Terror on Wall Street, a Financial Metafiction Novel

TERROR ON WALL STREET

&

KENNETH EADE

Our society is so fragile, so dependent on the interworking of things to provide us with the goods and services that you don't need nuclear warfare to fragment us anymore than the Romans needed it to cause their eventual downfall.

— Gene Roddenberry

This book is dedicated to Becky, Gordon’s wife and life partner.  We all should be so lucky to be loved by such a person.

FOREWARD

It began very quietly with a few signals that I missed:  “Where are my car keys?” and “I can’t find my glasses.”  I have been told that next I will have difficulty remembering recently learned facts and will lose the ability to acquire new information, and eventually, I will also lose my writing ability. As my memory difficulties peak, I'll lose awareness of recent experiences and events and  will have increasing episodes of urinary incontinence. Then I will begin to experience personality and behavior changes. In the final steps, I will lose the ability to speak and ultimately to control my movement
s
.

     Finally, I will be unable to hold my head up or even walk. My wife, lover, and companion will be physically and mentally exhausted by nursing me in a futile battle against an unknown assailant for which there is no cure.  Death then follows. The whole process will take as little as two years or as long as eight. With effort, I will be able to slow down the process. It’s called Alzheimer’s disease and I’ve got it.”

– Gordon L. Eade

     In 2011, my father was diagnosed with Alzheimer’s disease.  Shortly thereafter, he gave me the manuscript for this book and asked me to work on it for him.  Since that time, I have written eight novels, all of which focus on important issues.  I now have come back to this project – the work of a man who was a financial genius able to retire before he was 54 years old and live entirely off his investments.  It carries the wealth of his knowledge about investing and the stock market, and represents his first venture into writing fiction.  His idea was to use metafiction to teach financial principles.  It’s not really my style, but that was his concept and I tried to respect that.  The main characters are his creation.  I have helped him with the story.  He already doesn’t remember writing it.  I hope that you and he will enjoy reading it.

  – Kenneth Eade

PROLOGUE

In 2007 at the peak of the economic bubble, the financial services sector had become a wealth creation machine, ballooning in size to the point that it captured profits equal to 40 percent of the total corporate profits of all companies in the United States.  There were new financial products, including a new array of securities so complex that even many CEOs and Boards of Directors didn’t understand them.  These financial products were an ever-driving force of the nation’s economy.

     Employees of some of our largest investment banks earned bonuses of millions of dollars, taking risks that they either did not understand or didn’t care about, that destroyed our economy and those of other countries worldwide. It now appears that it will take many years to recover from the damage done to the economy.

     Politicians have, for years, been using low cost housing schemes to gather votes. They have discovered in the last twenty years that guaranteeing housing loans is a cheap way to buy votes, unaware that, at some time in the future, these unwise loans would explode and destroy the economy.

     The United States Congress has, for the last seventy years, been absorbed in providing modern housing for the poor. These housing projects have created neighborhoods that are filled with crime and which are occupied with dysfunctional families. Congress just does not understand the highly complex economic system in this country. Providing low rent housing to the underprivileged and the poor does not improve the living standards of the poor: it just creates additional problems.

     A similar condition has developed in pension provisions for workers who do not have defined benefit pension plans. The government passed legislation that encouraged private employers to unload the risks of defined benefit pension plans onto the worker, presuming that the average worker was qualified to manage a stock portfolio. Private industry now knows that even highly skilled managers are not qualified to manage stock portfolios. So, the risk was dumped on the worker, who delegated management of his portfolio to a stock broker, who is immune from most responsibility under current laws.

     It is well known that defined pension plans have all but disappeared (except for those for government employees and union workers and those replaced by defined contribution plans), leaving the worker with the responsibility and the risk on his shoulders - a position he or she is not skilled enough to handle.

     In addition, academics have known for fifty years that the industry has been methodically cheating the public by charging for services that are worthless, as demonstrated by countless peer-review studies by academia and their students.

     Recent developments in our financial system indicate that the country is experiencing a dramatic and sudden shock, the depth of which will not be known until its recovery. This pending depression is quite different than the previous one in the 1930s in that today both consumers and industry are overleveraged. Financial institutions are also overleveraged in their exposure to default by derivative instruments, and it is well beyond their ability to withstand defaults of those instruments.

