The Samurai Strategy

by Thomas Hoover

(The Samurai Strategy)

Thomas Hoover

www.thomashoover.info

THE SAMURAI STRATEGY A Bantam Falcon Book / June 1988

All rights reserved. Copyright © 1988 by Thomas Hoover.

Bantam Books are published by Bantam Books, a division of Bantam Doubleday Dell Publishing Group, Inc.

OPM 0 9 8 7 6 5 4

Key Words:

Author: Thomas Hoover

Title: The Samurai Strategy

Wall Street, Japanese Stock Market, Treasury bonds, Stock Market, Imperial Sword, Emperor of Japan, Japanese History, Supercomputer

The following story is entirely imaginary . . . I hope.

CHAPTER ONE

New York, New York. Friday, early September, dusk. Heading uptown on Madison. Sheets of icy rain washed the pavement, heralding the onslaught of autumn and the miserable winter to come. The city was poised for its cruelest months, that twilight of the spirit when strangers arm-wrestle for taxis, nobody has time to hold a door, and you cherish every fleeting human kindness.

Bring on the blizzards, the holiday madness. This winter I was planning something long overdue. To treat my daughter Amy, the Madame Curie of her ninth grade, to a real vacation. Just us. We'd leave at Thanksgiving and stay gone through the Christmas break. She got to live with me three months a year, and December was by God going to be one of the months. School? She'd already skipped a year; maybe she was a little too fast-track for thirteen.

Since Joanna, my ex, had already lined up her own holiday excursion (Amy the spy claimed it was with some divorced Tishman VP), she hadn't bothered inventing the usual roadblocks. Clear sailing. We'd open the house down in St. Croix and spend a month getting reacquainted. Work on the tan and some postgraduate snorkeling, a strategic move while I still enjoyed a small sliver of her attention, before a certain "totally terrific" skateboard virtuoso finally got around to noticing her. Only a couple of jobs needed finishing, but they'd be wrapped up with weeks to spare.

That night, in truth, had its moments of nostalgia. The destination was Sotheby's auction house, a place where Matthew Walton was greeted by name at the cashier's window. Home away from home for obsessive collectors. I leaned back

against the vinyl seat of the Checker, letting the rhythm of the streetlight halos glimmer past, and reflected on all those happy nights I'd made the trek with Joanna. She'd had no real interest in my collecting hobby, Japanese samurai swords and armor, but she was always a decent sport about it. Besides, she had her own passions. While I was agonizing over long blades and short blades, she'd sneak off and browse for something French and nineteenth century and expensive. Fact is, I'd usually plan ahead and have something of my own on the block just to pay for that little sketch, or print, she suddenly had to have. Out of habit I'd even shipped up a couple of mistakes for the auction this evening (a hand axe and a lacquered-metal face guard).

Though tonight's sale had only a few odd items in my specialty, the slim offerings actually suited the occasion. It left the evening open, time for the real agenda—getting things rolling with a new client who'd inexplicably handed me a job as simple as it was strange.

The man, name of Matsuo Noda, had rung all the way from Japan Friday before last, introduced himself in generalities, then declared he had a pressing legal matter requiring both speed and confidentiality. Inquiries had led him to me. Would I have time to help him locate an office building to buy? He claimed he was head of a Kyoto consulting outfit that called itself Nippon, Inc., and he was looking for something in midtown, seventy-million range.

Honestly I couldn't quite believe he was serious at first. Why this job (just a little legwork, really) for somebody he'd never even met? I could swing it, sure, but now that Japanese investors were snapping up U.S. property right and left, who needed some ex-Texan turned New York lawyer knocking around? There was no rational reason to engage a corporate attorney.

"Out of curiosity, why aren't you working through one of the Tokyo firms here in New York, say, Hiro Real Estate or KG Land? Surely they could—"

"Mr. Walton," he interrupted smoothly but firmly, "allow me to say I have my reasons. May I remind you I stressed confidentiality."

"Merely asking." I took a deep breath. The connection was distorted, a high-pitched hum in the background, as though he wasn't using commercial phone lines. "If you want, I can look around and see what's on the market . . . and in the meantime how about sending along a prospectus, just for the file?"

"Assuredly," he said, "and I do look forward to working with you." After a few more polite nothings, he abruptly closed out the call.

Peculiar. That wasn't how the Japanese road show usually did business. From what I'd seen, Tokyo invests very cautiously and deliberately, sometimes "researching" a deal half to death. I momentarily wondered if it wasn't just one of the jokers from my old partnership pulling my leg.

He was real enough. A brochure arrived by overnight air, bound in leather, with a flowery covering letter. Two problems: most of the thing was in his native tongue, and what I could read didn't tip his hand. From the looks of its public disclosures, Nippon, Inc. was merely some kind of money manager for Japanese investment banks; it had almost no assets of its own. All I could find listed were a few million dollars, lunch money for a Japanese outfit, mostly cash parked in some short-term Euroyen paper. That, and a head office in Kyoto, was the sum of it. What's more, Noda only worked with Japanese banks and firms. No foreign clients.

So why did this man suddenly require space in New York? An entire building. I honestly couldn't figure it. On the other hand, with any luck the whole deal probably could be put together with a few phone calls.

By way of introduction, let me say that I worked, technically, as a straightforward attorney-at-law. I say "technically" because I was, in fact, a freelance defensive back in the corporate takeover game, which these days is anything but straight. You'd have to go back to the roaring twenties to find so many creative screw-jobs.

Some people are drawn to power; guess I'm more attracted to the idea of occasionally whittling it down to size. So when some hotshot raider found a happy little company whose breakup value was worth more than the current stock price, then decided to move in and grab it, loot the assets, and sell off the pieces—one of the players apt to end up downfield was Matt Walton. For reasons that go a long way back, I liked to break up the running patterns of the fast-buck artists. It's a game where you win some and lose some. The trick is to try and beat the odds, and I suppose I'd had my share of luck.

Give you a quick example. Back in the spring, a midsize cosmetics outfit called me in as part of their reinforcements to fight an avaricious rape, better known as a hostile takeover, by one of their biggest competitors. After looking over the balance sheet and shares outstanding, I suggested they divest a couple of unpromising consumer divisions—namely a "male fragrance" line that made you smell like a kid leaving the barbershop, and a "feminine hygiene" product that could have been a patent infringement on Lysol—and use the proceeds to buy back their own common shares. We also threw together a "poison pill" that would have practically had them owning anybody who acquired more than twenty percent of their stock. Our move scared hell out of the circling vultures and reinforced my reputation on the Street (unduly harsh, I thought) as a give-no-quarter son of a bitch.

Another fact worth mentioning is that I worked without benefit of a real office; after selling off my piece of the law partnership, I operated out of my place downtown, with a telephone and a couple of computers. A kindly gray-haired dynamo by the name of Emma Epstein, who had a rent- controlled apartment down the block, dropped by afternoons and handled correspondence, filing, matrimonial advice, and the occasional pot of medicinal chicken soup. The only other member of my staff was a shaggy sheepdog named Benjamin, who served as security chief, periodically sweeping the back garden for the neighbor's cat. That was it.

Oh, yes, one other item. Crucial, as it turned out. I'd always been a collector of something—once it was antique spurs, for chrissake—but about ten years earlier I'd started to get interested in things Japanese and ended up going a little overboard about old swords and such. Joanna's unscheduled departure managed to burn out a lot of my circuits, and what had been merely an obsession grew into something a little crazy. For a year or so I became, in my own mind at least, a sort of American ronin, a wandering samurai.

You see, the Japanese warriors had a code that said you ought to live every moment in full awareness of your own mortality. When you adopt this existential outlook, so they claimed, all regrets, emotions, complaints, can be seen as an indulgence. You're ready to meet life head-on, to risk everything at a moment's notice. That's the only way you ever discover who you really are, and it's supposed to make you marvelously detached.

Almost enough to make you forget how your raven-haired, brilliant, sexy mate packed it in one New Year's Eve twenty

months past . . . when you called late from the office, again . . . after declaring that that was the goddam last straw and apparently the only thing you could find worthy of undivided attention came printed on goddam computer paper and she was goddam sick of it—which she demonstrated the next day by slamming the door on her way out.

Add to which, she used my momentary disorientation to get custody of Amy. So while I was battling corporate Goliaths, I let her walk off with the only thing I would have given my life for. The more time went by, the more I wanted to kick myself. Alex Katz (of Walton, Halliday, and Katz—now minus the Walton) read the custody agreement the day after I signed it, sighed, glared over his smudgy half-lenses, and announced that this kind of unconditional surrender should only be signed on the decks of battleships. What did he have, a law partner or a fucking schlemiel?

He was right, for all the wrong reasons. Not long after, I cashed in my piece of the firm and went independent. Win or lose, it's best to sort things out on your own. I was then forty- three, six one, and weighed in at an even one eighty. There were a few lines on the face and several more on the psyche, but the sandy hair was mostly intact, and I could still swim a couple of miles if absolutely essential. Maybe there was still time for a new start. Part of that therapy was going to be our trip.

Perhaps I should also add that I'd had a brief "rebound" fling, for what it was worth. The lady was Donna Austen, a name you'll recognize as belonging to that irrepressibly cheerful "Personalities!" host on what Channel Eight likes to term its Evening News. She'd called about a segment on the subject of the cosmetics company takeover, then very much in the local press, and I'd said fine. She ended up downtown, and soon thereafter we became an item. She was the closest I'd had to a girlfriend, and at that it was mostly an on-again, off-again thing—which terminated in an event reminiscent of the Hindenburg’s last flight. In the aftermath I went back to chatting with Amy every day on the phone, putting together stock buyback packages, and collecting Japanese swords.

Anyway, while the cab waited for a light, worn-out wipers squeaking, I fumbled around in my coat pocket and extracted the meishi, the business card, one side in English, the other Japanese, that had been included with Noda's letter. He'd

personalized it with a handwritten note on the side with English print. Now, I'd kept track of the new Japanese investment heavies in town—Nomura, Daiwa, Nikko, Sumitomo—since you never know when a corporation might need some fast liquidity. They were starting to play hardball, and these days (with all that cheap money back home) they would underbid a nine-figure financing deal before Drexel Burnham could spell "junk bond." But Nippon, Inc.? Never heard of the outfit.

Well, I thought, you'll know the story soon enough. The driver had just hung a right on Fifty-seventh and was headed east toward York Avenue. I'd called that afternoon to lower the reserve on one of my lots and had been told that because of some union squabble the preview would continue till just before the sale, now scheduled to kick off at eight-thirty. It wasn't quite seven yet, so we would have at least an hour to run through my list of prospective buildings.

As the cab pulled up next to the chaste glass awning, I took a deep breath, shoved a ten through the Plexiglas panel between the seats, and stepped out. While the battered Checker (lamented remnant of a vanishing species) squealed into the dark, I unbuttoned my overcoat and headed up the steps. A few grim-faced patrons milled here and there in the lobby, but nobody looked familiar. There was even a new girl at the desk by the stairs, ash blond and tasteful smoked pearls, pure Bryn Mawr art history. A class act, Sotheby's.

It appeared that most of the Japanese crowd was already upstairs, undoubtedly meditating on their bids with the meticulous precision of the Orient. I was headed up the wide, granite steps myself when I decided to check out the downstairs one last time.

Hold on, could be there's a possibility. Waiting over by the coat check, thumbing the catalog, was a distinguished-looking guy, retirement age, wearing a light, charcoal suit. Italian. Unlike the usual Japanese businessmen, he clearly didn't assume he had to dress like an undertaker and keep a low profile. No, probably just some Mitsubishi board member thinking to diversify his portfolio with a few objets d'art.

Abruptly he glanced up, smiled, and headed my way. I realized I'd been recognized.

"Mr. Walton, how good of you to come." After a quick bow he produced his card, a formality that totally ignored the fact he'd already sent me one. As convention required, I held it in my left hand and studied it anew while I accepted his hearty American handshake. "It's a pleasure to meet you. At last."

At last?

I let that puzzler pass and handed over a card of my own, which he held politely throughout our opening ritual, then pocketed.

Noda had a mane of silver hair sculptured around a lean, tan face, and he looked to be somewhere between sixty and seventy. Though his dark eyes were caught in a web of wrinkles that bespoke his years, they had a sparkle of raw energy. He moved with an easy poise, and the initial impression was that of a man eminently self-possessed. He had that sturdy, no-nonsense assurance usually reserved for airline pilots. If you had to entrust somebody with your wife, or your life savings, this man would be your pick.

Well, my new client's a mover, I told myself. All the same, I accepted his hand with a vague twinge of misgiving. What was it? Maybe something about him was a little too precise, too calculated.

"Mr. Walton, permit me to introduce my personal consultant." He laughed, a slight edge beneath the charm, and more wrinkles shot outward from the corners of his eyes. "I always seek her approval of major acquisitions, particularly those of the Heian period, her specialty." He turned with what seemed obvious pride and gestured toward the tall Japanese woman standing behind him. I'd been so busy sizing him up I'd completely failed to notice her. "I must confess she is, in fact, my . . . niece. I suppose that ages me." Another smile. "You may possibly be familiar with her professional name, so perhaps I should use that. May I introduce Akira Mori."

