Rule 34

“You’ll tell her what you always tell her, lad.” The Gnome’s familiar tones, the rolling R’s and cut-glass sibilants of his currently adopted accent (upper-crust Morningside, posher than the King of England’s) pronounce his diagnosis with utter certainty. You hate him for it, briefly: for his self-assured confidence, his smugly dispassionate claim on your future. He’s like a spider, observing the world through the tiny tugs on the periphery of his web. “She expects the worst of you already; inviting some dodgy toy salesman to stay is nothing.”

Actually it’s everything, but you can’t tell the Gnome this; there is no rupture in his world, no gap between the sacred and the profane. He lives his life entirely in the foreground, sly as a fox and just as shameful, and he wouldn’t understand what’s wrong even if you had the words and the will to tell him. Which you don’t. So you burrow your arse deeper into the decaying armchair and squint at the pint of beer before you on the table. “He’s a nut-case, though. Why me?”

“Because you’re in the right place at the right time. Drink your beer, there’s a good chap.”

“It’s not the right place. It’s a fucking dangerous place.” You obey his injunction and swallow another mouthful of sour fizz. “What’s the angle? Come on. Tell me.”

“The angle is, we make lots of money—”

You cross your arms. “Not fucking good enough, Adam.” Not lad, you notice absently. You don’t get to call him by any other kind of diminutive or belittling nickname. Professor, maybe. Come to think of it, that sort of sums up your relationship, doesn’t it? “What’s my angle? Why am I hanging my ass out here while foreigners use me as a distribution hub for bread mix and psychos invite themselves to stay with my wife and kids? What do I get from this?”

You stop and stare at the Gnome, giving him your best crack at Cousin Tariq’s hard-sell hairy eye-ball.

“Diplomatic immunity—”

“That’s nonsense, and you know it. Honorary consuls don’t get immunity from parking tickets, let alone anything else. Especially not consuls working for a sock-puppet state that wouldn’t even exist if its parent government wasn’t so anxious to get rid of it that they rigged the independence referendum.”

“Ah, that.”

“Yes, that—I can read wikipedia, too! Seventy-two per cent voted against independence according to the UN exit polls, did you know that? Unemployment is running at 40 per cent. And Issyk-Kulistan, with about 20 per cent of Kyrgyzstan’s population, inherited 80 per cent of its national debt. What the fuck is that about?”

The Gnome sits there listening to you rant, staring into the turbid depths of his half-drunk pint of 80/- and all the while swirling it gently, so that the suds form a slimy slick up the sides of the conic. He glances up at you with eyes as old as the hills. “So?”

“I’ve been doing some thinking,” you tell him, and wait.

“A dangerous habit to get into, Master Hussein.” His tone is light. “What precisely have you been thinking?”

“I’ve been thinking that . . . this is a set-up, right? Some kind of scam to do with their national debt? And while they’ve got their hands off IRIK for a few years, organized crime moves in.”

“Not exactly, but close.” The Gnome takes a long suck on his bevvy. “What it’s about is, a country like Kyrgyzstan can’t afford to fuck with its credit rating, can it? They ran up some big debts over the last twenty years, building gigantic presidential palaces and new airports and so on. The usual prestige shit, presided over by a series of authoritarian ass-hats, would-be dictators-for-life who only averaged eight years in the saddle between revolutions. The gas-fields are played-out, now, so they’re trying to restructure their debts, and finding it hard.

“But they’re not fools.

“Corporations can’t downsize and outsource the work overseas anymore—not like they could in the noughties—not without a hostile social-responsibility audit and crippling fines. But governments can. And they can get rid of the national debt by parcelling it up as, what’s the term, debt securities. They hand the debt securities over to some fictional entity like, oh, a breakaway republic, in return for buying its independence. Don’t look at me like that, there’s a long history of countries buying themselves out; Haiti did it with the French empire. Issyk-Kulistan is buying its independence by taking on most of the national debt of Kyrgyzstan. The current Kyrgyz president is a very interesting fellow, lad. A compromise candidate, one who didn’t offend any of the major power brokers—more importantly, before he was shoved into the hot seat, he was a professor of economics.”

