Terror on Wall Street, a Financial Metafiction Novel (13 page)

CHAPTER THIRTY SIX

BULLS AND BEARS

Harry looked out at the students in the auditorium and felt proud that, despite his memory loss, he had been able to complete the workshop.  There was one more lecture, to be followed by more work in the office.  He held the stack of index cards in his hands, took a deep breath, and started.

     “The great bull market of the 1980s and 1990s crashed in March of 2000, causing millions of investors to abandon the market forever. Those who did so had portfolios concentrated in a few high-tech stocks and Internet stocks. Similar episodes have occurred in the past, as evidenced by Tulip Mania, a Dutch speculative period around 1636.  In March 2000, after an 18-year bull market of absolutely astounding increases in prices, the market crashed and entered the bear market phase that took the broad indexes down by 49% or more and the Nasdaq Composite 78% lower. To date, although the market has rallied strongly, some stocks have yet to regain their highs.     

     “I doubt that investors have learned much from this experience. The lesson that you must learn is that the market goes crazy from time to time. During the crash that often follows these kinds of markets, you must continue your investment plan without fail. Such a plan should consist of a balanced selection of index funds based on your remaining time to retirement. Properly constructed, such a portfolio will not experience fluctuations as severe as a single broad market portfolio.

     “At a minimum, the portfolio will have a broad market index fund and a broad bond market fund. The percentage of each can be determined by your age. By way of example, it is often recommended that your allocation to fixed income securities should equal your age. A sixty-year-old would thus have 60% of his portfolio in fixed income securities and 40% in equities. There are index funds that will do all this for you which have had respectable returns over the last few years.

     “But, you’re talking about a ‘regular’ market crash, aren’t you?”

     “I don’t know what you mean by ‘regular,’ Mr. Thompson, but this strategy should survive even the so-called 'black swans' which have crippled the stock market.  It seems to always rise from the ashes like a Phoenix.”

     “But what about a total economic system failure?”

     “That, my friends, is something we cannot get through alone.  That’s why we are going to continue our work on prevention of such a collapse, and present it to the Senate Finance Committee.”

     The group stirred excitedly.

CHAPTER THIRTY SEVEN

COLONIES IN REVOLUTION

Gassed up and back on the road, although a little lighter in the wallet, Ike was feeling a lot less nervous.  They crossed over the Maryland border just as dawn broke.  Suddenly Snookie started a kind of speech, as if her “on” switch had been activated.

     “Maryland was one of the original thirteen colonies.  It’s one of the smallest states, but also one of the most densely populated.”

     “Where do you store all this information?  Are you hooked to a hard drive or something?”

     “It was a Union state during the Civil War, probably because of the large free black population at the time.  Maryland is the state with the highest household income in the United States, as well as the lowest poverty rate.”

     “I think we’ll need a reassessment on that figure,  given what’s going on now, Snookie.  Why don’t you see what you can get on the radio?”

     She fiddled with the knobs until a station crackled in.

    
The government has reacted with caution to the planned two million man march which activists have scheduled for tomorrow morning.  Activists seeking solutions to the current economic crisis have arranged to gather in front of the Washington Monument tomorrow morning to protest.

***

     As they crossed into Washington, D.C., it looked like a war games exercise.  Military helicopters ruled the skies above the city, and armored personnel vehicles patrolled the streets.  They stopped at a street blockade which was manned by a group of armed soldiers.

     “Looks like they’re ready for the two million man march.”

     Ike stopped and rolled down his window.  The soldier looked inside the windows while his partner walked around the car, checking it out.

     “Please state your business in Washington, sir.”

     “We’re attending a meeting of the Senate Finance Committee by invitation.”

     “May I see the invitation?  And some ID, please?”

     “Snookie, do you have a copy of the invitation?”

     “Of course, Ike.”

     Snookie reached into her briefcase and withdrew the invitation and handed it to Ike.  She took her ID out of her wallet and gave that to him, too.

     “Thank you sir and ma’am.  Enjoy your stay in the capital.”

     Ike drove on.  Their GPS was not working, so he asked Snookie to look up the address on the map.

     “It’s the Riviera Aparthotel on Capitol Hill.”

     “Here it is.  Turn right up here, on First Street, Northwest.”

CHAPTER THIRTY EIGHT

MOBILIZE

Ike, Snookie, Bob Brammon, Larry Thompson and Carlos Rodriguez sat in the waiting room of Harry’s office.  All had received an unusual summons asking them to be present.

     “Anybody want some tea or coffee while we wait?”

     “No thank you, Mrs. Mason.”  Ike smiled and shook his head.

     “Nobody?  Well, Harry should be here any minute.”

     About ten minutes later, Harry walked in with a gentleman dressed in a suit whose speckled dark brown hair showed he had earned his stripes, but was still somewhere short of 50.

     Carlos whispered to Ike, “Looks like a lawyer.”

    “Hello, group.  Thanks for coming.  I’d like to introduce you to Mr. Kenneth Grant, our attorney.”

     “Told ya he was a lawyer.”  Carlos nudged Ike.

     “Mr. Grant is going to help us prepare the legislation on campaign and lobby reform and term limits, which will be sponsored by our very own Congressman here in Chicago.  He’ll be working with each of you over the next few days.”

     “With us?”

     “Yes.  Senator Friedling has invited me to make a presentation on the economy before the Senate Finance Committee.  I’ve selected each of you to make a small presentation on your particular expertise before the Committee.”

     “To the politicians?”

     “Politicians are crooks!”

     Grant laughed at the bird, and it laughed back.

     “Yes, Mr. Brammon, to the politicians themselves.”