Who? I stared a second before the face clicked into place. And the name. They both belonged to a well-known commentator on Tokyo television. Only one slight problem: her "specialty" had nothing to do with art.

"Hajimemashite. How do you do, Mr. Walton." She bowed formally and, I noticed, with all the warmth of an iceberg. No surprise—I knew her opinion of Americans. She did not bother meeting my eye.

She looked just as I remembered her from the tube. A knockout. Her hair was pulled back into a chignon, framing that classic oval face, and her age was anybody's guess, given the ivory skin and granite chin. She was wearing a bulky something in black and deep ocher by one of the new Tokyo designers. For some reason I was drawn to her fingernails, long and bronze. The parts, a mixture of classic and avant-garde, did not seem of a piece, the kind of detail you didn't notice on the TV. But there was something more important than her looks.

I'd been to Tokyo from time to time for various reasons, and I'd heard a lot of stories about this lady. Fact is, you didn't have to be Japanese to know that Akira Mori was easily Japan's most listened-to money analyst. You've probably seen her yourself in snippets of that weekly chat show she had on NHK, which used to get picked up by the networks here when they needed a quick thirty seconds on "Japan This Week" or such. Her ratings had little to do with the fact she's a looker. She was, talk had it, an unofficial source for official government monetary policy. Akira Mori always had a lead on exactly what was afoot, from the Bank of Japan to the Ministry of Finance, even before the prime minister broke the news.

Miss "Mori," whoever the hell she was, had some very well placed friends. Tell you something else, she didn't go out of her way to find flattering things to say about how Uncle Sam handled his bankbook these days. Her appearance here made Noda's unorthodox office plans even more perplexing.

"We both appreciate your taking time from your schedule to meet with us." He bowed again. "We've been looking forward to having you join us at the sale."

While Akira Mori appeared to busy herself with a catalog, Noda and I got things going with that standard formality preceding any serious Japanese professional contact: meaningless chat. It's how they set up their ningen kankei, their relationship with the other guy, and it's also the way they fine-tune their honne, their gut feeling about a situation. Any greenhorn foreigner who skimps on these vital niceties runs the risk of torpedoing his whole deal.

In response to my pro forma inquiries, Matsuo Noda declared he liked New York, had even lived here for a while once, honestly found it less hectic than Tokyo, usually stayed these days at the Japanese hotel down on Park but sometimes picked the Plaza when he needed to be closer to midtown. He adored La Grenouille and thought La Tulipe overpraised. When I pressed him, he declared his favorite Japanese place to dine was Nippon, over in the East Fifties (maybe he merely liked the name, but it was my pick as well).

After he had in turn solicited my own views on Sotheby's, a couple of the galleries down Madison, and various North Italian eateries, he suggested we go on upstairs and preview the lots.

All the while Miss Mori appeared to ignore us, standing there like a statue of some Shinto goddess, except for the occasional tug at her dark hair. Maybe she didn't give a damn about this obligatory small talk, thought it was old-fashioned. Or possibly she liked the idea of being the only one not to show a hand. And as Noda led the way up toward the exhibition rooms, she trailed behind like a dutiful Japanese woman—while we, naturally, continued to talk of everything except, God forbid, why we were there.

In the first room we were suddenly in my arena—samurai swords and battle gear.

"This is your special interest, is it not, Mr. Walton?" Noda smiled, then turned to admire the row of shining steel tachi, three-foot-long razors, now being watched over by a trio of nervous guards. Sotheby's didn't need some amateur Toshiro Mifune accidentally carving up the clientele. "I understand you have a notable collection yourself."

What? What else did he know about me?

Easy, Walton. Play the game. I knew what a Japanese would expect in reply.

"Matter of fact, I've lucked onto a couple of items over the years." Then the standard disclaimers. My own painstaking collection was merely a grab bag of knickknacks, the fumbling mistakes of a dabbler, etc., etc.

Noda monitored this culturally correct blarney with satisfaction. "As it happens, Mr. Walton, I was in Nagoya last year when several of your pieces were on loan for the show at the Tokugawa Museum. I still recall certain ones, particularly that fine fifteenth-century katana, attributed to the Mizuno clan. Unusual steel. No date or mark of the swordsmith, but a remarkable piece all the same." A split-second pause. "Your reluctance to part with it was most understandable."

This man had done his homework! Or maybe he'd been the one who had tried to buy it. The steel was unusual, too heavy on copper. I'd even had a little metallurgical testing done on it down at Princeton, just to prove that hunch. But it was no big

deal, merely an oddity that had fallen my way via an estate sale. There was an anonymous inquiry shortly after the exhibition opened, with an insistent offer, but I'd turned it down.

Poker time. "I was honored. Your figure was more than generous."

He laughed—bull's-eye. I watched as he glanced back at Miss Mori, maybe a bit nervously. Then he returned his attention. "Merely a small gesture for the museum. I felt it should be back in Japanese hands." He continued, his voice now sober. "You do understand?"

"Certainly." I just stared.

"Good. I see I was right." He had paused to examine a large monochrome screen. It was eighteenth century and he inspected it with only mild interest, then moved on.

I was still knocked over. Could that be why he'd retained me as his U.S. legal counsel? Because of some damned antique sword? Okay, I was already getting the idea Matsuo Noda might be a trifle eccentric, but all the same . . .

"Interesting." He was pointing at a long picture, part of a series locked in a wide glass case. "Honto ni omoshiroi, desu ne?'

Miss Mori was already there. In a voice scarcely above a whisper she proceeded to give him a rundown of pros and cons. It was the first time I'd noticed any enthusiasm out of the woman all night.

I checked my catalogue. The piece was a Heian hand scroll, said to be "exceedingly rare." After a few moments Noda motioned me over. "Perhaps you could give us your opinion. What do you think?" He pointed down. "The subject is intriguing. These are ladies-in-waiting for the emperor, Fujiwara. Notice the delicate refinement of the coloring, the matched fabrics, each enhancing the other like flowers in a bouquet. That was eight centuries ago, just before the rise of the first shogun, the first 'generalissimo' who would rule in the emperor's name."

When he said "shogun," niece Mori shot him a quick admonitory glance. There was some kind of unmistakable electricity passing. Something left unspoken.

"The Heian era ended with the great conflict between the Heike and Genji clans that led to the death of the ruling emperor in 1185 and the loss of the imperial sword at sea." Next he said something in guttural Japanese to Mori, obviously very intent, and indicated one corner of the painting, where the emperor sat. Her reply was quick and curt. Now, I only know a little of the language, maybe a couple of cuts above Berlitz level, but I did manage to pick up she wasn't talking about the painting. Something to do with the emperor himself, though I missed the rapid-fire delivery.

In response to Noda's question I tried to sound intelligent, saying the ink coloring looked well preserved, or some such auction house mumbo jumbo. It wasn't my thing really, which the man surely knew. He seemed to know everything else about me. After he listened politely, they switched back to Japanese and finally settled on a bid. I watched as she marked it in the catalogue—low six figures.

Walton, I thought, you're dealing with a pair of heavyweights.

By then I'd decided not to bother bidding on anything. There were too many curious twists, not to mention the building deal. Surely the ritual had gone far enough, the samurai negotiating ploy of making your adversary be first to reveal his game plan.

Why not bring up why we were there, just for the hell of it?

When I did, Noda betrayed a fleeting smile. "But of course, the building." He made it sound like some kind of trivial annoyance, a nuisance to get out of the way so we could all get back to the serious work of admiring the pretty pictures.

Touche, I thought. Round one to Noda, on points. "I assume you've had a look at the package of materials I messengered up to your hotel yesterday?"

A broker friend had put together some listings for office buildings around midtown—it turned out the market was softening a touch due to the latest construction binge—and I'd hoped that maybe something would catch Noda's eye. Matter of fact, there were a couple of real bargains over near Sixth.

"My people have examined it in detail. We would like to move forward on the twenty-story building on Third Avenue."

For a second I thought he was joking. Sure we'd tossed in the write-up, because it fit his profile, but it was a crazy all- cash deal, and they wanted ninety million, firm.

"Did you read the terms on that one? It's all—"

"There is a vacant floor, is there not? Available immediately?"

"Well, yes, but—"

"There may be a few items to clarify—we would like your legal opinion concerning the leases of the existing tenants—but nothing major. If the seller is prepared, I think we could even go to contract early next week, while I'm here. I would like very much to close as soon as possible. If some of my staff can meet with the seller's attorneys over the weekend, perhaps we can start work."

Over the weekend? No counter bid, no haggling? Now, you didn't have to be a brain surgeon to realize this was a fast-track deal; Matsuo Noda was a man in a hurry. "Looks like you just may have yourself a piece of property. I'll try and get hold of them in the morning, if I can, and start the ball rolling."

"Excellent." He hesitated a moment, as though framing his words, then continued, "But in fact, Mr. Walton, we'd actually wanted to meet you tonight for an entirely different purpose. I'd hoped we might be working together on, well, some additional matters."

"Something else?"

"As you might surmise, we are not enlarging our presence here to no purpose. Tonight I wanted to tell you something about the objectives of Nippon, Inc. And then let you decide if what we propose merits your participation. Your financial expertise could make you a great asset to us."

Hang on, I thought. This thing is starting to go a little fast.

"What do you have in mind?"

"First let me say you are a man I have long admired. Your style is not unlike my own. We both understand the importance of moving cautiously, of keeping our adversaries off guard. Most of all, there is a rigorous discipline about your work. That is the style of bushido, the way of the warrior." He smiled, and his tone lightened. "I think we could cooperate very effectively."

Already I was wondering whether I really wanted to "cooperate" any further with Matsuo Noda. Something about the man, and Miss Mori, made me very nervous. Besides, I was trying to finish off work now, not begin more. But he'd found out the one line that would keep me listening. He'd somehow discovered I was a deep admirer of the old-time military strategists of the East—such as Sun Tzu and Miyamoto Musashi.

Like a hostile takeover bid, the ancient Japanese way of

combat was ritualized, as mounted warriors rode out, announced their lineage (to the SEC?), then matched up with men of equal renown. The samurai prized flexibility over brute strength; they had steel swords that handled like scalpels and body armor that was a woven mesh of lacquered-iron scales laced together in rows to create a "fabric" of metal. Those weapons and armor made for agile movement, easy feints, fast changes in strategy—all trademarks of mine on the corporate takeover battlefield.

As a result, I fancied myself some kind of samurai too. . . .

The question was, how did Noda know this?

For some reason just then I glanced over toward Akira Mori. She appeared to be studying a scroll with the detachment of a Zen monk in zazen meditation, but she wasn't missing a syllable.

"Care to run through whatever it is you have in mind?" I indicated one of the ottomans along the side of the room, now clearing as bidders rose to go inside. I watched as the dark- suited Japanese businessmen filed past, none with Noda's sense of style, and noticed that several seemed acquainted with him, pausing to offer obsequious bows.

"With pleasure." He settled himself. Mori, now looking over some screens, still didn't elect to join us. "First, may I presume you already know something of Nippon, Inc.?"

"No more than what I gleaned from that package you forwarded. Almost nothing, really."

He laughed, a flash of even teeth. "Perhaps I should be pleased. These days too much visibility in the U.S. can sometimes stir up 'friction’."

"Your prospectus indicated you help banks manage capital, so I assume you're looking to enter the financial picture here."

That was the funny part, recall? There was no indication of any U.S. action in his prospectus. Yet I knew that, overall, Japan's U.S. investment, private and public, was in the tens and hundreds of billions. Pension funds and industries were building factories, financing corporations, snapping up Treasury paper. Japan had become a major source of fresh money for the U.S. and for the world. But Nippon, Inc. wasn't one of the players.

"Yes, we intend to be concerned, initially, with the position of Japanese capital in the U.S. We are particularly interested in the matter of Treasury debentures."

That was what anybody would have figured. Just that week the Journal had noted that Japanese investors were expected to cover half of our Treasury overdrafts for the year. They were advancing us the bucks to keep up that spending spree known as the national deficit. They sold us Toyotas; we sold them federal IOUs, using the proceeds to buy more Toyotas. In effect they were financing the good life, supplying us the "revolving credit" to buy their cars and DVDs and semiconductors.

"Treasuries always make a lot of sense." I picked up the thread. "Full faith and credit of the U.S. government, all the rest."

"Quite so, Mr. Walton, but since all things are theoretically possible, over the past few months I've undertaken a small program through subsidiaries of Nippon, Inc. to begin cushioning Japan's exposure in your Treasury market somewhat." He paused. "Now that my effort may be expanding significantly, I was wondering if perhaps you might consent to serve as our American agent in that endeavor."

For a second I didn't grasp what he was driving at, probably because my involvement seemed totally unnecessary. Surely he realized Treasuries were bought and sold here every day on the open market through dealer banks? No big deal. Why bother hiring a middleman?

"I can make this quick. Why don't you just contact some of the authorized Japanese brokers here in New York? You must have used them before. Nomura Securities is well respected. There's also Nikko Securities. And Daiwa Securities America. They're all primary dealers in Treasury paper now. Buy or sell whatever you like."

