The Samurai Strategy

by Thomas Hoover

CHAPTER TWELVE

Over the last three weeks I'd spent long hours on the phone handling Matsuo Noda's new hedging in the currency markets. The play started out modestly, but as his Eight Hundred Year funds became bloated with cash, it grew into an avalanche of speculative positions.

His guiding principle was to keep a low profile in order not to spook the markets, same as any good trader would do. Whenever the FOREX desk of one market-maker bank on his list would start getting nervous, I'd just hit the next place in line. Finally after everybody on this side of the ocean began backing away, he went international. Zurich, in particular, loved the action and took everything he threw in its direction. I guess the Swiss are used to high rollers, since their financial casino never got cold feet and invented a house limit.

Somewhere along the way I also came to realize I couldn't possibly be the only agent in his employ; there was far too much money to move. Also my list of contracts eventually got pared to manageable levels, so somebody else had to be picking up the slack. It appeared that just as I was spreading the action he'd assigned to me all over the globe, he was spreading his own assignments worldwide. The man had to be covering a major chunk of the world market in interest-rate futures and currency forwards, but not a penny of it was traceable to Japan. Or to Matsuo Noda.

How, I kept marveling, could this be happening right under the nose of all our supposed geniuses of world finance? One thing, Noda had all his moves down pat. My hunch was he'd started routing a lot of short selling through Sydney and Hong Kong, and also was hitting the off-exchange "third market," anyplace he could find somebody to take his bets. If you remember how the dollar plunged in the mid-eighties, you'll also recall that anybody who'd had the foresight to dump it in advance would have been sitting pretty. Plenty of traders did, but none of them received any particular attention, since the pond is so huge. In cumulative totals the currency exchanges worldwide easily handle as much as two hundred billion dollars a day. Although DNI's massive short position clearly signaled that somebody major was anticipating a crash of the dollar, Noda realized that all he had to do was keep moving and nobody would put it together.

Need I add that my own little dollar hedge for Amy was peanuts compared to what was going on now. Dai Nippon through its anonymous agents was dumping American currency in the multi-billions worldwide, but since Noda kept the action spread out, nobody bothered to notice the pattern. Ditto his awesome "naked" shorting of Treasury futures. I mean, anybody who'd troubled to assemble the numbers could have predicted somebody up on the bridge must have sighted a reef dead ahead. I kept trying to warn traders I knew, both on and off the exchanges, but nobody wanted to hear downbeat speculation from some Cassandra. They were all too busy pocketing commissions and ordering more champagne.

And then it happened. In broad daylight. I'll explain the operative details shortly, but if you were there, that could be a little like reviewing the theory underlying nuclear fission for somebody standing at ground zero when the bomb hit. So first let me recollect how it felt down in the trenches.

I was breakfasting at the dining room table downstairs that particular Monday morning—November 7, as we all remember so vividly—when Matsuo Noda dropped the first shoe, or maybe it's more accurate to say he began loosening the laces. I'd just finished squeezing some orange juice when I punched in the number of a financial update service on my trusty cordless phone, mainly to hear the (recorded) sound of a human voice. I'd totally forgotten the U.S. Treasury was holding its quarterly refunding that day.

Newsbreak. Dealer banks were reporting that demand for the long bond, the thirty-year, was extremely soft to nonexistent. Equally unnerving, there wasn't any noticeable interest in Treasury's ten-year notes either. The reason seemed to be that the usual heavy participation by major Japanese investment houses (typically twenty to forty percent of the total) had inexplicably evaporated. In fact, a rumor currently flying across

the floor of the Chicago Board of Trade said a number of Japanese securities houses and banks in New York had begun what appeared to be a program to divest their current Treasury holdings massively. Since spokespersons at Japanese outfits like Nomura and Daiwa Securities had clammed up, refusing to deny that rumor, the usual institutional buyers like Oppenheimer and Goldman, Sachs were holding back, nervous.

Hang on, I said to myself. Can this mean we're about to test out Henderson's "worst case" scenario, that Japanese pullout all the analysts say could never happen? But there's no reason. No sudden icebergs out ahead. . . .

Noda. I said the word out loud. Noda's kicked off his play.

I almost laughed at the thought of his naivete. Was this going to be his game? Who was he planning to fool? For once you've got a little surprise in store, chum. Treasury may have to sweeten the pot, but there's a lot of money in the world. The United States of America can't be blackmailed.

Then I glanced out at the blue morning sky, empty except for a single swooping sparrow, and had a strange premonition, one of those mystical moments when everything sparkles with crystalline clarity. I had this feeling I can't explain. Still in a reverie I carefully set down my orange-juice glass, walked upstairs to the "office," and dialed one of the computers into Reuters's Wall Street service. How were the securities markets taking the news? It was already ten-thirty, time enough for some initial response.

Dear God. For a second or so I just stared at the numbers in disbelief. What was happening? Noda hadn't gone near the stock market.

I quickly switched on the TV and located CNN, which was already carrying a special report live from the floor of the New York Stock Exchange. There stood a badly shaken Lou Dobbs, minus his tie. Minus, in fact, his jacket. The scene around him was pandemonium.

". . . and the Dow Jones Average . . ."—he glanced down at a monitor—". . . has dropped six hundred and eighty points in the last twenty minutes. . . ." At that moment somebody jostled against the cameraman, giving us a momentary view of the ocean of paper buy-and-sell slips littering the floor. "A hundred and ninety million shares have already changed hands in the first half hour of trading this morning. ..."

My God, I thought, the market is in free-fall. Was Meltdown Monday in '87 just the warm-up?

"As yet unconfirmed rumors concerning a slow foreign response to today's Treasury auction . . ."—although he was weighing his words carefully to give the appearance of calm, the hasty makeup on his forehead was already beginning to bubble with perspiration— ". . . seem to be responsible for what most analysts are describing as an entirely inappropriate overreaction in securities prices here this morning. ..."

What else could he say? It was as though everybody's gnawing, primal fear had just been confirmed. There really was a hairy beast lurking in the bedroom closet, waiting to jump out and eat us in our sleep. The market was running to mommy: safe and soothing cash.

Next he made the tactical error of buttonholing a couple of floor traders and specialists for comments. They didn't bother to mince words. Their one, terrified question: Had Japan finally decided to let the U.S. and its towering debt just twist slowly in the wind? If that happened, U.S. capital would simply dry up, sucked in by Treasury's massive money-sponge: interest rates would soar, murdering the U.S. economy. The Great Depression of the nineties.