He holds up a hand. “Yes, I know what you’re going to say: They don’t want to be independent. Tough. Anyway, I suspect the angle they’re playing in Bishkek is that IRIK has been set up to fail, declare bankruptcy, and Bishkek is expected to ‘send in the army to re-establish order’ or some such bullshit. Meanwhile, they’ve sold—through cut-outs—a ton of credit default swaps hedged against ARIK’s national debt. In the short term, it looks like they’re selling insurance. What everyone is supposed to think is that they’re stupid- greedy, and when the IRIK collapses, the debt bomb will empty the Kyrgyz coffers.”

“But that’s stupid—” You swallow. “They can’t do that! Can they? Isn’t that what made the banks collapse?”

“Well spotted.” The Gnome grins humourlessly. “It’s not the only thing they might be doing, though. IRIK’s credit rating has got to be in the shitter, so betting they’ll collapse is a sucker bet. What I think Kyrgyzstan is doing is, they’re selling CDSs to foreigners who expect IRIK to collapse under the debt. And they’re over-selling, selling multiple CDSs leveraged against the same asset. Meanwhile they’re using the income from the CDSs to reduce the debt load—until they arrange for reunification, which, with 72 per cent in favour, isn’t going to be hard. The idiots who bet on IRIK collapsing will miss out on the fat payout they were expecting: Serves them right. What interests me is why the IMF and the credit-ratings agencies aren’t yelling about it. The Kyrgyz government must have figured out a way to buy off the regulators and oversight agencies. So what’s the angle? There’s one obvious one: inward investment.”

“Inward—who’d want to invest in Issyk-Kulist . . .” You trail off. The answer stood staring you in the eye a few short hours ago. “Oh.”

“Yes, indeed. Picking the pockets of honest bankers is frowned upon in polite company, but the same people would tend to turn a blind eye to a lawful government’s attempt to sting crime syndicates in the wallet by selling them junk credit default swaps leveraged on a sock-puppet’s debt. Think of it as an anti-money-laundering operation on an epic scale—the cops have laid a trap for the gangs using an entire country as bait. The real problem is avoiding being assassinated afterwards: The RBN and the cartels take a dim view of overly successful confiscatory policies, and they’re bigger than some governments.”

The Gnome drains his glass then waggles it at you. “Will you stay for a refill? I think it’s about time we had a heart-to-heart talk about how to buy and sell derivatives . . .”

When you finally go back to the house, you fail to work up the nerve to tell Bibi about your house guest. She’s home late from work, tired and silent from too many hours in the pharmacy, and lavishes all her warmth on Naseem and Farida, who’ve been staying round at Mrs. Uni’s house after school. The cone of silence she traps you in is poisonous and chilly; you know from bitter past experience that she will make you wait on the threshold for three days and nights before she relents.

Three days is her usual sentence for drunkenness and foolery: not one minute more and not a second less. She has the measure of a judge and the restraint of a probation officer. You’ve been on the receiving end of this sanction before. Bibi can be a harsh woman, when she wishes to teach you a lesson. And so you take the spare key wordlessly when you leave for work the following morning. Let John Christie—no, Peter Manuel—explain himself to her when he arrives, if he arrives. After all, it might never happen.

You sit behind your desk in a haze of mild dread for a couple of hours, a cup of tea cooling by your hand as you try to distract yourself by chasing naughty pictures on the Internet. But your heart isn’t in it, and in the end you give up and stand, meaning to go in search of water to pour on the endlessly dying rubber plant, when your mobile rings.

Your heart sinks as you recognize Bibi’s face: It’s most unlike her to phone you from work. “Hello? What is it?”