Noda nodded. "Of course. But we both know the financial markets can be very delicate. Impressions count for much, which is why I have chosen to keep a low profile. Consequently, I would prefer to continue to operate for a time outside normal channels. And in that regard, I now believe it would be desirable to have an experienced American financial specialist assist us. You, in particular, would be ideal."

I studied him. "Let me make sure I understand this. You're asking me to step in and begin fronting for you here in the Treasury market?"

"That is correct, Mr. Walton." He rose and strolled over to the row of tachi swords, where Miss Mori was still standing. They were lying on a spread of dark velvet, and she was scrutinizing them with a connoisseur's eye.

Now, I'd like to think I was a quick study of a situation, but this one was definitely out of whack somehow. If all Noda wanted was to roll over a little government paper, why the hush-hush? More to the point, why a whole building in midtown? He could easily do it from Tokyo. The scenario didn't compute.

"Before this conversation goes any further, I'd like a better idea of the kind of activity you're talking about. Selling Treasuries? Moving the funds into corporate bonds or munis? Commercial paper, equities."

"Sell?" He abruptly paused to watch as the staff began carefully assembling the weapons to take inside for the sale, and his mind seemed to wander. "You know, Mr. Walton, the sword always has held the greatest fascination for me. To make one of these, layers of steel of different hardnesses were hammered together like a sandwich, then reheated, hammered out, folded, again and again, until there were perhaps a million paper-thin layers." He pointed to one of the long blades now glistening in the light. "You cannot see it, of course, but they used a laminate of soft steel for the core, harder grades for the cutting edge. And whereas the edge was tempered quickly to preserve its sharpness, the core was made to cool very slowly, leaving it pliant." He suddenly smiled with what seemed embarrassment and turned back. "I take great inspiration from the sword, Mr. Walton. The man holding one must learn to meld with the spirit in the steel. He must become like it. What better than to meet the world with your hardest surface, yet maintain an inner flexibility, able to bend to circumstance as the need may arise?"

He stood a moment as though lost in some reverie then chuckled. "Sometimes I do tend to go on and on. I believe it was selling you asked about. The fact is you would not be actually selling Treasury obligations."

"Then what . . . ?"

"Are you familiar with interest-rate futures?"

"Of course." The question was so unexpected I answered almost before I thought. Futures contracts were part of the big new game on Wall Street, although most of the action was still out in Chicago, places like the Merc and the Board of Trade, left over from the old days when farmers sold their crops in advance at an agreed-upon price. The farmer "sold" his grain harvest to a speculator while it was still nothing but green sprouts. He was worried the price might drop before he got it to market; the speculator was praying it would head up. The farmer, interestingly, was selling something he didn't yet have. But even if the price of wheat suddenly tanked, he was covered.

These days futures contracts were traded for all kinds of things whose value might change with time. High on that list were financial instruments such as Treasury notes and bonds, whose resale worth could drop if interest rates unexpectedly rose. If you owned a bond and were worried it might go down in value, you could hedge your exposure with a futures contract, in effect "selling" it in advance at the current price and letting somebody else assume the risk of future market uncertainty.

Modern finance being the marvel it is, you could even sell bonds you didn't own, just like the farmer's nonexistent grain. The Wall Street crowd called this a "naked" contract, since you were obligated to go out and acquire that bond in the open market on the day you'd agreed to deliver it, even if the price had skyrocketed in the meantime. Or you had to try and buy back the contract. Of course, you were betting that price would go down, letting you pocket the difference.

Pious spirits on the futures exchanges called these deals high finance and risk hedging. They operated, however, remarkably like legalized gambling. Dabbling in interest-rate futures was not for those with a dicey heart.

"Our objective," Noda went on, "is to cushion Japan's exposure somewhat."

"With futures contracts?"

"Precisely. U.S. Treasury obligations are held by a variety of investors in Japan, but up until now we have made very little use of the protection possible in your futures markets. Nippon, Inc. will concern itself with that."

I listened thoughtfully. "So you're saying you want to create an insurance program for Japanese investors in case the price of Treasuries weakens?"

It made sense. If interest rates went up here, reducing the value of their government paper, then the price of his futures contracts would rise to offset the loss.

I glanced over at Japan's monetary guru, Akira Mori, who

was carefully examining her bronze fingernails. Was she the one behind all this sudden nervousness about America's financial health? What could these two know that we didn't, I wondered. It was all a bit mysterious.

One thing was no mystery, though. Whatever was going on with Matsuo Noda and Akira Mori gave me a very unsettled feeling.

"I'm flattered." I looked him over. "But afraid I'll have to pass. This fall I plan to take off for a while and . . . catch up on some personal matters that—"

"Mr. Walton," he cut in. "I would urge you not to lightly dismiss my proposal." He was staring back at me intensely. "I can only say for now that issues are involved . . . well, they encompass matters of grave international consequence." Another pause, followed by a noticeable hardening of tone. "Your other obligations cannot possibly be as important. It would be in your best interest to hear me out."

Want the truth? At that moment all my negative vibes about Matsuo Noda crystallized. He wasn't threatening me exactly. Or maybe he was. The large viewing room was all but empty now. Maybe he'd deliberately waited before getting down to his real agenda.

"My other 'obligations' happen to be very important to me just now."

"Then please consider rearranging them."

"Besides, my fees can be substantial." They weren't all that substantial, but I was looking to slow him down.

"Your fees do not present a problem." He continued, "This afternoon a retainer of one hundred thousand dollars was deposited in your personal account at Chase."

"What in hell . . .!"

"Money is of no consequence in this matter, Mr. Walton. Time is."

"You seem awfully sure I'll agree."

"We expect your involvement to begin immediately. I cannot stress too strongly the urgency of what you will undertake." He smiled thinly. "I also feel confident a man who enjoys a challenge as much as you do will find our undertaking . . . intellectually rewarding."

Seems I was hired and I hadn't even said yes.

This guy had another think coming. Besides, he could get anybody to do what he wanted. He didn't need me. As I stood

there, I started trying to guess the dimensions of Matsuo Noda's financial hedge. Taken all together, Japan probably had roughly a hundred billion and change tied up in U.S. government paper. No way could he be thinking of covering more than a fraction of that. I knew plenty of law clerks who could do it, for godsake. A few phone calls to a couple of floor traders in Chicago . . .

"Look, the most I can do for you is recommend some very competent brokers I know to help you out. There shouldn't be too much to it. You'll just have to go easy. You can't hit the market makers in Chicago with too much action all at once. Prices get out of kilter. Then, too, there are exchange limits. . . ."

"That is why we will be trading worldwide." Noda withdrew a folded sheet of paper from his breast pocket. "Perhaps you'd like to glance over our program. These are cumulative totals, which include our activity to date, but we will begin moving much more rapidly as soon as I've completed all the financial arrangements with our institutional managers at home. Perhaps you will see why we need a monetary professional."

I was still chewing on the "financial arrangements" part as I took the paper, opened it, and scanned the schedule of contracts. While I stood there, the room around us sort of blurred out. I had to sit down again. All his talk about samurai and nerves of steel was for real.

Matsuo Noda had a program underway to sell futures on a pile of U.S. Treasury bills, notes, and bonds he didn't own, "naked," in an amount I had trouble grasping. I knew one thing, though: if interest rates headed down, raising the value of those presold obligations, he'd be forced to cover awesome losses. He'd be in a financial pickle that would make Brazil look flush. On the other hand, if some disaster occurred and U.S. interest rates suddenly shot sky high . . .

Numbers? The CBOT's long-interest contracts, notes and bonds, are in denominations of a hundred thousand each; the Merc's short paper, bills and CDs, are in units of a million per. Finally I did some quick arithmetic and toted up the zeros. Something had to be wrong here. Nobody had balls that big. I decided to run through the figures again, just to be sure.

It was along about then that I realized all Noda's pious talk about sheltering Japanese widows and orphans had been purest bullshit. Resting there in my hand was the biggest wager slip in world history. Assuming enough players could be found worldwide to take his action, he was planning to advance-sell U.S. Treasury IOUs in the amount of five hundred billion dollars. A full quarter of our national debt.

His bet: something or somebody was about to push America over the brink.

[CHAPTER TWO]

"Yo, counselor. Get thy butt over here and buy me a drink."

I was standing in the smoky entry of Martell’s, on the way back downtown from Sotheby's, when I heard the voice, a Georgia drawl known from Wall Street to Washington. And sure enough, leaning against the long mahogany bar, the usual Glenfiddich on the rocks in hand, was none other than Bill Henderson.

Long time, no see. I'd actually stopped by for a little ninety proof nerve medicine myself, not to pass the time with America's foremost cowboy market-player. But the idea of bringing in a Wall Street pro was most welcome. If anybody could dissect Noda's game, Bill was the man.

What was I going to do? I'd stalled on giving Matsuo Noda a final answer, telling him I needed time to think. Then just to make sure the whole thing hadn't been some sort of macabre hoax, I'd checked at a Chase bank machine on Lex. He hadn't been kidding. A retainer had been deposited all right, presumably by certified check, since it had already cleared. I was on the payroll, ready or not.

Noda was right about one thing. What he planned to do had grave international consequences. The problem was, his game had just one payoff. The way I figured it, he won if, and only if, the U.S. suddenly went broke. As international consequences go, that seemed reasonably grave.

Henderson was the perfect guru to take apart the scenario. Assuming he was sober. Tell the truth, at first glance I wasn't entirely sure. The guy looked a mess. I assumed he was holding some sort of private celebration, or maybe it was a wake. What was the occasion?

"William H., welcome back to town. Thought you'd decamped permanently down to D.C."

"Packed it in. Back to start making a living again. Could be I've just set some kind of new world record for the briefest tenure ever seen on the Council." He eased over to make room, while the jukebox began some Bobby Short standard about incomparable NY. "So where's your TV star tonight? Sure love that gal." He toasted Donna's memory. "If tits were brains, she'd be a genius."

Sexist? Tasteless? That was merely Henderson warming up.

I hadn't actually set eyes on Bill since an ill-fated birthday dinner Donna had thrown for him in midsummer, a favor to a producer friend of hers at the station who'd wanted to try vamping a real live millionaire. That evening he'd arrived with a serious head start on the whiskey, his meditation on the concept of birthdays, and then proceeded to regale those assembled with his encyclopedic repertoire of farmer's-daughter and traveling-salesman vignettes. In the aftermath, Donna swore she'd kill him if he ever set foot in her place again. When I made the mistake of speaking in his defense, she critiqued a few of my character defects as well, then added me to the list.

"Friend, no small thanks to you and that sordid evening, I haven't seen Donna since."

"That was a dark moment in my history. After listening half the night to that air-head producer she put next to me, I was in mourning for the hearts and minds of America." He revolved back to the bar. "What're you drinking?"

"Something serious." I pointed toward the single malt. Laphroaig neat.

Just then Bill paused to watch as two women in bulky raincoats brushed past. They receded toward the other end of the bar, settled their coats across an empty stool, and ordered drinks. One was a youngish blonde, a bit nervous, having some tall, colored potion that looked as if it could use a cut of pineapple and a plastic monkey on the glass. But the other one, brunette, was a different story. Pained eyes, with a psychic armor that could only be called battle-weary New York. Joanna, all over again. Tanqueray martini. Straight up.

"Hot damn, sure is good to be back in this town." He was trying, without conspicuous success, to catch the younger woman's eye.

"Henderson, you're standing next to a man with some news that could well alarm you considerably."

"Like maybe this dump might run low on booze?"

"Not likely." I reached for my new drink. "I've got to make a decision, fast. So try to keep a clear head and see if you can help me out."

In my estimation Henderson was a phenomenon—sober or loaded. He'd emerged from the red clay hills somewhere in north Georgia, former football All-State ("I only did it for the pussy"), and ended up at Yale Law—where we shared an apartment for three whole years. By the time we'd finished our degrees, I figured I was ready to tackle real life, but Bill had hung in and gone for a Ph.D. in economics. Although his athlete's physique hadn't survived Yale—an early casualty of the single malt and the Dunhills—Henderson still had the delusion he was twenty-five. Easter before last he'd arrived at my place down in the islands with some leggy print model half his age and a case of Jack Daniel's Black. Did the redneck routine bamboozle the cautious hearts of his admiring ladies? Probably. Right under the radar.

All that notwithstanding, it was a commonly accepted fact that Bill was the sharpest private currency-trader on the East Coast. If tomorrow the dollar was about to dive, the guy who'd already sold it short tonight from Hong Kong to Zurich was invariably Henderson. That part of his life had been all over the papers the previous spring, after he got tapped for the President's Council of Economic Advisers. I guess some genius on the White House staff—urged on by that wily senator from New York, our mutual friend Jack O'Donnell—concluded the Council needed a pet "contrarian" on board for appearances, and Henderson looked to be a sufficiently pro-business prospect. Wrong. After a couple of interviews he was forbidden to make any more public statements. He'd failed to grasp that the national interest required fantasy forecasts just before elections. Bill may have been a master of subtlety when he was trading, but otherwise he tended to call a spade a spade, or worse.