As I watched, a bulletin started running across the bottom of the screen: bids on the new issue of thirty-year bonds had now dropped an amount equivalent to raising their return almost two full interest points. I zeroed in as the text continued. Worse news. The "coverage ratio," which measures how many more bidders there are than necessary, had plummeted from 2.7 to 1.3. And still dropping. More and more potential buyers were running for cover.

Lou, who was now surrounded by traders in blue jackets and couldn't see his own monitor, was assuring his viewers that experienced market analysts were all saying the slowdown in Treasury action did not accurately reflect worldwide demand, that deutsche marks and pounds sterling undoubtedly were already winging westward to take advantage of the new higher rates.

Sweating there in his melting pancake, the poor guy had no inkling the patient was slipping into a coma just as he'd forecast full recovery.

Well, I thought, there's always prayer. Anything's possible. But . . . as Henderson used to say, if frogs had wings, they wouldn't bump their ass.

I got up to go downstairs and pour another cup of coffee. Coming back, I decided to forget about the stock market for a moment and just focus on Treasury, so I clicked on my Telerate service and scrolled through the financial quotes.

Friends, by that time there was no, repeat no, market out there for Treasury paper. Now that the Japanese dealers appeared to be dumping everything, European banks had hit the sidelines, waiting to see what transpired. Would rates continue to move up? Would Treasury be forced to withdraw the issue? Should everybody be bailing out now before bond prices went through the deck and demolished years of interest earnings? Looming over it all was that standing terror of the bond markets: no liquidity.

Back to Cable News Network. An officer from one of the dealer banks (which bid on big chunks of Treasury paper, then retail it) had rushed over to CNN's midtown studios and was explaining to us all it was clearly nothing more than some minor trans-Pacific communications snarl. The problem, obviously, was simple: Japanese securities firms here just hadn't received authorization from their head offices in Tokyo, where it was after business hours. A clarification would be forthcoming any minute now.

Well, if you've ever been turned down for a mortgage and you fantasized a day when you'd see that high-and-mighty clerk behind the desk have to ask you for a loan, I hope you caught that one. This paper-shuffler whose secretary had a secretary had agreed a week earlier to take on three billion dollars of Treasury's new debt issues—paper he now couldn't give away, let alone resell—and he was practically on his knees begging America to save his bank.

What the hell was going on? My mild-mannered friend Matsuo Noda had inadvertently (I assumed) kicked off a major financial panic.

I clicked the dial over to Financial News Network, FNN, which had momentarily interrupted its heavy midday fare of California snake-oil-and-options hucksters. Now a decidedly pale investment banker, this one an unindicted employee of Drexel Burnham, was declaring it was all merely a little "tempest in a teapot." His precise words. The Japanese securities houses wouldn't dare pull out their funds and kill the market, he explained. It was absurd. If they did that, their investors would lose a fortune, since any big sell-off would automatically drive down the value of their own massive portfolio. Ergo, Japan's funds had no choice but to stay invested. No problem.

My friend, I thought, where have America's bankers been? Out repossessing some widow's Chevy? As a matter of fact the Japanese outfits here don't give a flying fig what happens to our debt market. If you'd been doing your job, you'd know that Matsuo Noda had already sold Treasury futures far in excess of Japan's portfolio back when values were still high. Now he can go out and pick up all the notes and bonds he wants, cost approximately nothing, and turn around and deliver them at yesterday's full price. The man must feel like a riverboat cardsharp who's lucked into a saloon full of Huck Finns on payday. Don't you realize he's just cleaned you out, right down to the fillings in your teeth? And now he's got his team on the bus ready to roll.

Over to CBS, a Special Report underway. It featured a stream of well-meaning and incoherent Treasury officials, none of whom had the slightest inkling what to say. Then Jack O'Donnell came on from the Senate pressroom, breathing fire. The administration's "light at the end of the deficit tunnel" had turned out to be a freight train heading our way, just as he'd predicted. America's debt chickens were coming home to roost. He was demanding that the Speaker call a joint session of Congress this very day and by God do something.

Right, Jack. What? Looks like our pal Matsuo Noda is about to have the U.S. of A. exactly where he wants us. By the balls.

I guess I must have been operating solely on instinct by then, because a phone number popped into my head that I hadn't recalled in years. Sam Kline, my old broker at Merrill Lynch. I hadn't talked to Sam in ages, but his number used to come to my fingers whenever the market started acting up. Maybe he was sort of a father figure. Truth is, I'd first learned what little I know about the market watching that giant ticker ML had up at one end of the office just above Sam's desk—and long gone in this age of computers. I remembered how heavy trades—over ten thousand shares—were marked with stars, always fun to watch.

Forget the "financial experts." They were reduced to spouting pure gibberish. Time to check in at the real front line. Sam Kline.

Maybe I just wanted to have Sam to soothe me like in the old days, pour some of that dreadful coffee he had in his Thermos, tug down the cuffs of his trousers, and say not to worry, there's always tomorrow, the disaster in my portfolio merely reflected a long-overdue and healthy "correction" in the market. (Only years later did I finally realize that "correction" was a special Wall Street expression meaning all the stocks you own just tanked.)

When Sam finally got around to my call, he was barely coherent but still trying.

"Matt, what's new?" There was turmoil and yelling behind him, as though the office was about to go under a wrecking ball.

"You tell me."

"Well, at the moment it's something of a downside morning, but—"

"Sam," I snapped, "this is me, Matt, save the Pollyanna."

A short pause, and then he crumbled. "Matthew, want the truth? The Monday Massacre of '87 was a rally compared to this. That crash was just stocks. This time it's U.S. bonds, the dollar, everything. The market's falling apart. Right this minute the trust departments at First Boston and Morgan are dumping entire sectors like they were some nervous greenhorn in Oshkosh. Pension fund managers I've known for years are liquidating whole blocks 'at the market,' for whatever they can get. One specialist downtown just told me he had to eat a hundred thousand shares of, Christ, General Dynamics. You can't give away Northrop. And Lockheed, forget it. . . ." Another pause. "God Almighty, Matt, we need a market up here. How about—"

"Not now, Sam." It was like hanging up on my own father. A knife in my heart. "Look, I'll get back to you. Best to Naomi."

Good God. I wanted to hire an airplane and skywrite a big sign over downtown: WAIT. Trouble was, I wasn't sure myself what it was all about.

