more stable currencies…Chase, Manufacturers, Bank of America, they're making small fortunes right now.” Caitlin's lips were tight as she spoke.

  “Do the two of you really know what you're talking about?” Carroll finally asked in desperation.

  Caitlin and Jay Fairchild looked at each other. They answered almost simultaneously:

  “Right now, no.”

  “Nobody knows exactly what this is about. But what we've just told you is generally true.”

  The three of them stood by helplessly watching the potential stock market crash gain a frightening momentum of its own.

  Reports from London, Paris, Bonn, and Geneva came rushing in. The news was as depressing as that of a natural calamity.

  Men in white shirtsleeves and loosened neckties took turns calling out the more substantial telex quotes for the benefit of beleaguered clerks who reported them into a massive central computer.

  Phibro-Salomon-bought at-121/2-down 22

  General Electric-bought at-35-down 31

  IBM-bought at-801/2-down 40

  By eleven-thirty on the morning of December 15, most U.S. banks, including every savings and loan, had been closed. The Chicago, Philadelphia, Boston, Pacific, and mid-west exchanges had all been officially shut down. The emotional panic for investors was in full force; it was virtually unstoppable in every city, every small town, across the United States.

  At noon an elderly man made his way toward the hub of action at the front of the World Trade Center crisis room. Many of the young brokers and bankers didn't recognize Anton Birnbaum. Those who did regarded him with sharp, uneasy glances. It wasn't every day that one encountered a Wall Street legend.

  Birnbaum actually looked more like an ancient New York City pawnbroker than one of the world's acknowledged financial geniuses, a man with an unblemished reputation during all of his years in business.

  President Justin Kearney had arrived by helicopter from Washington less than thirty minutes before. He was conferring with Philip Berger from the CIA. Both recognized Anton Birnbaum as the old man approached. The president greeted the financier warmly, speaking with great deference and sincere respect.

  “It's awfully good to see you again, Anton. Especially right now.” The president spoke formally, as he would to a visiting foreign dignitary. Lately his manner had been more than a little uncertain. For more than a week both the American and the foreign press had been lashing his administration for its failure to deal with the economic crisis. It had had the same effect on Kearney as a shameful public flogging.

  Kearney and Anton Birnbaum eventually disappeared into a small private office, the door of which was guarded by beefy protectors from the Secret Service.

  “It's good to be seen out in the world, Mr. President. I don't get out so much anymore. Mr. President, if I might be allowed to speak first, I have an idea, a plan you might wish to consider…

  “I have just gotten off the phone with two gentlemen you've possibly never heard of. It's worth repeating both conversations. One man is from Milwaukee, a Mr. Clyde Miller. The other man resides in Nashville, Tennessee -Mr. Louis Lavine.”

  Anton Birnbaum said this in a slow, very deliberate style that made each word seem vitally important.

  “Mr. Miller is the chief executive officer of a large Milwaukee brewing company. Mr. Lavine is currently treasurer for the state of Tennessee… I have just convinced Mr. Miller to buy five hundred thousand shares of General Motors stock, which is right now at forty-seven. He will buy the stock, and keep buying it until the price goes back to sixty-seven. He is prepared to invest up to two hundred million dollars.

  “I've asked Mr. Lavine to buy NCR stock, which is now at nineteen, and continue to buy it until the price moves up to thirty. He's prepared to commit up to seventy-five million dollars for the purchase.” Birnbaum then went on to explain to the president why the plan he'd conceived could actually work.

  “I only hope that the courage of these two gentlemen will actually turn the direction of this catastrophe. I pray it will restore some necessary optimism. Mr. President, I have a belief that it will… Once the market sniffs a demand for these two bellwether issues, smart money will undoubtedly start moving. The risks arbitrageurs, who can spot an uptrend in an avalanche and who command billions in ready cash, will begin testing the waters.

  “I have advised a select few of my associates, who have responsibility for mutual and pension funds around the country, that a dramatic break in the crisis situation is now imminent. I have strongly suggested that they look for opportunities to begin bargain hunting before they lose out on a very fast and favorable profit spiral. A spiral back close to where the market began this morning.”

  The news of Anton Birnbaum's recovery plan traveled with appropriate dispatch through the main conference room. Emotional arguments over whether the daring strategy was right, or disastrous, raged immediately.

  “Clyde Miller has just bankrupted his own corporation.” One of the harsher detractors laughed with derision at the news.

  Two other middle-aged bankers argued their way into a fistfight. Creaking haymakers were thrown and somehow managed to connect with some authority. A loop of bankers and stock analysts surrounded the breathless, wheezing pugilists, and at least a couple of side bets were laid. The fight ended with both bankers leaning against each other as if each were trying to shore up the other's dignity. In a small way they symbolized the shambles of the system that had worked in spite of itself for so long.

  As the winter morning passed into steely-gray afternoon, however, it was obvious that the dramatic Birnbaum plan was either too late or too little. There was no significant change in attitude, and therefore the plan was unable to stop the momentum of the declining market.