"What's up?" He was about to punt with the blonde after one last try.

"Maybe you'd better go first." I took a sip, savoring the peaty aroma. Let Henderson decompress in his own good time, then sound him out on Noda's chilling proposition. "What are you doing here?"

"Call it modesty and discretion." He turned back.

These were not, as you might infer, the first descriptors that leapt to mind whenever I thought of Bill.

"Care to expand?"

He slid his hand across the bar, extracted another Dunhill from its red pack, and launched a disjointed monologue starting with the goddam traffic in D.C., then proceeding to ditto coming in from LaGuardia.

All this time his cigarette had been poised in readiness. Finally he flicked a sterling silver lighter, the old-fashioned kind, and watched the orange flame glisten off the mirror at our right. "So, old buddy, that's it. All the news that's fit to print. History will record this as the moment yours truly bailed out. I figure it like this. If I can't read the signals myself these days, what in hell am I doing giving advice? Time to hit the silk. Get back to making a living. Don't know how long this circus is going to last, but I figure we'd all better be saddled up and ready to ride, just in case."

As it happens, self-proclaimed ignorance was a crucial ingredient in Henderson's deliberate "country boy" camouflage, designed to disarm the city slickers. I estimated the professional dirt farmer next to me, Armani double-breasted and gold Piaget timepiece, was now worth about forty million, including a chunk of an offshore bank. Yet for it all, he still liked to come across as though he'd just moseyed in and wished somebody would help him through all this fine print.

"Don't bullshit me, Bill." I toyed with my drink. "What you're really saying is you couldn't get anybody else to agree with you."

"Have to admit there were a few trifling differences of opinion about the direction things are headed." He positioned his Dunhill in the ashtray and washed his throat with more Scotch. "You can't cover up the fundamentals with cosmetics. Things like a megabillion trade shortfall, a debt nobody can even count, and a dollar that don't know whether to fish or cut bait. Worst of all, we're still selling the suckers of the world more funny-colored paper than czarist Russia did. There ain't no quick fix for this one." He took another sip, then turned back. "But fuck it. Remember that old saying I used to have about being a lover, not a fighter. I always know when it's time to call in the huntin' dogs and piss on the fire. I'm back in town to stay. I got hold of my boys and they're coming in tomorrow to start getting everything out of mothballs. We're going back on-line."

As anybody who knew Bill was aware, he'd installed a massive computer bank in the converted "maid's quarters" of his Fifth Avenue apartment, hooked to the major futures exchanges and financial markets around the world. Running his operation on a moment-to-moment basis were a couple of young fireballs, his "Georgia Mafia," who did nothing but watch green numbers blink on a CRT screen and buy and sell all day. He and his boys talked a language that had very little to do with English—jargon about comparing the "implied volatility" of options on this currency against the "theoretical volatility" for that one, etc. On any given day they were placing "straddles" on yen options, "butterfly spreads" on pound sterling futures, "reverse option hedges" on deutsche marks, and on and on. Half the time, Einstein couldn't have tracked what they were doing. Add to that, they leveraged the whole thing with breathtaking margins. To stay alive in Henderson's game, you had to be part oracle, part Jimmy the Greek. You also had to have ice water in your veins. It wasn't money to him, it was a video game where the points just happened to have dollar signs in front. The day I dropped in to watch, he was down two million by lunch, after which we casually strolled over to some shit-kicker place on Third Avenue for barbecued ribs and a beer, came back at three, and by happy-hour time he was ahead half a million. In the trade Henderson was part of the breed known as a shooter. Up a million here, down a million there—just your typical day in the salt mines. A week of that and I'd have had an ulcer the size of the San Andreas fault.

He liked to characterize his little trading operation as "a sideline to cover the rent." I happened to know what it really paid was the incidental costs of a lot of expensive ladies. Could be Bill's entertainment fund was in need of a transfusion.

"Back to business?" I asked. "Like the good old days?"

"Bright and early Monday morning. Got a strong hunch the

Ruskies'll be in the market buying dollars to cover their September shorts on Australian wheat futures. Might as well bid up the greenback and make the comrades work for their daily bread. Then round about eleven, I figure to unwind that and go long sterling, just before London central figures out what's happening, shits a brick, and has to hit the market for a few hundred million pounds to steady the boat."

Well, I thought, Henderson the Fearless hasn't lost his touch.

"Bill, I want to run a small scenario by you." I sipped at my drink. "Say somebody'd just told you he was taking a massive position in interest-rate futures? What would that suggest?"

"Tells me the man's getting nervous. If he was holding a lot of Treasury paper, for instance, he'd probably figured rates were about to head up and he didn't want to get creamed. See, if you're holding a bond that pays, say, eight percent, and all of a sudden interest rates scoot up to ten, the resale value of that instrument is gonna go down the sewer. But if you've already 'sold' it using a futures contract, whoever bought that contract is the one who's got to eat the loss. You're covered."

"I'm not talking about standard hedging." I was wondering how to approach the specifics. "Say somebody started selling a load of bond futures naked. Nothing underlying."

"Well, thing about that is, the man'd be taking one hell of a risk." He swirled the cubes in his glass. "Anybody does that's bettin' big on something we don't even want to think about. Some kind of panic that'd cause folks to start dumping American debt paper."

I just stood there in silence, examining my glass. That was precisely my reading of Matsuo Noda's move. "But I can't think of any reason why anything like that's in the cards, can you?"

"You tell me. It's hard to imagine. The economy's like a supertanker. Takes it a long time to turn around. But if you want a special Henderson shit-hits-the-fan scenario, then I can give it a shot. Say, for instance, some Monday morning a bunch of those hardworking folks around the world who've been emptying their piggy banks to finance our deficit suddenly up and decided they'd like their money shipped back home. That'd create what's known as a liquidity crisis, which is a fancy way of saying you don't have enough loose quarters in the cookie jar that morning to pay the milkman and the paperboy both. The Federal Reserve would have to jack up interest rates fast to attract some cash. Else roll the printing presses. Or of course"—he grinned—"we could just default, declare bankruptcy, and tell the world to go fuck itself."

"Nobody would possibly let it go that far, right?" I toyed with my Scotch. "Particularly Japan. We owe them more money than anybody."

"Wouldn't look for it to happen. Remember though, right now the U.S. Treasury's out there with a tin cup begging the money to cover its interest payments. If the national debt was on MasterCharge, they'd take back our card. So let some of those Japanese pension funds who're shoveling in money start getting edgy, or the dollar all of a sudden look weak, and you could have a run on the greenback that'd make the bank lines in '29 look like Christmas Club week."

"That's thinking the unthinkable."

"Damned well better be. But don't ever forget, paper money is an act of faith, and we're in uncharted territory here. Never before has the world's reserve currency, the one everybody uses to buy oil and grain and what have you, belonged to its biggest debtor nation. We're bankers for the world and we're ass over elbow in hock. Everybody starts gettin' nervous the same day, and the bankers on this planet could be back to swapping shells and colored beads."

"Offhand I'd say that's pretty implausible."

"And I agree. The system got a pretty good shakeout in the October Massacre of '87 and things held together, if just barely. Stocks crashed but the dollar and the debt markets weathered the storm. Nobody dumped. Japan doesn't want its prime customer to go belly up. Who else is gonna buy all that shiny crap?"

I studied my glass again. If Henderson, who had pulse- feelers around the globe, wasn't worried, then maybe Matsuo Noda was just a nervous, spaced-out old guy. A loony-tune with an itch to gamble. Funny, though, he appeared the very essence of a coolheaded banker.

About then, the two women across the bar waved for their check and began rummaging their purses. Sadly enough, the brunette had done everything but send over an engraved invitation for us to join them. She and I had looked each other over, and we both knew what we saw. The walking wounded.

It made me pensive. More and more lately I'd begun to wonder about the roads not taken, the options that never were. What if all our lives had started out differently? Where would you be? Where would I be—playing lawyer now, or maybe driving a cab? It was the kind of woolgathering that drove Donna Austen insane.

It was on my mind that first afternoon I met her, when she brought her sound guy down to record some "voice-overs" to use with shots of the house. She made the mistake of asking for a little background, so I decided to go way back and give her the big picture. It turned out to be a little kinky for the six- o'clock news.

I suited the tale by telling her about my father, once a rig foreman in the oil patch out around Midland, Texas. I was still a kid when he started tinkering around weekends with drill bits out in his shop, and I was no more than about ten when he came up with a new kind of tip. Turned out it could double the life expectancy of a bit, not to mention the life expectancy of a lot of roughnecks who had to change them every few hours. He patented the thing, and next thing you knew, he was "president" of Permian Basin Petroleum.

"Your father was a successful inventor?" She'd set her Tab down on the living room table and perked up. Here was some "color" for her profile.

"More than that. The man was a believing capitalist." Was she really going to understand the significance of what happened? "You see, since no banker would risk loaning out venture capital back in those days, he had to take PBP public. He needed money so badly he sold off sixty percent of the company."

"Like those entrepreneurs who created home computers in their garage?" She brushed at her carefully groomed auburn hair. Maybe here was her hook, the grabber.

"Close. He took the money, several million, and started production. And guess what? The bit he'd invented was too good. Next thing you know, another outfit that will remain nameless here came along and infringed on the patent, saying 'sue us'—which he began trying to do. But since they were already tooled up to manufacture, they undercut his prices and drove PBP's stock down to zip. Then came the kill. They staged a hostile takeover and—since PBP now owned the patents, not him—axed the lawsuit. Bye, bye, company."

"How does this story relate to what you do today?" She was checking her watch, no longer overly engaged.

"Well, by the time all this happened, I was off studying engineering at the University of Texas. But when I graduated, I decided to do something else. I headed for Yale Law."

"If you can't lick 'em, join 'em? Something like that, Mr. Walton?"

"Not exactly, Ms. Austen. I wanted to find out if the Bible's right: that guys who live by the sword better be ready to die by the sword. After the sheepskin, I shopped around and found the Manhattan law firm that handled the biggest oil-field-service outfit in the country, then applied to that firm's corporate department. A couple of years and a lot of memos later, our oil-field client somehow got the idea they ought to go vertical, acquire their own source of equipment. Next I ran some numbers and showed them how profitable it would be to acquire a certain tool company that now owned the patent on a terrific drill bit. Of course, it would require a hostile buyout, but with a little restructuring they could swing it financially."

"And?"

"I worked nights and weekends for six months and personally devised the takeover. By oddest coincidence, when we were through we decided to strip all that company's overpaid executives of their 'golden parachutes' and dump them on the street. My graduation present to the old man."

She rolled her eyes and waved at her sound man to shut off the mike. "Mr. Walton, I think our viewers would be more interested in personal stories."

What did she want, I wondered. This was the most "personal" story I had.

"What do you mean? What I eat for breakfast?"

"I do personalities." She looked around the living room. "Are you married?"

"I was."

On came the tape. But she didn't get what she wanted. Joanna wouldn't appreciate being critiqued on Channel Eight's evening news. And Amy would have killed me. So I just plunged ahead and finished off the other saga.

"There's a bit more to this intimate bio. Guess I'd seen enough quick money in the oil business that I'd forgotten you were supposed to be impressed by it. Or maybe I'd just never mastered the art of kissing my elders' asses convincingly. You'll find, Ms. Austen, that those are two attitudes whose rewards are largely intangible; Wall Street compatibility definitely not being on the list. After five years the Management Committee offered a partnership, but by then I'd decided to go out and try making it on my own. Be my own man."

She waved the sound man off again. "You mean you quit?"

"Couldn't have said it better. I hung up a shingle . . . and started playing the other side of the scrimmage line."

"I understand you've been in quite a few takeover fights."

"Let's say I've fought a lot of takeovers, Ms. Austen. There's a subtle but important distinction."

Donna Austen turned out to be more interested in my marital status than in anecdotes about corporate mayhem. Thing was, beneath all that glitz I found her a challenging woman. Amy, on the other hand, despised her. But then she never likes anybody I bring home. The real problem, however, was that I kept thinking more about Joanna than I did about Donna. As witness this evening, when that sadder-but-wiser brunette headed out the door reminded me of her more than a little. . . .

"Hate to see that young specimen depart without a good-faith offer of condolence." Henderson was wistfully eyeing the young blonde. Definitely his type. "Trouble is, I couldn't locate the equipment tonight with a compass and a search warrant." He hoisted his glass, then turned back and reached for another Dunhill. "So tell me what brings you uptown. Never knew you to venture this far into civilization just to stand a drink for your oldest and wisest confidant."

Back to reality. "William H., you will undoubtedly find this difficult to accept, but I just got asked to front some Treasury action for a new client. Selling futures."

"Where do you find your suckers?" He grinned. “That's never been your game."

"Hey, at least I know the rules. Corporations have been known to hedge their debt offerings, my friend. But what I've done up to now's been strictly bush league compared to this."

"So what's the play?"

"A foreign outfit that wants low profile. And P.S., they're talking substantial numbers."

"What do you mean, 'substantial'?" Suddenly Henderson's input file was on red alert.

"Probably wouldn't impress a high roller like you, Bill." I paused. "Half a trillion dollars."

"Jeezus." He went pale. "Who's putting up the earnest

money for this shot? Let interest rates head the wrong way, you couldn't cover the margin calls on a position that size with the GNP of South America."

"What if it happened to be some of our friends from across the Pacific? An outfit that calls itself Nippon, Inc." I looked at him. "Ever hear of it?"

"Nope." He just stood there, examining his drink as though it suddenly had acquired an enormous insect. "But you've got a surefire knack for really messin' up an evening."

"I guess this is what's meant when people talk about the big time."

"Christ Almighty. Tell you one thing, that's a hell of a number to put on the table. I'd sure like to see those boys' hand."

"Maybe somebody's paying to see ours." I finished off my drink and signaled for another. The more I thought about Matsuo Noda, the more I realized I needed it. "You know, this half scares the crap out of me."

"Matt, old buddy, do yourself a favor. Stand clear. Just back away." He was getting more sober by the second. "You'd be lifting up some kind of big rock when you don't know what's under it. I never do that. Ironclad rule. Same as I always cut losses at ten percent and never let a long position ride over a weekend. And I'll tell you something else. Nobody lays down a bet like that unless he knows the casino's fixed." He paused. "I wonder if maybe we oughtn't to give Jack a call?"

"O'Donnell?"

"Low-key. Just touch base. Inside word is his Finance Committee's going to be holding hearings on foreign investment, maybe in a couple of months. Besides, I know for a fact he owes you a few."

That was true. Senator Jack O'Donnell was headed for reelection headaches. He was America's corporate nightmare— a former professor of labor law at Columbia who'd gone out and bought some tailored suits, shed thirty pounds, dyed his hair, and actually gotten elected to the U.S. Senate. He was despised on Wall Street for good reason. O'Donnell was the Grand Inquisitor of the corporate scene, hauling CEOs in front of his committee every time he sniffed some new scam to shortchange stockholders. Since we saw eye to eye a lot, I'd made it a point to lean on a few of my clients and come up with some campaign bucks for him, telling them it was good "insurance money." Still, if I leaked this to Jack, I'd probably be reading it tomorrow in The Washington Post.

"Henderson, I can't bring him in. Nobody's talking anything illegal. Still, I'm beginning to think I ought to keep an eye on this from the inside."

"Matt, you haven't been listening. Let me pass along a major working principle on how to keep your ass intact in this world. Write it down and tape it to your phone: Staying on the sidelines is a position too. That applies to Wall Street, and it damned sure applies to life." He stretched for a Dunhill, then leaned back. "Ever tell you about that feisty 'coon hound I used to have, redtick I called by the name of Red?"

"Only about a hundred times." Red was his favorite sermon text.

"Well, ol’ Red somehow conceived the idea he was just about the meanest fucker in the county, and he was always out to prove it. Then one night he made the mistake of treeing a big old mama 'coon, up in this little sycamore we had down by the creek. I heard him barking and raising hell and I knew I wouldn't get a wink if I didn't go down and see about it."

"Henderson, Christ, I've already heard this."

"Well, I'm gonna finish it anyhow, by God. Sounds like you could use a refresher course." He took a drink. "Now then, after I made it through the copperheads and briers and got down there, naturally the first thing I did was shine that tree with my light and count the eyes. Turns out that mama raccoon had a bunch of her little ones up there too. So she was in a real disagreeable frame of mind. Her eyes were bright red and I could tell she was thinking she just might eat herself a smartass hound for supper. I tried to explain this to Red, call him off, and get him to come on back up the house, but no, sirree, nothing would do but he had to take her on. So I figured it was time he had a little reality contact. I chunked a couple of rocks, got lucky, and down she tumbled. Next thing ol’ Red knew, he thought he had his ass caught in a brand-new John Deere hay baler. I finally had to kick her off him and get her back up the tree before she really got mad."

"Henderson, I hear you."

"Listen up, friend. There's a moral. You see, ol’ Red didn't have enough expertise that night to know when to stand off. But I'll tell you one thing: he learned real fast. Next time he chased that particular mama up that sycamore, he took one sniff and just trotted right on back to the house." He sipped again. "Every time I come across a tree full of something I don't know about, I remember old Red and just turn around and walk away."

"I'm taking your warning under advisement." I threw down a fifty, glanced at the soundless Mets game on the TV over the bar, and reached for my coat.

"You'd damned well better."

"Henderson, get some sleep. As a friend and colleague, I must in all honesty advise you, you look like absolute hell."

"I've always valued your candor." He waved for another drink. "But I've got some heavy thinking to do."

"Okay, get home safe. Let's keep in touch."

He saluted with his glass. "Tell you what, Matt, maybe I'll just do a little sniffing around myself, see if I can't get a fix on what's up the tree."

"Okay." I was putting on my coat, checking through the window to see if the rain had stopped. Looked like it had. "Let's both sleep on it."

"You do that." He wasn't smiling as I headed out the door.

Henderson, who could slumber like a baby when he was down a million for the day, didn't look like he had much rest ahead that night. For all my brave talk, I didn't either. Now that the rain was over, I wandered over to Fifth to look at the trees sparkling in the streetlights. And to think. If you're from West Texas, you love to see green things wet.

Then I hailed a cab downtown, still with lots of unanswered questions on the subject of Matsuo Noda. What had happened to my country that could make it so vulnerable to the financial shenanigans of a single white-haired foreign banker? Was this what people meant when they talked about the tides of history? Was the free ride over?

Back when I was a kid, I'd accepted as an article of faith that America was the greatest, that we were destined to lead the world forever. Was that hubris? Now I had this sinking feeling we were about to begin learning a little modesty. Maybe Amy didn't know it yet, but her America was going to end up being a lot different from mine. All of a sudden folks all over the world were about to be richer than we were. It was going to take some painful adjustment.

That's when I finally decided. Yes, by God, I would track this one. And when I figured out what Noda had up his sleeve. I'd blow the whistle. Somebody needed to stand guard over this country, and if not me, who?

Matt Walton vs. Matsuo Noda.

As it turned out, the evening still wasn't over. Things continued to go off track, beginning with when I walked in my front door. I guess by now everybody's pretty blase about urban crime, but it's still always a shock when it happens to you. I also think it's getting worse. I can remember five years ago when Joanna and I never bothered even to latch the street windows. These days they have bars—a small precaution following an evening on the town during which everything we owned with an electric cord attached walked out into the bracing Manhattan night. That was my first experience with the hollow feeling in your gut when you realize your sanctum has been plundered. It's not the lost toys, it's the violation that gnaws at your karma.

This time, though, it appeared to be minor. No forcible entry. Somebody had actually picked the front-door lock, a fact I only established to my satisfaction after every other possibility had been considered and dismissed. Truthfully, I probably wouldn't have noticed anything at all that night if not for a wayward train of thought on the way home.

I'd been meditating on a particular sword in my collection, a katana, which was totally without distinction except for a little oral history. Reportedly the blade once tasted blood in a rather arcane episode. Noda probably would have approved. The story was, the samurai who'd commissioned it decided he liked it so much he didn't want the swordsmith telling anybody how he'd forged it. So after he'd thanked the guy graciously, deep bows and all the rest, he picked up the sword, bowed one more time, and then hauled back and sliced him in half, clean as a whistle. The kesa stroke, left collarbone straight through the right hip. It's said a samurai could do things such as that in the old days.

My meeting with Noda had made me want to look it over, to refresh my memory concerning that Japanese capacity for the unexpected. So after I let myself in through the front foyer, I tossed my raincoat over a banister, headed down to the kitchen to pour myself a nightcap, and proceeded upstairs to the "office."

I clicked on the light and then . . .

Jesus! The place had been trashed. Drawers open, files

tipped over, piles of paper askew. After the first numbing shock, that perception-delay your senses impose before you can actually accept what you're seeing, I quickly started taking inventory. Okay, what did they get this time?

Well, the computer and printer were both intact, cordless phone was there still, the little nine-inch Sony in the corner was untouched. . . . Hey, could it be they hadn't actually lifted anything?

Then I remembered why I'd come upstairs. Off to the side, under the back stair, was a big walk-in closet I called my sword room, always kept under lock and key. I glanced over at the door.

Hold on. It was hanging open slightly. I strolled over and checked it more closely. The mechanism had been jimmied, professionally, but with enough force that the metal frame around the door was askew. Not a blatant entry, but a determined one.

My heart skipped a beat. That's why they didn't bother with TVs. These guys knew where the real action was, the lightweight, very expensive loot. I opened the door, took a deep breath, and felt for the light.

You could have heard my sigh of relief all the way out in the street. From the looks of it, nothing was missing here either.

Be sure now. I quickly glanced down the racks, mentally cataloging the pieces. Everything had a place, and all the places were still full. Strange. This stuff was worth thousands. Burglars break in to steal. So what happened? Maybe something scared them off. My sheepdog Benjamin, the fearless terror of the streets? He was now snoring at the foot of the stairs, but who knows . . .

Walton, you lucky stiff, this could have been a major hit. I cursed at the thought of having to have the door and lock repaired, made a mental note to remember to call the locksmith over by Sheridan Square in the morning, and pushed the damaged door closed.

What a hell of a night. I pulled the Sotheby's catalogue out of my pocket, recalling the auction that had inaugurated this fateful evening, and turned to chuck it in the file cabinet where I kept all the records for my hobby: prices, news clippings, correspondence, the rest.

The cabinet, one of those cheap tin jobs you buy at discount office-supply places, was slightly askew. What's this? I yanked open the top drawer and saw chaos.

Uh, oh. I went down the row, checking. Tell you one thing, my intruders had been thorough. Every drawer was a mess, just like the office. Then I got to the bottom, the one with backup data on the collection. Appraisals, provenance of the pieces, that kind of thing.

It was empty.

But of course! Any pro would know that half the value of a collection such as this would be in all the documentation. Which meant my methodical thieves were no dummies; they'd started with the paperwork, the valuations and authenticity info . . . which meant they weren't through. I must have interrupted their . . .

My God! They could still be here.

I edged for the phone and punched 911, the police emergency number. Next I went back and pulled down a sword, just for protection, and swept the empty house. It was all nice and tidy.

Finally New York's men in blue showed, an overweight Irishman and his Puerto Rican partner, both with mustaches. I actually knew them, having once received a ticket for walking Ben off the leash. We went through the formalities, lots of questions with no answers worth writing down, and then they offered to send around a fingerprint squad in the morning. Sure, why not. And you'd better get new locks for this place, Mr. . . . Walton. Right. We all thanked each other and I saw them out.

Then I headed back down to the kitchen. What was this all about? Stealing files? Papers? Those documents, lovingly and painstakingly assembled, were what made the swords somehow uniquely a part of my life. Something that actually wasn't going to decide to take a hike the next week. The stuff had no value to anybody except Matt Walton.

Or so I thought.

CHAPTER THREE

Some people will swear life runs on coincidence. Is it true? If so, here's one for the history books. It's the tale of an old flame. Before my ex-wife Joanna, before my later ill-starred adventure with Donna Austen. The lady's name was Tamara Richardson, and she was a professor at New York University. When I knew her, though, she was merely an assistant prof with a shiny new Ph.D. At any rate, she was fresh out of Columbia's graduate school and very much starting out. I was too. Best I can remember, we met shopping for green groceries at Balducci's, just up Sixth Avenue from my place, and we saw each other a few times. It had to be at least fifteen years (how time flies) since our brief episode.

Tam Richardson, however, was not easy to forget. There was a kind of under-the-surface intensity about the woman that seemed always close to the ignition point. When you were around her, you were always worried somebody might accidentally light a match. However, she had no shortage of men in her life, and eventually we each went our own way. Ships that passed in the night. I never expected to hear of her again.

Things didn't quite work out that way, however. She started getting famous, as a thorn in the side of America's lackadaisical corporate management. Somewhere along the line, Tam Richardson had taken it upon herself to single-handedly kick some overpaid ass in America's plush boardrooms, and she wasn't trying to win any popularity contests doing it. She was the kid in the story who pointed out the emperor had on no pants, while everybody else was claiming his tux was a great fit. Guess you can't fire somebody in academia merely for saying what everybody knows to be true but doesn't have the guts to verbalize.

Then about a year ago, I noticed a full-length profile of her

in an airline magazine spread about "America's New Achievers." No escaping her. Between the lines, I got the definite impression she hadn't really changed all that much over the years. She was around five seven, high cheekbones, dark hair that looked like it could use a brush, and eyes that made you think twice about giving her a lot of bullshit. Reminded me of, say, the young Glenda Jackson with a heavy spike of Debra Winger. For my money, though, she was just about ideal in the female department. Trim bottom, nice little twist in her stride, just enough cleavage to make you wonder. She didn't go out of her way to advertise, but you figured the goods were on board. My recollection in a nutshell? Tam Richardson was a better than average looker, damned smart, and she knew no fear. None.

There was something about her, though, that always left people puzzling. Where'd she come from? American, sure, but no way could she have been corn-fed Midwest like her surname. The answer was, she had a slightly more exotic, and probably painful, history than most of us. Maybe that was part of the reason she always seemed to be a loner, never went along with the crowd. The one time she'd tried that, it hadn't worked. I got to know her well enough to hear a bit of the story, but I'd sort of repressed the details.

Maybe I'd do well to come clean and admit I still thought about Tam from time to time. What's more, I gleaned from the magazine piece that she still lived right around the corner. Made me think briefly about giving her a call, get together for a drink, the old days, etc. But I finally decided I'd had enough high-spirited women for a while. Time to mellow down. Why go looking for lightning in a bottle?

She'd always liked three things: good-looking men, telling the high and mighty unpleasant truths, and interior design. Consequently it was no great surprise that the magazine devoted a photo spread to her rambling six-room apartment. The place was in one of those NYU-owned buildings on the west side of Washington Square Park, and it was definitely a knockout. She'd played off the old classic interior, a generously proportioned thirties layout, turning it into an environment that blended technology and design. Not for Tam, though, the utilitarian "high-tech" look so trendy a few years back; no ugly "state of the art" machines. It was eclectic—modernism here, deco there.

Take her library-office. I smiled when I noticed that next to the latest IBM PC was a "streamlined" Raymond Loewy- designed calculator, pure thirties. Same old Tam. On the other hand, just to keep it all from getting too serious, she also had a collection of kitschy salt and pepper shakers scattered among the books—a dog peeing against a hydrant, a naked babe with spicy boobs . . . she told the writer it was her "tribute to America."

The place was everything she was, a potpourri of the world, a mishmash of styles, and she clearly loved it. I probably missed a good half of the insider gags, this outrage up against that one, but I must say she brought it off with appreciable elan. Truthfully the place was a perfect reflection of the Tam I remembered—a woman who did her own thing.

She was now, so it said, a full professor at the university. Undoubtedly she deserved it. She was also director of their new Center for Applied Technology, which she'd founded. When the interviewer asked her which department the Center was under, she'd apparently shrugged and said "certain people" at the university wanted to bring it in under the School of Business. But the Center had outside funding, was doing vital work, and she was darn well going to stay independent.

Whoops. That ballsy crack, although perfectly in character, meant she was now giving the back of her hand to university politics. Mouthing off in a national publication about some departmental power play is no way to endear yourself to college deans. It lays bare all their petty empire-building. Didn't seem to worry her, though; just like in the old days, she said exactly what she was thinking and let the chips tumble.

Her major occupation in recent years, as anybody who reads the op-ed pages around the country knows, was to shame American executives into getting off their duffs, to make them start diverting some of their executive perks into the serious problem of getting this country competitive again. She had plenty of ideas where the corporate-jet money could be better invested. Over the years she'd knocked out half a dozen books on technology and the American workplace—office automation, computer-aided design in engineering, robots and computer-integrated manufacturing, that kind of thing. Tam Richardson still believed America could whip the world, but it would take more than speeches and flag waving. Her latest expose of America's corporate fat cats, which actually got a sidebar in the story, claimed they'd better start cutting their million-dollar salaries and putting the money into creating American jobs, or we'd all soon end up fetching coffee for the new Pacific Rim dynamos and buying our goodies at East Asia's company store.

Only she didn't bother to say it that nicely. Worse than that, the book actually supplied a long list of America's more notoriously overpaid CEOs. I suspect there were a lot of corporate contributors to the university who'd just as soon seen her muzzled. Good luck, Tam.

Now the coincidence. The Saturday following my Friday night episode with the inscrutable president of Nippon, Inc., an event occurred that would soon bring Tam Richardson back into my life. Random luck? Fate? Anybody's guess. As it turned out, however, while I was on the phone leaving messages at country clubs for the building's attorneys, a mere five blocks away from my place Dr. Tamara Richardson was putting the final touches on preparations for an evening dinner party—destined to throw us together again only weeks later.

The dinner was supposed to be strictly social, to celebrate the beginning of her sabbatical—academic talk for a year off with three-quarters pay. There were a few dinner debts to square away, so the timing was perfect. She had several articles lined up; she'd finally axed a stormy year-long affair with a colleague in Economics named David Mason; and she was scheduled to begin a book on intelligent robots. She was trying not to think too much about academic politics and the real possibility her department chairman might consign her to some kind of academic hyperspace, there to teach freshmen for the rest of her tenured days.

By mid-afternoon she was down to the last-minute refinements on the evening's plans. Since the overnight rain had purged the soot from the air, she was feeling great. She put on a new Vangelis CD, worked a few modern-dance moves into her routine as she cleared the loose books out of the living room, and continued trying to convince herself that breaking off with Dave Mason had been a smart move. After a while, though, she wasn't humming anymore, just thinking. Okay, it had only been a week, but why had she invited him to come to the dinner? Just to be a good sport?

The thing about it was, they'd actually had a more or less

unspoken understanding not to inquire too closely into each other's occasional little diversions. They were both adults, right? This time, however, Dave had pushed it too far. He'd finally broken the rules, bringing one of his admiring grad students up to the apartment—her apartment. She bumped into them coming down in the elevator, and this one was a prize—stage makeup, bleached hair, the works.

Out of bounds. She'd nailed him right there in her marble lobby: you want to bang some Queens debutante, you'd better not be doing it here. This place is my home. She then told him to pack. The apartment was hers, and she wanted all signs of him out by Monday.

Then she'd invited him back for the dinner. Why? Could Humpty-Dumpty be put back together again? Crack eggs, make an omelet . . . she half smiled at the odd way your mind connects absurdities when you're a little overworked. . . .

That was when the phone rang.

Was it Dave, dropping out at the last minute to prove he could still piss her off, one more time? She headed for the kitchen, so she could at least chop some veggies while they argued for half an hour on the phone.

It wasn't Dave. Instead it was a scratchy old voice, one she loved. Shouting into a cell phone at Kennedy was Allan Stern, who announced in his staccato tones that he'd just stepped off a JAL flight fresh from some conference in Tokyo. He had to see her tonight.

"Tonight?" When it rains, it pours, she thought. "Allan, I'd love to, but I'm having some people in from school . . . What? . . . Well, sure, nothing that special . . . Allan, I adore you dearly, but you wouldn't know any of the . . . Okay, okay . . . Can you get down by eight?"

"See you then, Tamara. You're a dear."

Stern was an old, old friend, and a guy everybody in the country had probably heard of vaguely. Any freshman in computer science could tell you he was one of the unofficial founders of the field known as artificial intelligence, now usually shortened to "AI." As it happened, she had convinced him the previous spring that they ought to collaborate on a book about the growing use of smart robots in the workplace, but for some reason his input had never made it past the talking stage. She'd decided just to go ahead on her own with the writing.

Well, she thought, maybe he's decided to pitch in after all. Great. That would mean it might be adopted for a lot of college courses. Allan had plenty of respectability with the establishment.

He was probably the closest friend she had, her mentor almost. They went back to a Denver conference fifteen years agp, when he'd stood up in a session and challenged the conclusion of the very first paper she ever gave, though he'd come in midway through. Even then he had been a powerhouse in Washington, chairing one of the technical committees that reviewed federal grant applications submitted by university researchers. The inside talk on campuses was: love him or hate him, but think twice before you cross the opinionated bastard.

She was so mad she didn't care. She had sidled up to him at the coffee break and introduced herself, saying what an honor it was to meet a scholar so highly regarded, a man whose reputation was so well established. He nodded in absent acknowledgment, sipped at his Styrofoam cup, and stared over her shoulder. She then proceeded to advise the celebrated Allan Stern that he'd missed the whole thrust of her talk, which she'd explained in the introduction, and furthermore—judging from the data at hand—he struck her as a pompous asshole.

Such forthrightness, which was entirely new to Dr. Allan Stern's sheltered existence, so astonished him he apologized on the spot. By week's end he was trying to recruit her out to Stanford. He still was.

Allan was always punctual, to the minute, and that Saturday night was no exception. The doorman downstairs announced him at eight sharp. When she met him at the elevator, her first impression was he looked a trifle worn down. America's foremost futurist was gaunt, as always, but his trademark shock of white hair streamed over a lined face that was more than usually haggard. His hard eyes, which could bore through screw-off Congressional staffers like a pair of Black & Decker drills, were actually bloodshot. In short, the man looked awful. Then she remembered he'd just come in on the 747 directly from Narita. Into the teeth of the latest baggage-handlers' slowdown at Kennedy. Give the poor old guy a break.

She made him a drink and then asked, "Okay, Allan, what's up?"

"Later, Tamara. It's a long story." With which he lapsed silent. Very out of character.

About then everybody else started coming up, reasonably on time since Tam was known far and wide to hate the concept of "fashionably late." Also, she was a great cook. Bottles of bargain wine with the prices scraped off collected on the table in the foyer, and coats amassed in the second bedroom. Given that everybody knew everybody, it was mostly elbow patches and open collars. Only the women had bothered to dress. Simpson from Computer Science, whose wife worked in Admissions; Gail Wallace from Business, whose pudgy, skirt- chasing husband had guided two companies into bankruptcy; Alice and Herman Knight, who both taught in Economics (she was dean of the undergraduate college) and published as a team; Kabir Ali from Mathematics and his browbeaten little Iranian wife Shirin who seemed frightened of the world—and her husband. Only Dave had the nerve to be late and hold things up.

While they waited, they knocked off a little Scotch and white wine, trashed the administration, and complained about all the committees on which they were being pressured to serve. Around a quarter to nine Dave finally appeared, sandy curls askew to let her know where he'd been. She didn't even bother offering him a drink, just announced that everything was ready so let's adjourn to the dining room.

There're two kinds of dinners: ones that follow the rules, and ones that break them all. Tarn's were the latter. This time it would be real tallow candles and everybody's wine, including her own. Somehow her craziness always seemed to click; they inevitably came back for more. This time she'd decided to pay an offhand tribute to autumn and American cuisine. Cheddar cheese soup, marinated Ottomanelli's quail broiled with fresh sage, sweet potato fritters and baby peas, homemade corn bread, and then, as a change of pace (keep 'em off balance), an endive salad spiked with coriander. Dessert was an apple- walnut casserole, washed down with pots of McNulty's dark Haitian coffee. At the end she produced an ancient cognac you could inhale forever. By eleven-thirty everybody thought they'd just ascended to paradise.

She ordered Dave to take care of the dishes (since he'd

been acting as if he owned the place, let him help), then led everybody back into the living room. In the park below the weather was perfect, and marijuana sales were in overdrive. A couple of joints also appeared around the room, accompanied by withering glares from Allan. Then, while Ed Wallace was chatting up Shirin and everybody else was drinking and smoking, Allan picked up his cognac and motioned her in the direction of the study.

Finally, she thought. This must be some story.

She was right.

It wasn't her book he wanted to discuss. Instead, he wanted to tell her about what he'd just seen, and not seen, in Tokyo.

"Loved dinner." He settled into a leather chair, the one next to her long bookcase, and drained his snifter. "I was afraid I was turning into a fish over there." He laughed, but only briefly. Social hour was over. "Tam, I wanted to ask you if you could maybe help me out with something."

"What do you have in mind?"

"Well, you know I've always thought I was on top of what Tokyo is doing, but now I'm not so sure anymore. I'm afraid things are starting to get away from me."

"Such as?"

"Okay. Now, it's no secret I've been to Japan a lot. I've got my share of friends over there, people I respect and admire very much. But this trip started to get very strange. It's as though I'm suddenly an outsider. Just another gaijin. I'm puzzled, and I wonder if maybe I ought to be worried."

Gaijin. That sounds familiar, she thought. But it wasn't something that usually bothered Allan. She brushed her brown hair back out of her eyes and studied him. He'd never been more serious.

"What happened?"

He paused. "You know about their big artificial intelligence effort, called the Fifth Generation Project. If it goes the way they're saying, before too much longer they'll have programs, software, to design the next generation of computer technology. "

This was supposed to be news? Come on, Allan. Everybody knew. It was the talk of the industry. Japan's goal was computer logic capable of replicating human thought processes, a monumental, maybe impossible, undertaking.

"Allan, don't you remember we discussed doing a chapter on it in the robotics book? And if you—"

"Tamara, bear with me. You also know very well that project is Japan's attempt to leapfrog American technology. Added together with all their R&D on chip technology. In my opinion, by the way, our response is definitely too little, too late. More and more we're having to buy essential components for missile guidance systems from Japan. The Department of Defense is already nervous, but not nervous enough. We may have dug our own grave. And now I think our worst fears may be about to come true. Something funny seems to be happening, only I'm not sure what."

"What do you mean?"

"Let me close that door." He got up and did so, then turned back. "Maybe first I ought to tell you about the odd experience I had last week."

"Go on." She heard somebody in the living room put on one of her old Beatles albums—still the middle-ager's idea of hip.

"Well, as always, I scheduled a stop at the Fifth Generation lab to get up to speed on how their effort's doing. But all of a sudden it seems I'm too darned famous to be bothered with the shirtsleeve stuff. I tried to get in there for three days running. It was always the honorable Stern-san this and the celebrated Stern-san that and you must meet the head of every damned ministry and we have to set up this formal dinner and blah, blah, blah."

"Allan, you're the Grand Old Man these days." She laughed. "Get used to it."

"Wash out your mouth, Tamara Richardson. I'm not grand and I'm most decidedly not old." He sniffed. "No, it's as if they were very politely cutting me out. Okay, they didn't exactly say the project was off-limits now or anything, but there never seemed to be a convenient time to drop by the lab."

"Who knows? Maybe they just didn't want some American partisan poking about the place anymore."

"Could be. But why? I'm scarcely a spy for DOD, or the CIA. They know I only do pure science. Okay, maybe I'm old- fashioned, but Dr. Yoshida at least has always claimed to respect me for that. I used to spend hours with him going over his work there and vice versa. We swapped ideas all the time.

Now all of a sudden there's this smokescreen." He paused, sipped at his brandy, and then leaned back. "Which brings me to that favor I need."

"What?'

"Well, I was wondering if maybe you could try and get into the Fifth Generation lab yourself, check around a bit. See if you can find out what's cooking."

"Go to Tokyo?"

"I realize it's a lot to ask, but who else can I turn to? Tam, you're the only person I know who could pull this off. You know the technology, and they respect you. Also, you understand the language. Maybe you can cut through all the politeness and the translated PR. If you'd like a little per diem, I'll see if I can't shake loose the money from somewhere."

"Allan, really, don't you think you're maybe going overboard just a little. What if Dr. Yoshida was just tied up? The last time I visited the lab, he showed me everything, completely open."

"Ho, ho." He set down his brandy, and his eyes hardened. "I still haven't told you the clincher. There's some new guy in charge now."

"That's hard to believe. Yoshida practically invented the Fifth Generation Project. He's the director—"

"That's just it. Kaput. All of a sudden he's not around anymore. They said he's now 'technical adviser.' But you know what that really means. Removed. Sayonara. Promoted upstairs or downstairs or some damn thing. That in itself is mystifying. He's one of the most competent . . . oh, hell, the man is a genius. Why would they do that?"

"Very strange."

"Exactly. But now he's out. Couldn't even see me. 'On vacation.' The new director is some bureaucrat by the name of Asano. I spent a little time with the man, and I can testify he's a smoothie. Lots of pious generalities about 'technical cooperation.' But I got the distinct feeling he didn't want to talk details with me. Actually, I wondered if maybe he wasn't even a bit afraid to say anything."

Asano? Oh, shit. She took a deep breath. "Was his name Kenji Asano?"

"Ken. Right, that's his first name. Maybe you know him. I think he used to be a flunky with some government bureau

over there. But now he's just been put in charge of the Fifth Generation work. It's more than a little curious."

She puzzled a minute. From what she knew about the Fifth Generation, and about Kenji Asano, he had a lot more important things to do than run the lab. The "government bureau" he worked for was none other than MITI, the Ministry of International Trade and Industry. In fact, at last count he was Deputy Minister for Research and Planning, a top-ranked executive slot. Could this mean that Japan's ambitious artificial intelligence effort was being moved in on by MITI, their industrial war room?

"Allan, I'll tell you the truth. You may not have heard, but I'm in a fight now at the university. I expect to win, but I've got a lot on my mind. Notes for the book. I can't just suddenly—"

"Tam, I need your help. Look, maybe they've had some new breakthrough that none of us ever imagined." He paused. "Just between us, I lifted a strange MITI memo I found lying around an office when Asana took me on an escorted tour up to the labs at Tsukuba Science City."

She looked at him. "Was it classified?"

"How would I know? There was something about it. My sixth sense told me it was a document nobody was supposed to see. When I get back to Stanford, I plan to have a postdoc over in Physics make me a quick translation."

It was very unlike Allan to walk off with confidential memos uninvited. Which could only mean he must suspect something he wasn't telling.

"You'd better give me the whole story."

"Not now. Not yet. It's only guesswork, Tam." He glanced away. "Nothing to bore you with at the moment. But if you can find out anything, we'll write it up as a report I can circulate around the Hill. This could be important, believe me. Already Cray has started having to buy critical chips for its supercomputers from Japan. And while the Department of Defense is pouring billions into research on semiconductors that will withstand nuclear radiation, Japan is forging ahead on speed and miniaturization—what really counts. I think they could be about to have us by the balls, pardon my French. If they've somehow incorporated AI—"

"Allan, it doesn't add up. I once met Asano. In fact it was a couple of years ago at that Kyoto University symposium on

Third World industrialization. He spent a lot of time trying to pick my brain about our specialized silicon-chip manufacturing here. But he wasn't the slightest bit interested in artificial intelligence."

"Well, prepare yourself for a surprise. He's plenty interested now. And knowledgeable. But still, it's not like the Japanese to do something like this, install some government guy to run an R&D program."

"That's certainly true." She strolled over, looked down upon the park, and began to want a brandy of her own as she chewed over the implications. Was MITI setting up some new high-tech industrial assault? If the Fifth Generation had been taken over by Kenji and his planners . . . "Allan, let me think about this for a couple of days."

"Don't think too long. I'm convinced somebody over there is suddenly in a very big hurry. I need to find out the real story. Am I just starting to go nuts in my old age? . . . Well, make that my prime." He grasped her hand for emphasis. "And you really should make it a point to see this Asano fellow. If you already know him from somewhere, I'd say that's even better."

She started to respond, then stopped. She knew Kenji Asano all right. From a little episode at that conference, when he had invited the panel members of a session he chaired to a late-night tour of the endless tiny bars in Kyoto's Gion district. She remembered all the steaming sake and being ignored by flustered bar girls who were pretending that another woman wasn't around. They had no idea what to do about a member of their own sex there in their sanctuary of male flattery. Ken apparently had staged it mainly to watch their reaction, and hers.

Part of the scene was that Ken Asano was actually something of a hunk, as Westernized as they come and attractive in that way seemingly reserved for men of great wealth or great power. He may have had both, but she was sure only about the second. Whenever he handed out that meishi card with the MITI logo, even millionaire industrialists and bankers automatically bowed to the floor.

A lot of sake later, after the other panel members had piled into a cab for their hotel, she decided to show Kenji Asano a few things about women he wouldn't learn from giggling bar girls. She'd always heard that Japanese men were pretty humdrum in bed, quick and self-centered, at least in the opinion of a woman she knew who'd done exhaustive field research on the topic. After her own experience with Ken, though, she wasn't so sure. Still, it had been a passing thing. The next morning she awoke in her own room in the Kyoto International and half tried to tell herself it hadn't really happened—just a dream, a chimera of the sultry Kyoto night, brought on by all those quaint little side streets and red paper lanterns.

The truth was she still thought about him from time to time. He was a talented lover, she certainly recalled that part well enough, and he was a charmer. In fact, she could use a little of that charm right this minute.

What she didn't admire was the organization he worked for: the infamous MITI. Behind a smokescreen of "fair trade" rhetoric, MITI's intentions clearly were to extinguish systematically Japan's world competition, industry by industry. And so far they were batting a thousand. They'd never once failed to knock off a designated "target." What was next? Had MITI finally concluded that, down the road, intelligent computers could be the drive behind some massive shift in world power?

Maybe she should go.

She poured another dash of cognac for Allan, and they wandered back into the living room, just in time to see the Simpsons out. Everybody else followed except for Dave, now perched by the windows and glaring out into the dark. She decided to ignore him as she walked over, opened one a crack, and looked down. In the park below, commerce was tapering off and the Jamaican Rastas had begun toting up receipts for the night. No sounds, except the faint strains of reggae from a boom box.

Funny, but every once in a while she'd stop everything and watch the kids in the playground down there. What to do? The damned shadows were growing longer by the minute. Maybe Dave wasn't so bad. Trouble was, he needed mothering too.

Think about it tomorrow, Scarlet. She sighed, poured herself a cognac, and headed for the bedroom to get Allan's coat.

After she'd put him on the elevator, she came back and checked out Dave, now slouched in the big chair by the lamp, his eyes closed. He looked positively enticing, and she sounded his name quietly. Nothing. Then she realized he was sound asleep. Snoring.

The bastard. This was it. She grabbed his coat, pushed him out the door, poured herself another cognac, and plopped down in the living room to think.

All right, Allan. You've got a deal. Could be you're on to something. I seem to remember there's a conference in Kyoto starting week after next on supercomputers. Kenji Asano will probably show. Good time to catch him off guard and try to find out what's suddenly so hush-hush.

Yes, by God, I'll do it.

She didn't bother with any of Allan Stern's funding. This trip would be strictly off-the-record. She wrapped up some loose ends, called a few people she knew in Tokyo, lined up half a dozen interviews that might be helpful on the new book, packed her toothbrush and tape recorder, and boarded a Northwest flight for Narita.

She had no idea then, of course, but she was Alice, dropping down the rabbit hole. A fortnight later she was dining with the Emperor of Japan.

[CHAPTER FOUR]

Allan Stem's alarm about Japan's semiconductor challenge reflected only part of the picture. There was also plenty going on with Japanese research in addition to information processing. Superconductivity was getting a big push, as was biotechnology, optoelectronics, advanced materials. Although we in the West think of Japan as a newcomer in the high-tech sweepstakes, it actually has a long tradition of innovation. A typical for-instance: in the area of advanced materials those of us hooked on swords know the Japanese were already creating "new materials" hundreds of years ago that still haven't been bettered. Back then it was flawless steel for katana blades; today it's, say, gallium arsenide crystals for laser-driven semiconductors. How, one might inquire, did all this expertise come about?

To stick to materials research, if you think a moment you realize it's a discipline that actually must have begun in the latter days of the Stone Age. "High technology" in those times meant figuring new ways to use fire and clay to create something nature had neglected to provide. Not integrated circuits, but a decent water pot.

And the Japanese have been making terrific pots for a thousand years. As it happens, some historians claim the very first Japanese pottery was made in the province of Tamba, near Kyoto. Why mention this? Because, then as now, technology and politics had a way of getting mixed together in Japan, and Tamba was a perfect example. Tamba's artisans made great use of a special oven known as a climbing-chambered kiln. Whereas ceramics kilns elsewhere in the country were narrow and high, Tamba's climbing-hill chambers were wide and low, thereby allowing the fire to touch the clay directly. The result was a rugged, flame-seared stoneware that pleased the manly eye—powerful earthy grays, burnt reds, greenish-browns, all with a hard metallic luster. Thus Tamba was a locale much frequented by the warrior shoguns.

Which may be why Tamba province has another claim to history as well. It is the location of the one-time warrior castle- fortress of Sasayama, once a regional command post of the Tokugawa strongmen in Tokyo. You won't find overly much about Sasayama in the usual guidebooks, since it has the kind of history that's more interesting to Japanese than to tourists. The place has no gaudy vermilion temples, no bronze Buddhas ten stories high. Fact is, very little remains of the fortress itself these days except for a wide moat, green with lotuses, and a few stone walls lined with cherry trees that blossom an exquisite white for a few breathtaking moments each spring.

Although the castle is now burned down, a few homes of the samurai retainers of its various warlords remain. If you stand on the rocky edge of the moat at its southwest corner and look down through the cherry trees, you'll see an old-style house built some two hundred years ago by the twelfth daimyo of Sasayama for his most loyal retainer. Its walls of white plaster are interspersed with beams of dark wood, its thatch roof supported by the traditional ridgepole. Think of it as the home of the samurai most trusted, the guardian of the gates, the warrior nearest the fount of power.

Perhaps it will not seem surprising, therefore, that this ancient samurai residence, in the shogun stronghold closest to ancient Kyoto, was now home base for a powerful warrior of modern Japan. Matsuo Noda.

Samurai had once battled in Sasayama's streets; many's the time its castle had been stormed by raging armies; much blood had been shed and much honor lost. But the event that occurred in Sasayama precisely two weeks after Tamara Richardson's dinner in New York was a historical moment more important than any in its thousand years prior.

It began shortly after dawn, a cool September gray just ripening to pink over the mountains. The early sounds of morning—birdsong, the faint bell of the tofu seller, the steam whistle of the autumn sweet-potato vendor—were only beginning to intrude on the quiet. Noda was where he always was at this moment: on the veranda overlooking his personal garden, a classic Zen-style landscape whose central pond was circled by natural-appearing rocks, trees, bushes, paths. It was, of course, about as "natural" as those sculptured hedges at Versailles. In order to create the illusion of perspective and depth, the stones along the foreshore of the pond were bold, rugged, massively detailed, while those on the opposite side were dark, small, smooth—a little trick to make them seem farther away than they were.

It's a game heavy with nuance. For example, the stone footpath on the left side of the pond may look as if it goes on forever, but that's just part of the art: the stones get smaller toward the back, curving in and out among the azalea bushes till they make one last twist and disappear among the red pines and maples at the rear. Which trees, incidentally, have themselves been slightly dwarfed, again enhancing the illusion of distance, just as the back is deliberately shaggy and dark, like the beginnings of a forest that goes on for miles.

Noda's Zen garden, which deludes rational judgment by manipulating all the signposts we use to gauge distance and space, appeared to be limitless. The secret was that nothing actually ends: everything simply fades out and gets lost. It was a closed space that seemed for all the world as if it went on and on if you could only somehow see the rest of it. Yet peek only a few yards away, and you've got the mundane streets of sleepy Sasayama.

This special dawn, as a few frogs along the edge of the

pond croaked into the brisk air, he knelt on the viewing veranda in a fine cotton morning robe, a yukata emblazoned with his family crest (an archaic Chinese ideogram meaning "courage") and began to center his mind. He'd left his Kyoto headquarters early Friday evening, skipping the usual after-hours-drinking obligation of Japanese executives and grabbing the eight-thirty San-in Express to Sonobe, where his limo waited to bring him the rest of the way home. Now he was up before daybreak and readying his usual morning ritual. As he sat there, gazing across the placid water dotted with lotuses at the foreshore and framed with willows at the far horizon, his silver hair contrasted with the marine blue of the robe to create a presence easily as striking as the garden itself.

For a time he merely knelt, silently contemplating the view and listening to the metrical drip of water from a bamboo spout situated just at the edge of the steps. Finally he turned and picked up his sumi stick, a block of dried ink made from soot, and carefully began to rub it against the concave face of an ancient inkstone, till its cupped water darkened to just the proper shade. When the fresh ink was ready, he wet a brush in a separate water vessel, dried it by stroking it against a scrap of old paper, dipped it into the dark liquid, and looked down.

This was the moment that demanded perfect composure, absolute control. Before him was a single sheet of rice paper, purest white, and now his hand held the brush poised. He was waiting for that instant when his senses clicked into alignment, when the feel of the brush merged with his mind, much the way a samurai's katana blade must become an extension of his own reflexes.

Although he would stroke only a few kanji characters, scarcely enough for a telex or a memo, the moment required discipline acquired through decades of practice. His Zen-style calligraphy allowed for no hesitation, no retouching. It must be dashed off with a spontaneity that was, in itself, part of the art. As with the swordsman, there could be no time for conscious thought, merely the powerful stroke guided by intuition. No decision that confronted him throughout a business day would demand half so much mental control, inner resolve.

Just then, at the far end of the pond, the first sun flickered through the wisteria. Suddenly, without his consciously knowing the exact moment had arrived, as a Zen archer's arrow must release itself of its own will, his hand struck. The dark tip of

the brush pirouetted down the paper, starting at the left and laying down a mere five lines, twenty-two syllables.

Inishie ni

Once held,

ari kemu hito no

it’s said,

moteri cho

by men of long ago,

omitsuwa wo

my ancient prize--

ware wa mochitari

at last is near!

It was done.

He sighed, leaned back, and reached for the cup of green tea that rested beside him on the polished boards. The verse was in an archaic style, a few syllables longer than a haiku, modeled on an eight-hundred-year-old work by a court poet of the Heian era. The strokes were perfectly nuanced, the flow of the brush precise, the intuitive strength as natural as a waterfall.

Noda drained his tea, then rose to go back inside. His antique house was tastefully "empty": its tatami-floored rooms, measured in multiples of those standard three-by-six reed mats, were barren, a museum to times past. They also were open to each other, their sliding doors, fusuma, being pushed wide. The walls, too, were vacant expanses of white plaster with only an occasional mounted six-fold screen depicting poetry parties of the Heian era, that courtly civilization portrayed in The Tale of Genji. And there were no overhead lights, merely an occasional cypress andon floor lamp to augment the pastel glow of the rice-paper shop windows.

"Asa-han." He curtly ordered his gray-haired cook to bring breakfast, then turned to mount the ancient stairs.

"Hai." She nodded and was gone.

Although he kept the lower floor exactly as it had been two centuries past, the upstairs was a different matter entirely. It had been converted into a high-tech office, hooked through a maximum security TeleSystems TCS-9000 direct uplink (via the mid-Pacific Mareks-B satellite) to the mainframe of his new NEC information management system in the Kyoto headquarters, an augmented NEAX 2400 IMS, which handled voice, data, text, image. He had scarcely flipped on the system when the woman who managed his kitchen appeared, bowing, and deposited a tray bearing miso broth, rice, an uncooked egg, and more tea.

He grunted thanks as he was checking a CRT screen for the current rate on Fed funds, the cost of the money American banks lend each other overnight to meet reserve requirements. No surprises. Then he turned and cracked the egg over his rice, adding a leaf of dried nori seaweed. As he leaned back, chopsticks in hand, he quickly glanced through the Tokyo papers, followed by The Asian Wall Street Journal and the satellite edition of London's Financial Times. Finally he tossed them aside.

This was always the moment when he liked to take measure of the three photos standing in a row across the back of his teak desk. The first was his deceased wife Mariko—long-suffering, deferential, resignedly selfless. A model Japanese woman. He still thought of her with fondness, but as was expected of a Japanese helpmate, she always ran a distant second in his affections. His work came first.

The next picture was very different. This woman's face was white, her hair a lacquered wig, her lips a tiny red pout. Her name, Koriko, had been assigned years ago in the Gion district of Kyoto, and she was holding a three-stringed lute, a samisen, and intoning some classical melody from centuries past. These days she purchased thousand-dollar kimonos the way most office girls bought jeans, but she worked for the money. She was a geisha, a real one, an artist whose calling required years of training and commanded the awe of even the most modern Japanese. Like a prizefighter or a matador, she'd spent long painful hours perfecting style, technique, art. She had been Noda's one-time protégée, beneficiary of his patronage. Now, though, she had other "patrons." He still missed her, but the memory was fading.

The third photo was a face familiar to all of Japan's avid TV viewers—Akira Mori. She was wearing a dark blue Western suit, her hair a glossy pageboy cut, the conservative look of times past. It was the occasion of her graduation from the School of Law, Tokyo University (Tokyo Daigaku, or Todai as it's known), an important moment. Todai's alumni represent a network, a batsu, of the country's ruling elite, who compete with each other for the choicest, most prestigious government ministries. Although she had chosen a more visible career, she still relied heavily on her contacts in this governing clique, heads of the leading ministries, including Finance, Foreign Affairs, and of course the Ministry of International Trade and Industry, MITI.

Matsuo Noda himself had, in fact, once headed MITI, probably Japan's most powerful ministry. He came from ancient samurai stock—fittingly perhaps, since the bureaucrats of modern Japan are mostly of that class. The samurai caste, men who served a liege lord and were forbidden to engage in trade, were actually Japan's first public servants. In between civil wars they became sword-carrying bureaucrats. Many a modern bureau chief has ancestors who wore two swords and sliced up a peasant or a merchant now and then with impunity, which may help explain why the average citizen still views government officials with such nervous awe.

A Todai honors man himself, Noda was a natural for MITI, which runs what is in many ways a covert operation. The head offices are in a nondescript, soot-covered building of tinted glass and limestone near Tokyo's Hibaya Park, guarded by armed, helmeted members of Japan's National Police. Inside it's mostly open floors and lines of gray steel desks; no plush carpets and mahogany suites. MITI has twelve bureaus, each devoted to a major industrial sector. If its officials decide Japan's strategic interests would be served by a certain manufacturing group's cutting production, lowering prices, altering product lines, these "recommendations" are passed along. And it happens.

Noda began his career there by circulating through the different sections, "going around the track" as it's called, after which he proceeded to run the General Affairs office of various bureaus, by which time everybody had him picked for a mover, on the "elite course." Eventually he was promoted to section chief in the International Trade Bureau, next on to bureau chief, and finally at age forty-seven he made the top. Vice minister.

After he reached the pinnacle, he held the job for a mere five years, then routinely left. He had to go; early fifties and you're out. MITI is no country for old men. He moved on to head the Japan Development Bank, JDB, where he financed various high-tech start-up industries. Finally he retired and went out on his own.

Unlike most other retired government officials, however, he didn't accept any of the lucrative private offers he received, the suddenly "vacant" spot on a conglomerate's board of directors. No, he had his own smoldering vision. In a dazzling and successful departure from usual Japanese convention, he

founded Nippon, Inc., an adjunct to Japan's major financial players, with headquarters in the commercial center of Kyoto. His new organization immediately became a financial fixture in the new postindustrial, high-tech Japan, and now, five years later, Nippon, Inc. was a thriving force in the management of capital. These days even the new generation at MITI routinely called him up for "consensus."

For Matsuo Noda now, everything was in place; he was at last ready to pursue a lifelong dream. He'd never forgotten the end of the war, that last day on Okinawa when Ushijima's 32nd Army was a dazed remnant. He'd been in the cave above Mabuni when the general radioed his farewell to Imperial Headquarters, then severed his own spinal cord. Matsuo Noda, with anguish he could still remember, had burned the regimental flag and told those remaining to scatter, to become guerrillas—repeating Ushijima's last command to "fight to the last for the eternal cause of loyalty to the emperor." Noda had declared that their struggle would continue on for a hundred years if need be.

He had overestimated the difficulty. The plan now poised had required less than fifty.

As usual for a work-at-home Saturday (just another business day in Japan), he was wrapping up loose ends from the week, finishing reports, signing off on audits. Two printers were running, since he preferred to work with hard copy, and he was reviewing the list of outstanding loans NI was in charge of monitoring, checking for any early signs of trouble. Had any credit ratings slipped? If a receiving corporation was publicly traded, had its stock faltered? What was the overview: securities, un-amortized discounts on bonds, cash on hand? Next he paged through the weekly updates from the Small Business Finance Corp., the National Finance Corp., the Shoko Chukin Bank, various credit associations and savings banks. It was all on his Kyoto information base, pulled off the new fiber-optic network that linked Japan's financial centers.

He was about to ring down for fresh tea when a priority override flashed on the screen for his eyes only. This meant a coded message that could only be unscrambled using a special module in the computer. The Kyoto office knew he was on line, but they hadn't wanted to route the information directly.

Highly irregular.

He punched in the code, called up the receiving routine, and waited for the message.

There had been a call from ship-to-shore phone, the communications line linking him directly with Dr. Shozo Takahashi, director-in-charge of his top secret "project" in the Inland Sea. The director was requesting that Noda-sama contact him immediately via scrambler. Top security. He felt his pulse begin to race as he digested the news.

It had been so easy. Almost too easy.

He sat perfectly still for that timeless, historic moment, gazing at the photograph of Akira Mori. A promise kept, from long, long ago. Four decades now, and he had never forgotten what he had said he would do for her.

He called down for tea, waited till it had been delivered, then punched on the phone and switched it to the security mode.

But even on the scrambler, Takahashi began circumspectly. As the esteemed Noda-sama was aware, their "project" had, over its three years, contended with great difficulties and many disappointments. They were working at the very limits of undersea technology. As Noda-sama also knew, he went on, their early attempts at seismic vertical profiling had been a complete failure. Takahashi took personal responsibility for that. Next they had changed strategy and utilized state-of-the-art microwave radar, hoping that minuscule changes in density along the bottom might indicate what they sought. That too, Takahashi apologized, had been unproductive from the start as Noda-sama had been informed, and he, Takahashi, took full blame for the failure.

Noda cut in at that point, impatient and wanting to circumvent the litany of apologies. Why was Takahashi calling?

The director paused dramatically, then declared he wished to inform the august Noda-sama that their latest approach, the use of a new digital magnetometer, had at last borne fruit. Only this morning they had detected and brought up an "item." In the treacherous straits east-northeast of Shikoku. It was a water-tight gold case embossed with what appeared to be a sixteen-leaf chrysanthemum or kiku. The imperial insignia.

Other confirming inscriptions? Noda nervously reached out and clicked off the humming computer.

Yes, the formal script across one end appeared to be no later than tenth century. Although they dared not open the gold case for fear of damaging its contents, at this moment preliminary analytical procedures were underway and the early results, including a makeshift attempt at shipboard X-ray crystallography, suggested that the steel inside, which clearly showed traces of copper alloy, contained less than a hundredth of one percent of iron oxide. In short, it was possible the "item" might be perfectly preserved.

It was theirs, Takahashi said, in that breathy, clipped language inferiors use to signify great importance and great deference. It was his extreme honor to announce to the esteemed Noda-sama that the most important archeological find in the history of Japan now belonged to Nippon, Inc., and they—

"Chigau," Noda cut him off, in the curt tone expected of superiors. Incorrect: it belonged to its rightful owner and would now be returned.

And furthermore, he added, Nippon, Inc. had just ceased to exist. Since the name for ancient Japan was Dai Nippon, "Great Japan," as of this moment Nippon, Inc. had just become Dai Nippon, International. A complete reorganization would begin immediately.

Finally he ordered a total blackout. Radios silenced. No shore leave for crew or scientists.

He clicked off the phone and repressing a tremble, descended the stairs.

And there on the garden veranda, using a new brush and perfumed sumi ink from his rare collection, Matsuo Noda composed a very elaborate letter, long swirls of black down a perfect sheet of thick, flowered paper hundreds of years old. It was then sealed in a silver case and hand delivered by special messenger to a fortress in, the center of Tokyo.

Five days later its recipient read it before a nationally televised press conference, and Japan exploded.