However, there was one thing I could do. I punched in the contact number for Dai Nippon, uptown, and told the polite little lady who answered the phone to get Tanaka on the line this goddam minute. About ten seconds later he was there.

"Are you guys nuts?" I yelled. "Doesn't anybody up there know what's happening?"

"We are well aware of the situation, Mr. Walton."

"Well, then, do something, for chrissake!"

"Our securities dealers here are in contact with the appropriate officials. Nothing is to be done without explicit instructions from Noda-san. He has not yet been in communication."

"Well, get him in communication."

"There is no cause for alarm, Mr. Walton." He continued calmly. "Noda-san has made sure that our dealers' exposure in Treasuries is covered by the futures contracts DNI has acquired. Japanese investors are sheltered from price fluctuations. Noda-san is most grateful for your—"

"Listen carefully," I said. "Fuck Noda."

I hung up.

The rest of the morning I just sat there and watched the market crater. After bond futures prices on the Chicago exchanges had sunk the daily limit, as far as they could drop in a single session, the action merely moved elsewhere. A cash market developed off-exchange worldwide and was going crazy, with spot quotes nose-diving. Prices now were only rumors, but the satellite services were still trying to track them. At exactly 12:37 P.M. the President finally got around to issuing an Executive Order suspending all trading at the exchanges in government bills, notes, and bonds, including futures contracts, until further notice. It turned out to have been about as effective as Prohibition. Besides, by that time I figured Noda had already cleared at least fifty billion.

Enough. I couldn't watch anymore. All of a sudden I felt like a guy who'd bailed out of his flaming F-16 only to see it total a schoolhouse. I kicked off the computer, slipped on a suede jacket, and headed for Bleecker Street to fortify myself with mussels marinara and a stiff Bloody Mary. The early Post at the corner newsstand proclaimed with characteristic understatement the imminent passing of the civilized world.

Over cappuccino I finally started to think rationally. Nothing anybody was saying added up to a full picture. There had to be more, or less, to the story. . . .

Then the truth glimmered before my eyes, yet another transcendental moment. What Noda was planning was obvious. At last I realized why he'd hired me. Like a great chess player, he could see about ten moves ahead. The question now was no longer what his next move would be. It was when.

You want to win World War III with a quick blitzkrieg, knock America to its knees? Simple. Go for the blind side. First you short a piece of the debt market, then for fun you dump the currency in advance (since it's just naturally gonna go the way of the peso when you make your opening move, and you might as well squeeze the orange if it's just lying there anyway). Next you kick things off by giving everybody the impression you're divesting all Treasury paper, which causes the dollar to predictably plummet….

Christ! What about Amy's currency hedge! Three weeks ago I'd contracted to sell the banks of New York ten million dollars she didn't own. In all the pandemonium, I'd completely forgotten.

I threw down a twenty for the lunch and literally raced around the corner to look for a pay phone on MacDougal. When I finally found one that worked, I shoved in a quarter and dialed the FOREX desk at Citibank for a dollar quote.

Henderson was right. Paper money is predicated on trust. It seems that when the second largest industrial nation in the world apparently doesn't think enough of the credit rating of the first largest industrial nation in the world to loan it two cents, then talk about the full faith and credit of said first largest, etc., doesn't cut much ice. The Fed was out there buying dollars and dumping marks and yen and pounds in the billions to try and keep the dollar afloat, but nobody else in the Group of Five—those countries supposed to step in and buy each other's faltering currencies to prop them up—was lifting a finger. In spite of our treasury secretary yelling fire and damnation, all they'd done was announce an evening meeting in Paris. Period. What, they inquired, had the U.S. done lately to help out France, West Germany, Britain, or Japan?

Behind our allies' diplomatic and not-so-diplomatic posturing lay a simple, rhetorical question: Who needed passage on a sinking ship? At the moment the only thing governments around the world wanted less than U.S. Treasury debt was U.S. greenbacks. I'd contracted to swap ten million of them for other currencies back when they were worth a dollar. That afternoon I settled with bills worth eighty cents and sinking. That's right. Amy's college-fund hedge cleared two mil.

And if you think Miss Amy Walton survived the dollar's crash intact, what about Matsuo Noda, now holding tens and tens of billions in world currency forwards?

What didn't prosper that Monday was a state of mind called Wall Street. By mid-afternoon all the market indexes were down by half; exchange trading had been halted in a good two- thirds of the Dow stocks; a major brokerage house had frozen accounts and announced Chapter 11; and gold futures were soaring. The October crash of '87 was now a nostalgia item, remembered as a few sessions of light trading with a hint of downside bias.

A lot of investors went to cash, but most switched into money funds (what else could they do?). While sophisticated players were shorting the stock indexes and futures, the newsletter gurus—who charged two hundred dollars a year for hot tips about equal in worth to those of a New York cabbie—were calling their major clients. A big sell signal was emblazoned in the streets of lower Manhattan. Everybody assumed the situation was temporary, but nobody needed to ride the ship down. By the closing bell the Dow had sunk over eleven hundred and fifty points. And don't forget, the DJ Average represents blue chips; prices for over-the-counter outfits like Widget-tronics Inc. just packed up and headed south for the winter.

The way I figured it, Noda was probably more or less on schedule. By nightfall the stock exchanges had blood on the floor, a dollar was worth roughly two-thirds what it had been at sunup, and the U.S. Treasury couldn't have panhandled a nickel anywhere in the Free World.

I've mentioned Jack O'Donnell a time or so previously, the Columbia University professor turned politico. Jack was the junior senator from New York: Irish idealism goes to Washington. I'd gotten to know him reasonably well, thanks mainly to a series of rubber-chicken dinners I'd pitched in to help him with.

Needless to say, O'Donnell's well-known attitude toward fiscal sleight-of-hand in the corporate sector had made raising money on Wall Street a decidedly uphill endeavor. His Insider of the Month award was especially unpopular. That was a large gold-plated screw, suitable for mounting, which he regularly bestowed on any corporate board members who'd just happened to dump big blocks of their personal holdings about a week before a disappointing quarterly report sent their company's stock price through the floor. For some reason Jack never seemed to buy their collective "Gee, we had no idea" explanation.