  The largest single-day losses ever had already been recorded on the world's stock markets:

  On October 29, 1929, losses had been fourteen billion dollars.

  On December 15, the single day's recorded losses around the world exceeded two hundred billion dollars.

  29

  At seven that night, Carroll and Caitlin Dillon watched a chilling news report with more than a hundred of the principals who were actually making the headlines inside the World Trade Center. TV camera teams, top free-lance national magazine and newspaper photographers, and network radio reporters carrying lightweight tape recorders on their shoulders were swarming all over the man on the street in New York City.

  A TV news interviewer stopped a man entering St. Patrick's Cathedral on Fifth Avenue. “How do you personally react to today's financial tragedy?” he asked. “What they're now calling a Black Market?”

  “It makes me very frightened. Very sad. Nothing in this society of ours seems secure anymore. I had a few dollars. Safe. In IBM, in A T and T, the blue-chips only. Now I have virtually nothing. I'm seventy-three years old. What am I going to do?”

  A TV interview crew from “Eyewitness News” was set up to intercept pedestrians near Lincoln Center on Columbus Avenue.

  “Excuse me, sir,” called the reporter to one man. “What's your response to the latest reports, the critical situations on Wall Street?”

  “My response! I'll tell you what. There's nothing you can believe anymore. After Watergate, you couldn't believe in
the president of the United States. After Vietnam, you couldn't believe in our military's moral stance. You can't believe in church leaders anymore. Now? Now you can't even believe in the almighty dollar…”

  TV news teams roamed Forty-second Street near Grand Central Station. One interviewer even thrust his mike at a cop.

  “You're a police officer. You've undoubtedly seen this city in other times of great stress… blackouts, racial riots… How do you compare this situation right now?”

  “This is about the hairiest I've seen it in New York. Not violent. Not yet, anyways. It's just, people are like, they're like walking zombies. Everybody I talk to, totally blitzed. It's like somebody changed all the rules.”

  TV camera crews were a constant fixture all over Wall Street and the World Trade Center area. TV newsman Curt Jackson had actually been living in a construction-company trailer on Wall Street since the Friday-night bombing. He promised his audience he wouldn't leave until the crime, the Green Band mystery, was solved.

  “You're a native New Yorker, sir?” Curt Jackson asked a gentleman in his familiar, authoritative voice.

  “That's right. I'm a New Yorker, thirty-eight years.”

  “What comment do you want to make about the terrible panic, the tragedy in the market today?”

  “A comment for you? Well… you see this gold chain I wear? You see this beautiful gold watch I wear? That's where I keep my emergency money… always ready to travel. Always right here with me at all times… Any more trouble like this, it's adios, New York City. You oughta buy a gold watch for yourself. Just in case we don't do so good tomorrow.”

  Around ten-thirty, Caitlin and Carroll ran into Walter Trentkamp. They had been walking the long, broad hallways inside the World Trade Center, still waiting for definitive news from around the world. They were holding hands when they came upon the avuncular FBI head.

  Walter didn't say anything, but his gray-green eyes fairly sparkled with delight. “You see,” he said to Caitlin and Carroll, “something decent can come out of anything. Damn, this is the first good thing I've seen or heard in a week.”

  With that, and a special wink toward Caitlin, Trentkamp continued on his way down the corridor.

  Suddenly he turned and called out to Carroll. “Hey, I thought I told you to keep me posted on what was going on!”

  Then he disappeared around the corner.

  Late that night, Caitlin swallowed sips of warm diet soda and sat entranced before a forty-inch television screen just off the main crisis room. The monitor's reception was crisp and terrific. The antennae for all the major national networks were on the roof.

  “This is it,” she whispered to Carroll. “The exchange in Hong Kong will be the first important one to open around the world. Sydney and Tokyo are both staying closed until noon, we hear. Yesterday, the Hang Seng Index fell eighty points. This will really tell the story.”

  Caitlin and Carroll were sitting with a tightly clustered nest of Wall Street bankers, frayed men and women who were like spectators burned out by watching some unlikely event. A closed-circuit TV broadcast was being beamed by satellite from Asia to New York. The blackest gallows humor had gained control of the waiting room-as it often does in the worst disasters and emergencies.

  On the flickering color TV screen, they all watched cameramen and news reporters-live-recording history from behind Hong Kong police lines. Farther down the crowded, rowdy street, tens of thousands of Hong Kong residents were chanting loudly, waving hand-printed political placards. Meanwhile, single lines of dark-suited stockbrokers were beginning to march solemnly into the exchange itself.

  “The brokers look like pallbearers,” Carroll whispered to Caitlin. He stroked her arm lightly.

  “It isn't exactly a cheery sight, is it? It certainly does look like a state funeral.”

  “Yeah. And whose funeral?” Carroll asked.

  A foreign correspondent for one of the major American networks eventually stepped up to a TV camera planted on the mobbed cacophonous Hong Kong street. The newsman wore a rumpled seersucker suit and spoke with an affected, clipped British accent.

