admitted quite freely, any of them could have done it. There were no fingerprints on computer programs. Of greater importance for the moment, there was no way of undoing what Electra-Clerk 2.4.0 had done.
What it had done was sufficiently ghastly that the FBI agents on the case were joking grimly that the advent of sealed thermopane windows in Wall Street office buildings was probably saving thousands of lives. The last identifiable trade had been put up at 12:00:00, and beginning at 12:00:01, all the records were gobbledygook. Literally billions—in fact, hundreds of billions of dollars in transactions had disappeared, lost in the computer data records of the Depository Trust Company.
The word had not yet gotten out. The event was still a secret, a tactic first suggested by the senior executives of DTC, and so far approved by both the governors of the Securities and Exchange Commission and the New York Stock Exchange. They'd had to explain the reasons for it to the FBI. In addition to all the money lost in a crash such as had taken place on Friday, there would also have been quite a bit of money made through 'puts,' the name for derivative trades used by many brokers as hedges, and a means that allowed profit on a falling market. In addition, every house kept its own records of trades, and therefore, theoretically, it was possible over time to reconstruct everything that had been erased by the Easter Egg. But if word of the DTC disaster got out, it was possible that unscrupulous or merely desperate traders would fiddle their own records. It was unlikely in the case of the larger houses, but virtually inevitable in the case of smaller ones, and such manipulation would be nearly impossible to prove—a classic case of one person's word against another's, the worst sort of criminal evidence. Even the biggest and most honorable trading houses had their miscreants, either real or potential. There was just too much money involved, further complicated by the ethical duty of traders to safeguard the money of their clients.
For that reason, over two hundred agents had visited the offices and homes of the chief executive officers of every trading establishment within a hundred-mile radius of New York. It was a feat easier than most had feared, since many of the executives were using their weekend as a frantic work period, and in most cases they cooperated, turning over their own computerized records. It was estimated that 80 percent of the trades that had taken place after noon Friday were now in the possession of federal authorities.
That was the easy part. The hard part, the agents had just learned, would be to analyze them, to connect the trade made by every house with the corresponding trade of every other. As irony would have it, a programmer from Searls' company had, without prompting, sketched out the minimum requirements for the task: a high-end workstation for every company-set of records, integrated through yet another powerful mainframe no smaller than a Cray Y-MP (there was one at CIA, and three more at NSA, he told them), along with a very slick custom program. There were thousands of traders and institutions, some of whom had executed millions of transactions. The permutations, he'd said to the two agents who were able to keep up with his fast-forward discourse, were probably on the order of ten to the sixteenth power…maybe eighteenth. The latter number, he'd had to explain, was a million cubed, a million times a million times a million. A very large number. Oh, one other thing: they'd better be damned sure that they had the records of every house and every trade or the whole thing could fall apart. Time required to resolve all the trades? He'd been unwilling to speculate on that, which didn't please the agents who had to return to their office in the Javits Federal Office Building and explain all this to their boss, who refused even to use his office computer to type letters. The term Mission: IMPOSSIBLE came to their minds on the short drive back to their offices.
And yet it had to be done. It wasn't just a matter of stock trades, after all. Each transaction had also held a monetary value, real money that had changed electronic hands, moving from one account to another, and though electronic, the complex flow of money had to be accounted for. Until all of the transactions were resolved, the amount of money in the account of every trading house, every institution, every bank, and ultimately every private citizen in America—even those who did not play the market—could not be known. In addition to paralyzing Wall Street, the entire American banking system was now frozen in place, a conclusion that had been reached about the time that Air Force One had touched down at Andrews Air Force Base.
'Oh, shit,' commented the Deputy Director in Charge of the New York Field Division of the Federal Bureau of Investigation. In this he was more articulate than investigators from other federal agencies who were using his northwest-corner office as a conference room. The others mainly just looked at the cheap carpet on the floor and gulped.
The situation had to get worse, and it did. One of the DTC employees told the tale to a neighbor, an attorney, who told someone else, a reporter, who made a few phone calls and drafted a story for The New York Times. That flagship paper called the Secretary of the Treasury who, just back from Moscow and not yet briefed on the magnitude of the situation, declined to comment but forgot to ask the Times to demur. Before he could correct that mistake, the story was set up to run.
Secretary of the Treasury Bosley Fiedler practically ran through the tunnel connecting the Treasury Building with the White House. Not a man accustomed to strenuous exercise, he was puffing hard when he made it into the Roosevelt Room, just missing the departure of the Japanese Ambassador.
'What is it, Buzz?' President Durling asked.
Fiedler caught his breath and gave a five-minute summary of what he'd just learned via teleconference with New York. 'We can't let the markets open,' he concluded. 'I mean, they can't open. Nobody can trade. Nobody knows how much money they have. Nobody knows who owns what. And the banks…Mr. President, we have a major problem here. Nothing even remotely like this has ever happened before.'
'Buzz, it's just money, right?' Arnie van Damm asked, wondering why it all had to happen in one day after what had been a rather pleasant few months.
'No, it's not just money.' Heads turned because Ryan was the one who answered the question. 'It's confidence. Buzz here wrote a book about that back when I was working for Merrill Lynch.' Perhaps a friendly reference would steady the man down some, he thought.
'Thank you, Jack.' Fiedler sat down and sipped a glass of water. 'Use the 1929 crash as an example. What was really lost? The answer in monetary terms is, nothing. A lot of investors lost their shirts, and margin calls made it all worse, but what people don't often grasp is that the money they lost was money already given to others.'
'I don't understand,' Arnie said.
'Nobody really does. It's one of those things that's too simple. In the market people expect complexity, and they forget the forest is made up of individual trees. Every investor who lost money first gave his money to another trader, in return for which he received a stock certificate. He traded money for something of value, but that something of value fell, and that's what the crash was. But the first guy, the guy who gave the certificate and got the money before the crash—notionally he did the smart thing, he didn't lose anything, did he? Therefore the amount of money out in the economy in 1929 did not change at all.'
'Money doesn't just evaporate, Arnie,' Ryan explained. 'It goes from one place to another place. It doesn't just go away. The Federal Reserve Bank controls that.' It was clear, however, that van Damm didn't understand.
'But then, why the hell did the Great Depression happen?'
'Confidence,' Fiedler replied. 'A huge number of people really got slammed in '29 because of margin calls. They bought stock while putting up an amount less than the value of the transaction. Today we call that sort of thing leveraging. Then they were unable to cover their exposure when they had to sell off. The banks and other institutions took a huge beating because they had to cover the margins. You ended up with a lot of little people who were left with nothing but debts they couldn't begin to pay back, and banks who were cash-short. Under those circumstances people stop doing things. They're afraid to risk what they have left. The people who got out in time and still have money—the ones who have not actually been hurt—they see what the rest of the economy is like and do nothing also, they just sit tight because it simply looks scary out there. That's the problem, Arnie.
'You see, what makes an economy isn't wealth, but the use of wealth, all the transactions that occur every day, from the kid who cuts your grass for a buck to a major corporate acquisition. If that stops, everything stops.' Ryan nodded approval to Fiedler. It was a superb little lecture.
'I'm still not sure I get it,' the chief of staff said. The President was still listening.