Jack always assumed that corporate managements would walk off with anything not securely riveted to the floor. He also believed most of the corporate takeovers these days were about as helpful to America's competitiveness as masturbation was to population growth, a viewpoint I tended to share—which is one reason why I helped him raise money from time to time. More than that, though, I admired him immensely. The man was a real samurai. Unfortunately, however, he was his own worst enemy half the time when it came to soliciting campaign checks; he could never understand why executive dining rooms weren't necessarily the optimum terrain to start raising hell about shareholders' rights. I once sent him a dog muzzle for Christmas after he pulled just that trick at a CEO fundraiser I'd carefully set up in one of those private suites atop the World Trade Center.

He'd been especially busy this session. When he did come to New York, he spent most of his time up at the West Side apartment of a female aide of his, where they reportedly were polishing a lot of position papers these days. Monday, however, he had only one thing on his mind: how to keep the U.S. monetary system from going belly up. Trouble was, he had no idea what to do. Naturally he immediately canceled his subcommittee hearings for the day—an inquiry into how charge cards and the banks touting them (loving those wonderful loan-shark rates) were lofting consumer debt to dizzying heights. That afternoon he began working on a speech for the Senate floor, a hellfire preachment intended to shame the administration into some kind of action.

After thinking about it awhile, he'd decided that, since all the nervousness in the market was traceable to an apparently total Japanese loss of confidence in U.S. government obligations, he'd have his staff call around concerning what other Japanese moves were underway. He had questions such as: If they're pulling out of Treasuries, are they dumping corporate bonds too? Real estate? Where in blazes is it going to stop?

Simple questions, maybe, but tough ones to attack on short notice, given the clampdown at the source. So his people started making calls, and finally one of them got hold of Charlie Mercer, an Executive VP at Shearson. Purely chance. Did Charlie happen to know any big Japanese players in town?

Well, yes and no, replied Charlie. Strictly off the record, one of his biggest personal clients lately was an attorney here in New York, who always paid with corporate checks bearing the logo of a Japanese-sounding outfit. But it was a purely private arrangement and he was sure . . .

The staffer immediately told him to please hold while she switched the call to Senator O'Donnell.

Actually I'd known Charlie for years, and I also knew the poor guy's wife had some kind of esoteric bone cancer that meant ten thou a month in radiation therapy. So I'd let him set up an account on the side and do some full commission churning in the name of one of Dai Nippon's dummy fronts. Why not?

Then Jack came on the line. "Mr. Mercer, am I to understand you've been handling heavy trades for a Japanese firm?"

"Nothing illegal about that, is there, Senator?" Charlie was growing nervous, suddenly seeing himself under the hot glare of TV lights in Jack's finance committee. "Truthfully, the man I actually deal with is an American attorney here named Walton."

"Matt Walton?" roared Jack.

"You know Matthew, Senator?" inquired Charlie, stunned by the sound of the august public figure abruptly bellowing in his ear.

"Know him? I may kill the prick for not talking to me sooner."

Approximately five seconds after this conversation my phone erupted.

"Tell me, Judas," he yelled, "is it true you're helping them out? I want the goddamn truth and I want it now."

"Jack?" I finally recognized the voice. "Helping who?"

"You know who, you fucker. Our good friends the goddam Japs, that's who. They're—"

"Jack, calm down a second," I interrupted. "It's just possible this whole thing is some kind of scam. Not at all what it seems."

"Talk to me."

"Not over the phone. Client confidentiality. But if you're coming up anytime soon, I'm mad enough to give you a full rundown of all I know, strictly off the record."

"I'm scheduled in on the six o'clock shuttle. Where can we meet?"

"How about the club? I promise you an earful."

"The Centurion?" He inquired sourly. I knew how he hated it.

"Jack, wouldn't kill you to rub elbows now and then with an actual capitalist. Don't worry. There won't be any photos to sully your reputation."

I suggested the place partly to pay my respects to a wounded ward after the day's carnage and partly for Jack's convenience. It was a combined press hangout and "new money" convocation, located just around the corner from his New York office in one of those old mansions right off Fifth, midtown. They'd just begun allowing the fair sex to cross their hallowed doorstep (after a lawsuit), a move certain diehards felt signaled the curtain raiser on the West's Decline. For my own part I'd actually put up Donna for membership as pan of the test case. We eventually established that the Centurion's unwritten membership criteria were actually pretty simple: in addition to being white and male, you also needed to be either rich or well-known. Being all four made you a shoo-in.

A couple of us fortunate enough to have friends on the circuit bench called in a few favors and arranged for a black, female judge to hear the case. The proceeding was over in time for lunch.

"Is eight okay?"

"Done," he said. "I'll be there on the dot."

He was late as usual, but I managed to pass the time. It was enough just to sip a Perrier and observe the shell-shocked faces of golden boy brokers presently mainlining martinis down the bar. Fortunately the place was on the ground floor so nobody could take a dive out a high window, but the crowd had all the insouciance of hookers working a Salvation Army convention. I checked over the room—lots of designer suits topped off by long faces—and wondered how many millions had been dropped that day by those present. Booze was flowing across the mahogany bar as if there were no tomorrow. Maybe there wasn't.

At a quarter to nine Jack O'Donnell marched up the blue marble steps, a man in from the war front.

O'Donnell was a big guy who looked every inch a senator, right down to the thirty-dollar haircut and the eight-hundred-dollar suit. I think it was his overcompensation for being Irish and being crapped on by the Columbia University administration most of his days. A so-so academic, he'd blossomed as a politician—firm handshake and steel eye—and had easily devastated the smooth-talking Long Island party hack the big money had thrown against him. The man was a straight shooter who believed the purpose of capitalism was to make a better place for all Americans, not merely enrich the unscrupulous or crafty few. As a result, his Senate harangues were a lonesome cry in the takeover/arbitrage/leveraging/executive-perk wilderness. His contempt for overpaid investment bankers was exceeded only by his disdain for overpaid corporate CEOs.

Anyway, we settled into the leather chairs of the back room while he ordered a medicinal Scotch, double. After his nerves stabilized a bit, I suggested he let me give him an informal rundown of what little I knew.

"High goddam time." He grimly extracted a notebook.

"Jack, here's the mea culpa. I now confess before God and you that I've been a very uneasy point man for an outfit that calls itself Dai Nippon, International. They have been playing a little game with interest-rate futures and currency forwards in quantities that stagger the mind. Thus far, however, their activity has been strictly legal and right out there for everybody to watch. I also tried to warn anybody who would listen. Consequently any of our financial analysts who didn't see this brouhaha coming a mile away has been suffering a severe rectal-cranial inversion."