  “Never before have we seen such a graphic demonstration of the polarization between Third World and Western hopes and dreams. Here in Hong Kong, I believe we are seeing a minidrama of the imminent future of the world. It is now the day after stock prices have tumbled precipitously everywhere… The bond market is in shambles; the French and Arabs are liquidating their holdings at the rate of billions a day… And in Hong Kong this morning, many people are deeply concerned, even sad-faced… But the majority, surprisingly large numbers, mostly university and street-gang youths, but also the unemployed-are shouting anti-U.S. slogans, even praying for a shattering stock market crash. These people are clearly rooting for a full-scale world economic crash. They're expecting the worst, and they're gleeful about the expected disastrous outcome… The long-awaited fall of the West.”

  Suddenly, everything changed!

  Unbelievably.

  Beautifully, and all around the world.

  Almost as if it had been prearranged, too.

  Not forty minutes after the Hong Kong Exchange opened, stock prices on the Hang Seng began to stabilize; then stock prices actually started to rise-to surge powerfully upward on the index.

  To the keen disappointment of many of the jeering university students and workers mobbing the streets outside, a dizzying spiral of nearly 75 points followed in the next hour alone.

  The exchange in Sydney opened in very much the same manner. Grim and exhausted brokers at first, highly organized labor and student rallies against capitalism, against the United States in particular-then a burst of excited buying. A dramatic spiral up.

  The same scenario followed at the late-opening exchange in Tokyo.

  In Malaysia an hour later.

  Everywhere.

  Carefully orchestrated recovery.

  The manipulator's manipulation-but to what end?

  At 8:30 A.M. New York time, looking as if he'd recently been liberated from the dustiest carrel in the New York Public Library, Anton Birnbaum peered inside the World Trade Center emergency meeting area. This time, however, a boisterous entourage surged forward and escorted the financier to the front of the pandemoniacal room.

  President Justin Kearney appeared relaxed, almost jovial, as he met the aging financial mastermind. Vice President Thomas Elliot was standing beside him, still looking controlled and restrained. The vice president was the coolest of the Washington leaders. Birnbaum himself seemed astonished by the general hubbub, the strange celebration, so early in the morning. He was equally astonished by the way the market, like some whimsical thing subject not to the rules of money, but to the patterns of the wind, had come back so strongly.

  “Mr. Birnbaum. Good Morning.”

  “Yes. Good morning, Mr. President, Mr. Vice President. And I hear it is a pretty good morning.”

  “By God, you did it.”

  “By God. Or in spite of Him, Mr. President.”

  “This is amazing. It's quite moving. See?… Real tears.” Caitlin was hanging lightly on to Carroll's arm. She dabbed her eyes and was not alone in the gesture.

  They were at the heart of the frenzied celebration. Off to one side of the room, President Kearney was emotionally clutching his chief of staff. The secretaries of Treasury, State, and Defense were positively boyish with their loud whoops, their hand clapping. The gray-suited chairman of the Federal Reserve had danced briefly with the cantankerous chairman of the Joint Chiefs of Staff.

  “I don't believe I've ever seen bankers so joyous before,” Caitlin said.

  “They still dance like bankers, though.” Carroll smiled at the odd but genuine scene of relief. “No threats to Michael Jackson here.”

  He couldn't help feeling elation in the midst of this crazy, almost riotous room. It wasn't as if they'd actually found Green Band, but it was something, a sliver of merriment at the heart of all the recent grimness and frustration.
/>   Caitlin nuzzled the side of his face with her mouth. “I'm already getting worried again. I only hope…”

  “What do you hope?” Carroll held Caitlin's arm. He felt unbelievably close to her. They had already shared more charged moments than some people did in a lifetime.

  “I hope that it continues like this, and doesn't come crashing down.”

  Carroll was silent, studying the oddly uplifting scene before him. Somebody had found a phonograph, and the sound of Scottish bagpipers could be heard over the general din. Somebody extremely resourceful was dragging in a couple of cases of champagne. There was something just a little forced in the sudden celebration-but what the hell? These were people who'd been about to fall off the edge of their world, and slippery though it might be, they'd found some kind of temporary footing.

  Still…

  Still…

  Even as Carroll sipped his champagne, something kept him from getting too hopeful. This is all premature, and therefore dangerous, he was thinking as the party heightened in intensity. The policeman inside him never stopped working, never stopped probing, never stopped figuring out all the possible angles. Damn it, police work was in his blood.

  Where is Green Band? Is Green Band watching right now?

  What are they thinking? What kind of party are they having today?

  Who's telling them everything we do before we even do it?

  30

  There was no more time to waste. Clearly, there was no time at all. Every passing hour was vitally important. Anton Birnbaum's hyperactive mind was clicking automatically like a computer.

  Birnbaum had begun to make urgent phone calls from his eleven-room apartment on Riverside Drive, near Columbia University. He had definite hunches now-strong suspicions after talking to Caitlin Dillon and her policeman friend Carroll.

  At junctures in his life, Birnbaum had been thought of as the consummate international businessman, at times as the world's preeminent economist. Certainly he was an intense student of life, intrigued by the vicissitudes of human behavior. His curiosity was boundless, even at his age.