     The techniques that were used in the 1930s to  reset the economy will simply not work today, and I believe that the financial experts will try them but not succeed.  In an economy that is overleveraged to historic proportions, economic stimuli will not do the trick. Banks will stop loaning to customers unless they have excellent credit. Bank-to-bank loans will freeze up since they will not trust one another's financial strength. Businesses will lay off as many employees as needed to return to some level of profitability. We are a consumer-based economy, and until consumers pay off some of their bank and credit card debts, it will be hard to get credit and we can expect credit card interest rates to rise.

     The type of crisis portrayed in this story could happen at any time.  It is important that we note the weaknesses in our financial system, and work toward implementing solutions before the next crisis comes.  This book is designed to teach you to do that on an individual level.

CHAPTER ONE

BLACK FRIDAY

November 27, 2020 was a day like any other day after any other Thanksgiving.  The birds fluttered about in the trees and sang.  Everyone who wasn’t too tired (or too hung over) from their holiday stuffings were lining up outside the local stores to take advantage of the “Black Friday” sales. Those who didn’t have the day off and who were not going to the sales woke up, got dressed, and went to work, grumbling all the while that the Friday after Thanksgiving should be a national holiday.  The stock exchanges opened as usual for a short day of trading.  There was no indication of the havoc that was to come, except to some who felt that something was coming (but they didn’t know what it was).  At the Chicago brokerage firm of J.C. Mortenson Securities, a stirring had begun.

     “Bob, someone knows something.”

     “What the hell are you talking about?”

     Bob Brammon, a salesman for J.C. Mortenson, rose up from his cubicle to look at his colleague, George Nabors, who was staring at his computer screen as if he had seen a ghost.

     “Really, Bob.  Someone’s shorting transportation stocks, big time.  And major retailers like Walmart.”

     Bob’s eyes widened.

     “What is it?”

     “I don’t know, but everyone’s getting in on it, buying puts on stocks in both sectors.  Energy stocks, too.”

     “Should we take some of the action?  Might be a good play.”

     “I don’t know.  It looks really fishy.  The market’s only open half a day today.  I’d want to study it a bit longer before I’d recommend that.”

     “In today’s market, a second could pass and you might miss an opportunity.  I’m going in, using my own account.”

     “I thought your professor said there were no deals in the stock market.”

     “There aren’t.  But it looks like someone knows something is going to happen, and it’s not going to be good.  Everyone else must be piggybacking on that investor.”

     “Looks like way more than one investor.  Well, whoever he is, he has a hell of a lot of buying power.  Hey – don’t you have class today?”

     “No, we’ve got to be at a Congressional hearing next week.  We’re off today.”

***

The local Walmart at Crossgate Commons in Albany, New York had opened the doors for its Black Friday sale on Thanksgiving Day at 6 p.m., and had stayed open through the next day for the rush of holiday shoppers seeking deals.  The air was heavy, perhaps warning of an early snowstorm, but that didn’t stop the deal seekers.  They dressed in their battle gear - winter coats and jackets, hats, gloves and mittens - and rushed to the store with their shopping lists, charge cards, and the contents of their piggy banks.  Even the Salvation Army Santa Claus was up early, ringing his bell in front of the store as the busy shoppers rushed in to get the best buys; some throwing coins into his bucket as they hurried past him.

     Sharon Wilkins circled the parking lot, looking for an available space for her white Toyota Prius.  Black Friday was like a war, a war that started in the parking lot and continued in the free-for-all in the store.  Every shopper, behind every shopping cart, was in competition with every other shopper for the best bargains.  It was like a fisherman had thrown a bucket of chum into shark infested waters.

     Sharon glided up and down each car infested aisle of the parking lot in frustration.  Not only would she not get a space near the entrance, she would be lucky to get any space at all.  Her little Chihuahua, Chinky, sensing her anxiety, gazed up at her where she was curled in a little ball on the passenger’s seat and smacked her chops. 

     “Yes, Chinky, Mommy’s mad.  If Mommy doesn’t find a parking space soon, she’s going to miss out on all the bargains.”

     Sharon noticed an old lady, walking toward her.  She rolled down her window, feeling the cold blast of fresh morning air, and waved at the woman.

     “Are you leaving?”

     The old lady cupped a hand to her ear.

     “What?”

     Damn it, you old bat, what do you imagine I would be asking you?  Are you dumb and deaf?

    
Sharon tried again, this time louder.  “Are you leaving?”

     “Am I what?”

     “Leaving!  Are you leaving?”

     “Yes.”

     Sharon put the Prius into a slow, silent crawl, as the old woman waddled down the aisle.  She scanned the rows of cars, trying to guess which one may be the old crone’s car.      
It has to be that one,
she thought, focusing on a faded green 1970’s style Cadillac. 

    
Probably the original owners.  Her and Mr. Old Fart.

     The old woman seemed to slow down before reaching her car, like an airplane taxing to the gate, taking more agonizing seconds out of Sharon’s shopping time.  She made a fist and hit her steering wheel, avoiding the temptation to hit the horn instead.

    
Don’t want to give the old witch a heart attack.

    
The old woman opened her door and popped open her trunk, which slowly creeped open.  The frustration chewed away at Sharon’s patience, as the lady slowly placed her bags in the trunk, and then began the long walk back to the driver’s seat.  Cars were piling up behind Sharon, who put her turn signal on to reserve her spot.  Nobody was going to take that space but her.

     She saw the brake lights flash as the ancient Cadillac fired up, blowing a plume of smoke out of its tailpipe. 

    
Take your time.  Shit, take all day!

    
The Cadillac slowly backed out of the space, making the slowest turn in history, and then lingered there for a while, probably just to frustrate Sharon. 

     Finally, Sharon slid into her spot in the packed parking lot, swept Chinky up in her arms, and began a fast walk to the store entrance.  She knew that there wouldn’t be any free carts at the front of the store, so she joined a long line of patrons at the cart return, waiting for exiting shoppers to give up their carts.

     Finally, she had one of her own.  She put Chinky in the child seat, right next to her purse, and pushed the cart into the store, preparing for battle.

     At the entrance a retarded boy was repeating the phrase, “Happy holidays, welcome to Walmart,” to the hordes of shoppers wheeling in, but when he saw Sharon, his eyes became bigger.

     He put his hand forward like a traffic cop.

     “Stop!”

     “What?”  Sharon was getting more and more angry.  First the old bat and now this retard.

     “Is that a service dog?”

    
Is he kidding?

    
“Yes, yes, this is my service dog.”

     The retarded boy smiled.  “Welcome to Walmart.  Happy holidays!”

          The two-story megastore was decorated to the gills for the holidays with fake garland, shiny tinsel, and twinkling lights on every aisle. Christmas music merrily played from every corner of the store as hundreds of customers filled their baskets and scores of others waited in the long checkout lines with their carts piled high, overflowing with groceries and gifts.  Every register was open, with a cashier on duty swiping bar codes, making their own musical contributions to the constant tintinnabulation of the jingle bells.

     Sharon navigated the toy aisle, looking for red tags on the items that were on her list.  A Star Wars XI battle kit for Tommy; a Barbie beauty salon for Jenny.

     At exactly 10 a.m., a man ran into the middle of the crowded store.  He was dressed like any other shopper, but looked somewhat strange.  Nobody paid attention to him until he dropped to  his knees, put his hands over his head and then fell to the floor, as if he was exercising or praying. 

    
What a weird man.

    
One of the store workers came up to him and put a hand on his shoulder.  The man stood up.  He was smiling, but his forehead was covered in sweat.

     “Are you okay?”

     The man did not answer the worker.  Instead, he  lifted his arms to above his head, screamed, “Allahu Akbar!,” and ripped open his jacket.  Sharon was nervous.  He was acting too strangely.  She quickly turned the other direction and pushed her cart as fast as she could.  She was so scared, she was shivering.

     The smiling man pulled a cord on his jacket, and blew himself up.  The fiery blast ripped through the center of the store, sending shards of glass and chunks of debris ripping through Sharon, knocking her down and tearing her apart.  It slashed through the store, killing ten more people and injuring forty others.  There was a split second of silence after the blast, peppered with the moaning of the injured.  Seconds later, hundreds of panicked people, supercharged with adrenalin and fear, simultaneously ran as fast as they could to the exits, creating a frantic stampede.  The smaller ones and the younger ones simply fell under the feet of the raging crowd, which flowed with the force of a wild, roaring rapids, crushing the more unfortunate ones under their feet.   The mass crashed through the glass entrance and spilled into the chaotic parking lot, leaving behind another 48 victims in its wake.

     At exactly the same time, suicide bombers at the Walmart Supercenters on Park Plaza Drive in Manhattan, North Broadway Street in Chicago, Coral Way Shopping Center in Miami, Central Expressway in Dallas, Edgewater Drive in San Francisco, and Evans Avenue in Denver were hit with comparable casualties, and bombers in trucks filled with explosives took out three of the company’s major distribution centers.  War had been declared on the American economy.