He snorted and pulled at his drink. "Okay, since you seem to know so much about this Dai Nippon outfit, care to clue me in on what's down the road?"

"Jack, I think the answer is one nobody's figured." Then I delivered my brand-new theory.

He stared at me skeptically, sipping at his drink. "Good God, you've gone off the deep end, Walton. I always assumed it would happen someday."

"Jack, from what I hear, none of the big Japanese securities dealers here will even pick up their phone. What does that tell you? They're softening us up using the weapon the market dreads the most. Uncertainty. What better way to terrify the Street? Christ, let somebody start a rumor the President has a toothache, and they practically have to shut down trading."

"Matt, nobody's going to believe your crazy scenario.

Matter of fact, I don't either. It's too wild. I'll tell you what most people are saying. All the news shows tonight hauled out our doomsday economists, Lester Thurow and his ilk, to declare we had this one coming. The consensus going around is the Japanese are finally fed up hearing us bellyache about trade barriers; so they've decided to treat us to a pointed demonstration concerning exactly who needs who. That's all. Japan now controls America's destiny. But since a few people here still have the idea we won the last war, Tokyo just wants to make sure we get our history straightened out."

Could be, I answered. But I still thought everybody was missing the forest for the trees. Then I went on to describe Noda's building, his high-security computer setup. Nobody would install an elaborate headquarters like that merely to get your attention.

He listened in uncharacteristic silence, beginning to appear a little more convinced. "Well, let's run with your cockamamie theory a second." He rattled his ice cubes, a habit of his I always found distracting. "Say something bigger is coming up, and this is just the pre-game warm-up. What can we do?"

My suggestion, that the President close down all our financial markets immediately to keep Noda's hands off them, was not received enthusiastically.

"You want me to stand up in the Senate and propose that?" His already ruddy cheeks were beginning to redden even more as he glared around the paneled room. "Matt, I'd be tarred and feathered by every stockholder in the country."

Maybe so, I said. But what about Noda's vast Third Avenue nerve center? His supercomputer? The Uzis? It had ominous portent. "Tell you the truth, Jack, I'm not even sure I should be talking to you. After what happened today, that guy scares hell out of me."

We ran through the known facts a couple of times more, not getting any closer to agreeing on the big picture. Finally he summed up his own fears: "In my view, we weathered the October '87 crash because the Fed still had some control over liquidity. When money started disappearing out of the market, they just printed more. They countered deflation with inflation, kept the dollar in balance. This time, though, we've lost all three pillars under our financial house—stocks, bonds, and the dollar. There's nothing the government can do to stop this one."

At that moment there was a tap on my shoulder, and I looked up to see Eduardo, the club's recent attempt at Hispanic affirmative action, handing me a cordless phone. Then I remembered I'd set up things downtown to forward calls to the bar. The next sounds in my ear were the mellifluous profanities of Dr. William Henderson.

Bill had just gotten off a plane after spending a few days loosening up at the Sandy Lane in Barbados, assaulting its reserves of Sugar Cane Brandy, and he was mad as hell. His "Georgia Mafia" had been caught flat-footed. Why hadn't I warned him that the Japs had scheduled this move? Surely I must have had an inkling. He would have shorted the market and scored a pile.

I suggested he calm down, that nobody, me included, had seen it coming. What's more, I had a strong feeling it was all—

"What the hell's next?" Bill continued, oblivious. "What's Noda saying?"

"Nothing here but speculation. He's probably getting his beauty sleep at the moment. But take some of your own advice, friend, and stand clear. I've got a feeling there's less here, and more, than meets the eye. Don't, repeat, don't get the idea you can outguess Matsuo Noda. I think he's pulling a number, but—" "

Bill interjected something brief and unrepeatable and rang off, undoubtedly headed for consolation.

"Was that Henderson?" Jack asked, then watched me nod. Bill had pitched in to help Jack out of a few tight spots on the money front, in appreciation of which O'Donnell had proposed him for the Council of Economic Advisers—and shortly thereafter forfeited all credibility with the administration. These days he couldn't have gotten into the White House on a VFW tour. "Well, the man's got no idea when to keep his mouth shut with the press, but he's nobody's idea of a fool. What does he think this is all about?"

"Sounds like he's just studying the tea leaves like everybody else."

Jack sighed, then rattled his cubes some more. "Well, if Henderson can't figure out what's going on, then nobody can. That in itself ought to tell us there's a patch of slippery ice down the road. My own guess is the Japanese have decided to play a little poker with the American markets without having the damnedest idea of the consequences."

"Jack, what if they do?"

After we sat there gazing at the gilded plasterwork ceiling for a while, we started getting caught up on old times. He inquired what I thought the press would do to him if he married one of his staffers. My guess was that a photo of Washington's most eligible divorce veteran at the altar once more would probably make the cover of People. Everybody loves a lover. That possibility seemed to cheer him up a bit.

It was round about then, probably close to ten-thirty P.M., that another call came through. This time I already had a feeling who it was, and I momentarily considered not taking it. But then, why not let O'Donnell have the story straight from the source.

The caller was, of course, Matsuo Noda. It must have been late morning, Japan time, after a very long night.

What, he inquired, was my on-the-spot reading of the scene?

"I don't know." The phone had that same funny whine I remembered, as though he had a private phone system worldwide. "Maybe you should be telling me."

Noda-san, no surprise, didn't seem particularly unsettled by the developments.

"I assure you there is no cause for alarm, Mr. Walton. The situation may seem temporarily unfortunate, but I have long believed all things turn out for the best."

"Could have fooled me. But while we're all waiting for the silver lining to this cloud, you could do everybody a favor and get your goddam securities dealers here to issue a statement clarifying their intentions."

"Mr. Walton"-—he chuckled—"you ascribe far too much influence to me. I am merely a banker, one of many in Japan. I have no control over what our institutions choose to do or not do."

"I wish I could believe that."

"Well, I suppose there are many things about Dai Nippon that need to be explained more fully. I look forward to seeing you next week. We can talk then."

Upon which he advised me just to sit tight. All further communications would be routed through their office uptown. And with that dictum in place, he suddenly had better things to do and said thanks for all my help. There was the sound of some satellite bleeps, then silence.

Welcome to the Brave New World, I thought. Again I had this definite feeling the DNI rodeo had just begun.

By then Jack was nearing terminal exhaustion. I passed along Noda's cryptic refusal to lift a hand, advised him to make a statement tomorrow that the U.S. financial markets could be dangerous to everybody's health, and helped him into a cab for his aide's place uptown. The evening was fizzling out with nobody left at the bar but regulars. Thus I went home alone to check in with Amy and then drift off into a very unsettling dream.