    
“Politicians are crooks!”

     “I can see that your parrot has his own ideas about the presentation.”

     “Well, Mr. Grant, I can assure you that he is not alone in this sentiment.  Now, who is in?”

     Ike and Carlos raised their hands immediately.

     “I’m in!” said Bob.

     “Me, too,” said Larry.

     “Ms. Baxter, what about you?”

     “What, what do I have to say?”

     “Recite the Declaration of Independence and the Constitution.”

     “I can do that.”

     “Yes, I should have known you could.  No, I was just joking.  You’ll be presenting portions of your thesis dedicated to solutions for saving the economy.”

     “I can do that, too.”

     “Then let’s get started.  We’ll break into two groups and we’ll use this office for our work area.  Ms. Baxter and Mr. Pendleton, you’ll work with Mr. Grant first, so be back here tomorrow at 9 a.m. with pencils and minds sharpened.”

     Carlos gave Ike a big wink and Ike flashed back a sour look.

     “The next group will be Mr. Rodriguez, Mr. Brammon, and Mr. Thompson.  All of you should get together and work on your assignments.”

     “What assignments?”

     “How to save the world economy, of course, Ms. Baxter.  Any questions?”

     Harry looked at the group, and they all remained quiet.

     “Good, then we’ll see you all here tomorrow morning.”

***

As Ike left Harry’s office with Snookie, he made another attempt at small talk, this time with a purpose.  Carlos, Larry and Bob followed close behind.

     “So, shall we head for
Faba Arabica
?”

     “Isn’t that a coffee shop?”

     Ike was taken aback. 
I thought everyone knew the campus coffee shop.

     “Well, yeah.”

     “I don’t really care for coffee.”

     “Snookie, it’s not for the coffee.  It's to study, to prepare our presentations.”

     “You can meet me in the library in an hour if you want.”

     “But we can’t talk in the library.”

     “What’s there to talk about?”

     Ike frowned in frustration.

     “Okay, I’ll meet you there.”

     Snookie left and Carlos grabbed Ike by the shoulders.

     “Shot down again!  Dude, you’re going for the all-time record!”

CHAPTER THIRTY NINE

THE REUNION

The next morning, Harry was pleased to see that his troops had assembled as directed in the lobby.  He was even more happy to see that Snookie and Ike were among them.

     “Ms. Baxter, Mr. Pendleton.  Glad you could make it.”

     “We’re glad too, professor.  We almost didn’t.”

     “Alright, we’re coming to the final stretch.  And this time, we have to be forceful.  The government will be looking for a quick fix, but there isn’t any.  They have – we all have – some hard choices to make. 

     “I’ve examined your reports thoroughly.  You’ve done very well.  I want to thank you all for your contributions.”

     Everyone beamed back, except for Snookie.  She knew they had done a good job.

     “This isn’t just a garden variety committee hearing.  It’s going to be televised to millions of people.  So remember: we have to be informative, but also entertaining.”

     “Entertaining?”

     “Yes.  Even in crisis, people need entertainment.  The senators are going to try to hang on to their power.  And that power relies not on the rich companies who stuff their bank accounts with cash, but on the voters.”

     “Yeah, and they are one pissed off bunch of people!”

     “They certainly are, Mr. Rodriguez, but ultimately this is all their fault.”

     “How can it be
their
fault?”

     “They had the power in them all along to get rid of these ne’er-do-wells, but never exercised it.”

     “So we have to show them that they still have the power?”

     “That’s right, Mr. Pendleton.  We’ve all learned about what put us in this crisis.  Now it’s time to show it to them.”

     “Show me the money!”

     “No, Mr. Rodriguez.  Show me where the money
went
.”

CHAPTER FORTY

GROUP EFFORT

Kenneth Grant sat behind Harry’s desk dressed in a sweatshirt and jeans, with a mass of paper spread out in front of him.  Professor Mason sat in one of the chairs facing his desk.

     “I think this is the first time I ever sat on this side of my desk.”

     “Don’t worry, it’s only temporary.  There’s no way I could fill your shoes.”

     “Nor I yours.”

     Jackpot made a “knocking” sound and excitedly skipped back and forth on his perch.

     “That must be Mr. Pendleton and Ms. Baxter.  I’ll be right back.”

     Harry walked into the ante room and opened the door for Ike and Snookie.

     “Come in, come in: you’re right on time.”

     Harry showed them in. 

     “Hello, Mr. Grant.”

    
“Hello, Mr. Grant.  Hello!”

     “I see you’re informal today, Mr. Grant.”  Ike nodded to Grant.

     “Yes. I didn’t want to soil my suit doing the dirty work .”

     Ike, Snookie, and the professor sat down in front of Grant and they got to work.

     “I have written several drafts here, produced with the help of your professor, made over many months.”

     “Yes, but we wanted to get your input.  You are the young people who are going to inherit this mess.”

     “Well put, professor.  Now, this legislation proposes sweeping amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Act, the Federal Reserve Act, the Lobbying Disclosure Act, the Ethics Reform Act, and the Federal Election Campaign Act. It revives the Glass-Steagall Act and a Constitutional Amendment limiting Congressional terms.  That is a lot for the Congress to bite into.  But, so far, the hardest part of all has been what to name the proposed bill.”

     “Why not an acronym?  Like the
PATRIOT Act
.  Politicians like those.”

    
“Politicians are crooks!
“Jackpot squawked.

     Harry rubbed his chin.  “I was thinking of something more simple, and not deceptive.”

    
“Politicians are crooks!”

     “What about the
Save the World Economy Act
?

     Harry smiled.  “I like it.  What do you think, