Coming of Age: Volume 1: Eternal Life (9 page)

2. Slow-Motion Train Wreck

“We’ve got to convince Dad to retire,” Leonard Praxis told his brother at a private meeting in the chairman’s office. Their sister was calling in from Denver on speaker phone—kept at a low volume so the conversation wouldn’t be heard beyond those walls.

“Doesn’t Human Resources have a policy on that?” Richard asked. “About everyone retiring at sixty-five? We could simply wait a few months and let that kick in.”

“That’s just for employees,” Leonard said. “And even there, we’ve granted exceptions in the past. The policy has never been tested against senior executives—or family members.”

He paused for Callie to chime in, but the connection remained eerily silent.

“Dad’s the biggest shareholder,” Richard said slowly, “with thirty-five percent of the company.”

That gave Leonard an idea. “I hold fifteen percent and, among the senior executives on the board, I know I can swing another ten percent. You each hold ten. So together we can force him out.”

Richard was nodding thoughtfully but didn’t commit himself.

The speaker box made a small noise, perhaps a muffled cough.

“I’d need both of you with me on this,” Leonard stated flatly.

“Dad’s done a pretty good job over the years,” Callie said. “He’s kept the company on an even keel—despite current difficulties. I trust his judgment.”

“Except that he’s had a near-death experience,” Richard said. “Who knows how much brain damage he suffered? He’s now an untested quantity.”

“He seemed pretty sharp to me,” their sister replied.

“The point is,” Leonard said, “he had a massive heart attack. And what’s running inside his chest now is, at best, a science experiment. There’s no telling how long it will last.”

“He’s held the reins for almost twenty years,” Richard put in. “We knew this day would come sometime, when the next generation has to step in. Dad is not going to live forever. This is an opportunity for him to bow out gracefully.”

“And I’m already—” Leonard started, then stopped himself. How was he going to end that sentence? In place? In charge?
In control?
It sounded bad. “I’m not doing such a bad job here, am I?” he ended lamely.

“You’re not doing badly,” his sister admitted. “But you don’t have his experience or his connections. And the position you took on that St. Brigid’s fiasco—”

“The Legal Department backed me on that!” Leonard shot back.

“So? They were wrong, too, not to settle. I’m just saying another year or two of grooming under him—and paying attention this time—couldn’t hurt.”

“So we don’t have your shares?” Leonard said.

“No, not at this time,” she said. “Not like this.”

“Then I hope we all get the luxury of waiting.”

* * *

The Great Crash came three weeks after John Praxis returned home from the hospital.

He was out jogging that morning, following the challenging road that curved up through the fog from Sea Cliff to the Legion of Honor museum, listening to KCBS in his ear buds. The first news story simply said that the People’s Republic of China had sold a block of U.S. Treasury bills.

Praxis noted the fact, buried among the weather and traffic reports.
People and countries must be rolling over their investments all the time,
he figured. He continued his morning run.

The second version of the story mentioned a
large
block of bills, ten-point-two trillion dollars worth, which—the announcer read in the same monotone—accounting for inflation, represented ninety-five percent of the Chinese government’s holding of the U.S. national debt.

Praxis stumbled, caught himself, and then took two more steps. He really didn’t want to break his stride, not when he was all hooked up with his heart rate monitor and pacing himself, especially when he was almost at the top of his run, with the square façades and colonnade of the museum just appearing out of the mist ahead. But he did stop.
That’s not a sale, that’s a dump!
he realized. And in a flash it occurred to him:
Who’s around to buy up that much paper?

He turned and loped back downhill, taking long strides in triplets to the rhythm in his brain:
This is bad … this is bad … this is bad!

Within forty-five minutes he was downtown in the thirty-eighth–floor conference room watching the story unfold on the widescreen with his two sons. They switched back and forth between the world news on CNN and the financial news on CNBC. In either case it was bad.

The Dow Industrials were down about a thousand points, heading toward a loss of fifteen hundred for the session, or a drop of about seven percent—and that was only the beginning, all the commentators warned. The Chinese had announced their intention to “get out and stay out” of the U.S. debt market until the government stopped “intentionally inflating” the supply of dollars in order to “erode the value of its obligations.” Praxis’s original suspicion had proved accurate: No buyers existed for that much suddenly available paper debt. In fact, Japan, the Caribbean banking centers, Brazil, and the major oil exporters—the next largest holders of U.S. debt—were all following China’s lead. The credit rating agencies had announced that at two o’clock Pacific time—after the markets had closed on the East Coast and before they were due to open again in Asia—they would officially adjust the rating of federal debt instruments.

“This is bad,” Richard said, echoing his father’s earlier sentiments.

“Thank God we don’t hold any T-bills,” Leonard said with a chuckle.

“You don’t understand,” Richard said. “There goes half our backlog in government projects.”

“Or worse,” Praxis added.

“We surely don’t have that much going with the Feds,” Leonard objected. “The wharf at the Norfolk navy yard and the ring road at Sheppard air base, sure, but we’ve been light on federal projects since—”

“You still don’t understand,” Richard insisted. “Every project backed by government bonds is now in question. That’s all our transportation work, all the water projects, half the power plants. Even if that backing is no more than five or ten percent, losing it puts the whole financing package in question. And don’t think this won’t spread to the states, too. This is just terrible.”

John Praxis made a decision. “Start an analysis, Richard. See where we stand. See if we can come up with some kind of strategic plan.”

“What plan?” Leonard demanded. “What can we do?”

“We can start by suing for breach of contract,” Richard said.

Praxis sucked his teeth in disgust. “That only works if the client has
money.
Look, I don’t know what we can do yet. But if we start by demanding strict terms and payment assurances, we’ll lose these customers for a generation. Maybe we can somehow signal our willingness to go long on the payment schedule.”

“Then we go bankrupt,” Richard said. “We have suppliers and subcontractors to pay, too, you know.”

“Yes,” Praxis agreed. “But it’s better to stretch than to break—which is what will happen if we get pushy with our clients. We need to show a willingness to work with them rather than fight them. Maybe even trade payment up front for some kind of equity position, where feasible.”

Richard was aghast. “And become—what? A banker?”

“Be reasonable, Dad!” Leonard said. “We don’t have enough credit to cover—”

Praxis interrupted them both. “We have a damn sight bigger credit line than our government clients right now. Let’s be prepared to use it. We’re in a whole new world, boys. And if ever there was a time to go all hands on deck, this is it.”

* * *

The day Antigone Wells returned to the offices of Bryant Bridger & Wells, the legal secretaries chipped in to buy a box of Krispy Kreme donuts and left them on the desk of her administrative assistant, Madeline Bauer. Although the pastries had no aroma to speak of, their scent—or simply the rumor that free food was available—wafted through the four floors of the law office like invisible pheromones. No one told Wells, of course.

That morning she was sitting at her desk, wondering what came next and afraid to discover she no longer fit into anyone’s plans. For an hour she played with the computer, refamiliarizing herself with the software for managing emails, caseload assignments, and accounting of billable hours. It was all vaguely familiar, but she still had nothing to enter, no messages to send. Wells ended up reading months-old emails that Carolyn Boggs had already answered, trying to remember the details of cases where she was referenced and the circumstances of those where she was not. She felt like a fraud.

A young woman—early thirties, daringly dressed, face hidden behind a donut—popped her head into the open doorway. “Hi, Auntie!”

Wells groped for a name. Giselle-something. “Can I help you?”

“Oh, um, yeah.” The woman swallowed hard. “I’m, um, trying to find Thorvaldsen Electronics in the files. Which side did we represent?”

Wells stared at her. Then, like the answer floating up at the bottom of that old toy, the Magic 8 Ball, the word appeared in her mind. “Defendant.”

“Oh, right! Thanks, Auntie!”

“You’re welcome!”

Two minutes later, Sully Mkubwa stuck his head in. He wasn’t eating a donut but held one wrapped in a paper napkin. “Welcome back, ma’am,” he said, then paused. “I forget, who is the psychologist at the American Forensics Institute that we go to for expert testimony?”

Wells stared at him for a moment, then the information tumbled out. “There are two, actually. Amy Lewis does our civil cases. Peter Behrend handles the criminal work.”

“Thank you, ma’am!”

“Oh, Sully?” she called after him.

“Yes, ma’am?” His head came back into the doorway.

“Didn’t you and Amy date a couple of summers ago?”

“Why, now you mention it, I believe we did.”

“Then you’re a heartless cad, Sully.”

“Thank you, ma’am!”

After three more of these pop-up exchanges, including one where Carolyn Boggs—also bearing a donut—asked about one of the emails Wells had just read, she became suspicious. She stalked out of her office and found Madeline applying bright-red varnish to her nails.

“I’m glad to see you’re keeping busy,” Wells said.

“Hey! I’ve been working my ass off in the pool for three months. I’m just happy to get back up here and relax. Is there something you need me to do?”

“Tell my why everyone has a sudden case of amnesia this morning.”

Madeline glanced at the big white box with the green polka dots. By then the donuts were half gone. Wells walked around her desk and found a note in front of the box: “Help yourself, but be sure to say ‘Hi’ to Auntie and ask her a question.”

“Are they testing me?” Wells asked suspiciously.

“I think they’re trying to make you feel needed.”

“Well, isn’t that just humiliating!” Wells fumed.

“In a nice, pathetic, disparaging sort of way, yes.”

“I don’t suppose
you
had any hand in this?”

“No, ma’am. I
hate
Krispy Kremes.”

Before Wells could comment, one of the legal secretaries came up to Bauer’s desk, reached for a donut, then froze, withdrew her hand, and ran back down the corridor. Wells turned to follow the direction of the woman’s glance and saw Ted Bridger coming from the other direction.

Bridger was carrying a gray-cardboard file folder, not very thick, a case in the early stages of documentation. He reached for a donut with his free hand, paused to read the note. “Are you ready to get back to work?” he asked. “Oh, ‘Hi, Auntie,’ by the way.”

“Hello, Ted. Of course, I want to work, but—” She lowered her voice. “I’m just not sure how much law my battered old brain retains right now.”

“Shh! They’ll start saying that about all the partners,” he said, smiling.

“I’m serious, Ted. Two weeks ago I could barely read a newspaper.”

“So … do you need to take some tests, or pass the bar again?”

“Nothing that formal. I’m just not sure how sharp I am.”

“And will that fix itself by wondering about it?”

“Well, no …”

“Then here!” He shoved the folder into her hands. “Simple case. Two parties. Dispute over contract terms.” He paused. “If you want, take Carolyn and Sully along as training wheels—in case you get stuck.”

“Thanks, Ted. I appreciate your confidence in me.”

He reached into the box again. “For that, I get a donut.”

* * *

“And hell followed after,” John Praxis murmured to himself, echoing
The Book of Revelation,
as he followed the financial news.

After more than a decade of benchmark interest rates in the sub-single digits, the straps had come off when the U.S. government essentially defaulted on its obligations. Everyone understood that the Federal Reserve had tried to stimulate a flagging economy by holding down the cost of money—and thereby hold down the interest the government would have to pay on the national debt—while at the same time trying to prime the economic pump by printing trillions of dollars in “quantitative easing.” With the failure of this monetary policy, the laws of economics took over. Within two weeks, the federal funds rate shot up to twenty percent, and the interest that banks charged their best customers went to twenty-five. The interest rates that the average person paid in mortgages and car loans went above thirty percent. Revolving debt like credit and charge cards went to fifty percent. The national economy, which had been promising recovery for almost all of that same decade, rolled over and died.

He didn’t really blame the Chinese for starting the landslide. The real culprit was a generation or more of powerful men who sat around long tables of polished hardwood, dribbling cigar ashes and imagining they were smarter than everyone else on the planet. The seeds of collapse probably dated back to 1971, when the Nixon Administration took the country off the gold standard, ended the Bretton Woods system of exchange rates, and turned the U.S. dollar into a fiat currency.

Ever since then, these masterminds had played chicken with the U.S. economy, theorizing about how much stress the monetary system could stand and then pushing against that limit, then out beyond it, into the void. What had started as calculated risks eventually required bold moves to recoup the losses, and after the bold moves came the desperate gambles. These were not wise or good men, but they dabbled like sorcerers with complex equations that pretended to control forces no one could fully understood, let alone foresee the consequences three steps down the road. When you played with other people’s money, you took risks you would never attempt with cash from your own pocket. Economic charlatans! Witch doctors! Fools!