My nightmare was over by morning. America's was just beginning.

[CHAPTER THIRTEEN]

Funny thing about investor confidence: often as not it relies more on faith than facts. Give it a little unsettling heat, and it can just melt away. Belief turns to fear, then blind panic.

Insight number two: the bigger you are, the more scared you tend to get. So what appeared to be a sudden Japanese loss of conviction regarding the U.S. Treasury's ability to meet its standing obligations received close attention from the world's bankers, from Zurich to Hong Kong. The Japanese securities outfits just kept dumping, and nervous phone inquirers from locales as diverse as the White House and Red Square were all advised that everybody was "in a meeting and will get back to you." As a natural consequence the world's major financial players succumbed to a terminal case of nerves.

When the bond markets finally reopened on Wednesday, Treasury's thirty-year issue had scooted up four full interest points. There was still a market for Uncle Sam's IOUs—everything on this planet will move for a price—but buyers were wary. They wanted their newly perceived risk sweetened considerably.

Predictably rates on corporate and municipal bonds did a similar tango north, leaving America's conservative investors wondering what hit them. In fact, a lot of scheduled corporate debt offerings were scuttled to await more settled times and lower rates.

The dollar also stayed on the critical list. Everybody was worried the U.S. Treasury might just rev up the printing presses to produce enough greenbacks to pay off all the foreigners who wanted their money back. Since Paul "tight money" Volcker—who probably would have thrown his robust torso onto the ink to prevent that from happening—was now gone, there was nobody at the Fed with a real commitment to holding back the flood.

And the stock market. People weren't starting to call this Black November for nothing. A lot of players feared that the higher rates would hobble the economy, a perfect excuse to head for the exits while the getting was good. As Henderson liked to observe: psychology is a fundamental too. The next day the Dow sank another two hundred points; the day after that a hundred more. (Where had those sellers been two days before?) The fourth and fifth days it slowed, heaved an audible sigh of exhaustion, and sort of peered up out of the bunker to see if the bombing runs had let up. The downward pressure was still evident, but it was finally losing some of its steam.

Yours truly did a lot of thinking as the week wore on, while the country appeared to wobble on the brink of unprecedented disaster. I also conferred now and then with Jack O'Donnell and with Henderson in between their appearances on TV chat shows. Although Bill's bearish reading of the nation's estate had been vindicated well beyond what even he had envisioned, I can report he took small pleasure in his newfound celebrity; he was increasingly miserable over his own missed opportunities in the financial casino. Jack, for his part, had gained a profound appreciation of the helplessness of government to intervene when fear and greed seize the marketplace.

My personal ruminations on the situation turned out to be too Machiavellian for anybody to entertain seriously. Question: If you wanted to pull all your money out of the U.S., is this how you'd do it? Answer: No way. Instead you'd go about it gradually, a little at a time, in order not to stampede the markets and cause exactly what was happening now.

Ergo, I concluded, this isn't real. Noda just wants every

investor in the world to assume there's a Japanese pullout underway.

But why the grandstand play? Sure, he'd made a pile, but he didn't seem like a guy who had to sweat his mortgage payments. Nor did this kind of market manipulation require a building in midtown Manhattan and a computer setup to rival NORAD headquarters. Something more had to be coming. And the only thing I could think of was that Noda's something had a lot to do with my profession.

This was not a welcome piece of prognostication to loose upon the world. Since the financial markets already had plenty of problems on their plate, there wasn't all that much interest in speculating about the next course. Consequently nobody made the slightest attempt to man the ramparts for what was ahead. Our financial battleship had been stopped dead in the water and its engines disabled, but nobody was even bothering to prime the guns. This couldn't be an all-out attack. Right?

Wrong. The stage was now set for Noda's real move. The following Saturday I was summoned to Dai Nippon's midtown fortress where I watched my crazy theory become reality. Before anybody in our shell-shocked financial centers had time to digest what had happened, Matsuo Noda—his Dai Nippon Eight-Hundred-Year funds underwritten through a syndicate of Japanese banks and insurance companies led by the Dai-Ichi Credit Corporation, Ltd. of Tokyo—hit the beach.

In the days to come I did manage to assemble a rough outline of how Noda pulled off his brilliant opening feint. It was elegant, and to savor it fully requires a quick peek at his reserves—Japan's bankbook.

Start with personal savings, the hundreds of billions being squirreled away by individual Japanese. Then add to those monies the assets of Japanese pension funds, private savings organizations with several hundred billion dollars to lend out. Next come insurance companies and corporations, similarly awash in loose cash. Taken together, the total amount of excess capital in Japan is now well over five trillion dollars.

If all those zeros befuddle you as much as they do me, try thinking of it like this: a trillion dollars is the size of the annual U.S. budget. So if the Japanese regulators opened the floodgates and let all that money roll, its citizens have the ready bucks to finance our government's entire budget—Lockheed, stockpiles, and pork barrel—for at least five years using just what's in their mattresses.

As it happens, all this Japanese cash has become an important, nay, indispensable, component of the American financial scene. We and the Japanese are like an old married couple: they're the wife who scrimps and saves, we're the husband who borrows and squanders. The middlemen who rifle her purse and ship the proceeds to us are, increasingly, Japanese investment firms.

At least half a dozen major Japanese securities dealers with offices in New York run big bond departments. The foremost of these is, of course, Nomura Securities International, the world's largest brokerage house (having aced out Merrill Lynch). With over two hundred billion dollars in customer accounts, Nomura is now a primary dealer in U.S. Treasury issues, meaning they can buy directly from the government and sell to their clients. And since Treasuries pay several interest points better in return than Japan's miserly savings accounts, their customers back home think they're getting a terrific deal. Little wonder Japanese investors finance a full third of America's budget overdrafts these days.

Another major player is Daiwa Securities America, which also underwrites federal paper on its own. Nor should we overlook Nikko Securities and Yamaichi Securities, both handling money in the tens of billions. These outfits and others are well past the beachhead stage of entry into the world capital markets. They're entrenched; they're big; and they know how to play hardball. Were they involved in Noda's assault? Nobody ever knew for sure. But you figure it out.

Banks. As it happens, the biggest one in the world is Japanese. The Dai-Ichi Kangyo Bank, Ltd. of Tokyo has unceremoniously reduced Citicorp to second banana. Rounding out the top five worldwide are Fuji, Sumitomo, and Mitsubishi. And worldwide means everywhere. Japan controls ten percent of the U.S. banking business, a quarter of all British banking. Of the ten largest banks in the sovereign state of California, four are Japanese. Japan in brief has become banker to the world, with more ready money than anybody else, and it also has a battalion of financial samurai who know the game.

What makes these Japanese players especially powerful is the kind of bucks they represent. It's called hot money—cash lent out short-term and therefore subject to immediate withdrawal. Instead of tying up their overseas bankroll for years, they stick to offshore investments that can be called in tomorrow. At home Japan invests for the long horizon, but abroad the bulk of the money is short. Hot money.

Since foreign investors normally pick up well over half of a given Treasury refunding, the paralysis when Japan began recalling its hot money, thereby spooking buyers worldwide, was as predictable as the sunrise. Matsuo Noda didn't have to be a Rhodes Scholar to realize how much mileage there'd be in a big Japanese sell-off program and a "no comment" from his dealers.

Here's how he orchestrated the details. Apparently it had all been very Japanese, very consensus. A few phone calls, then a lot of meetings over green tea. Later on, some late nights with sake. Noda, thanks to his new clout, had been in the driver's seat from the start. The money managers in Tokyo were all feeling the heat over demands by investors that they participate in the multiple Eight-Hundred-Year funds he'd floated. All across Japan people were starting to ask whether their savings were out there waving the flag too. A lot of those managers were starting to get edgy, so Noda thoughtfully struck a deal, a little consensus.

Okay, hold your monies, but let's get organized. When the next Treasury collection plate comes by, don't roll over any more short-term U.S. T-bills and don't take a piece of the next sale of long bonds. In fact, that's the day you begin to divest. Staggering losses? No problem. I just happen to have everybody's portfolio insulated with futures contracts. Sell away, and even when the price plummets, nobody's gonna lose a yen. In fact, you can have a piece of the currency windfall I've set up. Apparently everybody shook hands on it, or whatever they do in Japan nowadays.

Consequently none of the big Japanese houses in New York had to take a lot of risk. The sellers were covered by Noda's rate contracts, which I later discovered he'd passed along (at cost) to anybody who needed them. The rest he sold himself for a hefty profit. So in the course of his play, he incidentally raised several billions in additional operating capital for Dai Nippon while fully protecting the home team.

When the dust had finally settled, it turned out he didn't actually liquidate very much Treasury paper after all. He didn't need to. In fact Japan dumped only about eight percent of its

holdings. If you think about it a minute you realize they couldn't possibly have hoped to divest everything they had in dollars. What would they do with all that cash? Loan it to Brazil?

Veterans of world finance will tell you there were already precedents for this kind of Japanese muscle. Back in the mid- eighties, Nomura Securities had unsheathed its financial sword and totally controlled the Eurobond markets for about a fortnight. They were just letting everybody know they were in town. So there was nothing particularly unprecedented about a little number whereby a handful of Japanese banks and securities firms could, by concerted action, bring the U.S. financial system to its knees.

Although I'd been convinced from the very first that Matsuo Noda had engineered the whole move, I had no hard proof. Besides, what was I supposed to do? No laws were broken. He was playing strictly by the rules. So I just took cover like everybody else and watched the marketplace disintegrate. My main preoccupation was a growing suspicion that Noda was now moving up his battery of guns for the next round of shelling.

I was right. His Treasury sell-off had merely been a demonstration of firepower. Its effectiveness must have given confidence that his beachhead was secured, since he came ashore at the end of the week to take personal command of the real landing.

He and his general staff hit town quietly and with no fanfare on Thursday, spent Friday in a strategy session, and on Saturday took over the computerized command HQ on Third Avenue. That afternoon Tanaka called and ordered me (very politely but curtly) to assemble my records and come uptown. The operation was being consolidated and Noda-san wanted me coordinated. From now on I would be working out of their offices.

This was it. Just what I'd been waiting for. At last I could confront the bastard, one-on-one. No way was I going to be part of the big assault I saw directly ahead.

My first look at the revised operation uptown confirmed my worst fears. The technical analysts had been replaced by a new set of troops: money men. Open collars were gone, supplanted by a lot of business-school types wearing thin black ties. Tanaka's office had been moved off to the side; the corner office now belonged to Dai Nippon's four-star commanding general: Matsuo Noda. After I'd cleared security, that's where I was led.

"Mr. Walton, how good to see you again." He looked up from a printout, his silver hair perfectly groomed. "I do hope today is convenient for you."

"This is going to be brief." I ignored the chair he rose to adjust for me. "I'm only here to advise you that my participation is officially terminated as of this moment. I'll be sending you a final invoice next week. You can find yourself another attorney."

"But your work has scarcely begun." He appeared to be mildly puzzled, as though I'd just made a small misstatement about the weather or some such. "We expect your participation to be crucial."

"Surely you're joking." I was turning to leave.

"Mr. Walton." He shifted the printout around and shoved it across the desk. "Contrary to what you may presume, we are here to help this country. You might wish to look over our program for the near term."

"This I've got to see." I came back and studied it for a few seconds . . . then stared back at him.

"Impossible." I finally realized he was serious. "Whatever you're thinking, I'll tell you right now you don't have a chance. These outfits have lawyers. Hundreds of them."

"Ah, but that's why you are on our staff. This is your specialty." He smiled. "Remember the Book of Five Rings by the swordsman Miyamoto Musashi? In it he describes the three kinds of attack. There is the Ken no Sen, where you move first and catch your opponent unprepared; next is the Tai no Sen, whereby your initial move occurs a split second after your opponent's; and finally there is the Taitai no Sen, in which you and he attack at the same instant. What has happened up until today might be likened to the Ken no Sen. We have made sure that nothing was anticipated. Very soon, however, we will have to move to the Tai no Sen, responding with lightning speed to the moves of those who would thwart us. Miyamoto Musashi declared correctly that if you are attacked with force, you must counterattack with even greater force and thereby upset momentarily your opponent's rhythm. That moment can mean victory, but only if you are totally prepared." He leaned back. "We must be totally prepared."

"Why in hell would I want to help you? I guess you didn't hear me. I've just resigned." I turned for the door. "Besides, nobody could pull off what you're planning. You're going to have battalions of attorneys moving against you."

"I expect that." He stopped smiling. "But that area is your responsibility now, Mr. Walton. A good swordsman does not think, he acts. Intuitively."

"And if I refuse?"

"You cannot possibly."

"Try me."

"Only you can handle this, Mr. Walton. Betray us, and you may well witness the disappearance of America as an industrial nation. The time is now or never."

That zinger gave me pause. He meant it. But before I had a chance to tell him he was completely crazy, he went on to sketch out what he claimed was his objective. How he planned to address the American "crisis" and resolve it.

Let me tell you my first impression of Matsuo Noda's scenario. It was legal, it was legit, and it was—as Joanna's teenage niece used to describe notable phenomena—totally fucking awesome.

What's more, he wanted me to stay on as tail-gunner. The truth? I felt the disorientation of a kid who'd been fooling around in the Soap Box Derby suddenly being handed a slot in the Indianapolis 500.

The most astonishing part of all was, I had the feeling he just might pull it off.

You're right. I should have said no, not on your life, this is way out of my league, never in a million years. . . .

Instead I said I'd think about it.

Good, he said. Why didn't I stick around till Monday and get a feeling for the operation?

I didn't shake his hand. I just walked out and poured myself a cup of green tea from the huge urn there in the middle of the floor. Walton, you idiot, how did you get yourself into this?

Which is when I spotted a sporty looking lady way across on the other side of the floor, over by the climate-controlled NEC mainframe. Something about her seemed vaguely familiar. Definitely not DNI staff. Wearing jeans, dark hair in a nice designer cut, handled herself like a mover. Not to mention a world-class bottom inside those tight, shapely Calvins. From all appearances she actually seemed to be second-in-command. She was reading the riot act to Tanaka about something to do with the computer, had the self-important little fucker bobbing and weaving. Who was that? Hadn't seen her around here before.

Well, now, no time like the present to head on over and check into this. A fellow gaijin. Could be she'll explain what in hell's going on. Is Noda real?

Suddenly she turned around, saw me, and stopped. I stopped. We both just stood there trying to remember. She hit pay dirt first, but I was only microseconds behind.

Want to know my first thought, my very first thought? Matsuo Noda, you son of a bitch, you're even smarter than I'd given you credit for. You've hired the best, the very best.

"Is this how you pick up your women these days, Matt? Given up on vegetable stands?" She was walking toward me wearing a smile. I tried to grin back. "How are you, Matthew? Good to see you've still got your hair. Well, most of it."

"Tam Richardson, I don't believe this. Now I know it all is a dream. Please tell me you were kidnapped. None of this is really happening, right? It's just a very big, very bad dream. We'll all wake up tomorrow and go to the beach."

"Welcome aboard, partner." She stuck out her hand. "It's going to be a wild trip."

"No kidding." I looked her over as I took her hand. Nice and warm. Time had treated her well. Very well. "How long have you known Noda?"

"Less than a month." She was checking me over too. Wonder how I was doing. "How long have you been helping him?"

It occurred to me that we both should have been using that classic hooker response when the guy asks his young companion how long she's been in her particular field of endeavor and she replies, "Long enough to know better."

"Few months now. Noda is pretty impressive." I tried to sound casual. "Not to mention persuasive."

"That he is."

"Well, let's have a toast to winning this." I turned to the urn. "How about some tea, Professor?"

"Love it."

"Tam, let's just hope these guys don't suddenly decide to eat us alive." I passed it over. "What do you think our chances of survival are?"

That one startled her. I got the impression she was half thinking the same thing. Then she managed a thin laugh.

"We'll eat them first if they try."

"You still talk tough. I always told you you should have been a lawyer."

But she was right. Once the cards are dealt, you play to win.

Which is exactly what I planned to do. Since my own part was still down the road, that weekend I just sat in their offices watching spellbound as Noda and Dr. Tamara Richardson reviewed the data and put together the financial details. Next, a lot of coded telexes were sent out to pile up somewhere in Tokyo with instructions for routing of the funds.

After I'd digested his opening move, I did have occasion to ask the boss a few pointed questions. Such as, wasn't he at all nervous that Wall Street might rebound before he could get rolling? He replied, correctly as usual, that the total collapse in the financial markets would last for a while. Even though the dollar was still down for the count (over forty percent), he figured only the most intrepid foreign speculators would go plunging into the American stock market looking for bargains. As for American investors, most of them, including the institutions, were still in shock. He rightly forecast that the herd mentality of the Street hadn't been repealed. War stories of '87 were going around and nobody wanted to make the textbooks as a fool. Better a little profit forgone than more money lost. The mutual fund managers, most of whom had been caught with their pants at half-mast, were devoting their energies that weekend to composing creative explanations.

Events Monday proved him to be essentially on target. There was an eerie quiet over the financial landscape. Everybody was waiting for somebody else to try breathing life back into the corpse.

Then a few analysts noticed something peculiar. Anonymous buy orders were coming in, more and more, for stocks in the sector hardest hit, high tech. Maybe it was bargain hunters, but the buyers weren't any of the "growth" mutual funds that might have been expected to lead the action. In fact, many of those hotshot managers were relieved to part with some of the dogs they'd ridden down that long, lonesome decline of the week before.

Gradually the prices of certain securities began to edge up

in this early thin trading, enticing more and more holders to "sell on strength." What issues? First off, anything to do with computers. Of course there weren't all that many hardware manufacturers left around by then, after the shakeout and mergers of the mid-eighties, but somebody was buying heavily into the few that remained. They were also actively purchasing little software outfits. Those stocks had taken a heavy beating over the past week, so prices were at an all-time low for most.

Other industries they started to nibble at were telecommunications, aerospace, biotechnology. They seemed to be looking for outfits with substantial R&D operations: the focus was on creativity, growth sectors, the sunrise industries.

Of course, what this mysterious new buyer was really doing was snapping up outfits loaded with labs and Ph.D.'s. Dr. Richardson and my new client Matsuo Noda had DNI acquiring companies short on competent management and market share but long on research, innovation—the one thing we were still halfway good at. Looked at differently, what Dai Nippon was really buying was underused brainpower, the American smarts currently going to waste thanks to inept corporate management.

Explanations began to sprout all over the place—from the "Heard on the Street" column in the Journal to Dan Dorfman, a guy with a bloodhound's nose for Wall Street shenanigans. But the hard truth was nobody could put it together. Who could have? The play was too ambitious even to imagine.

You guessed it. With the trillions and trillions now at its disposal, Japan was about to take charge of America's future.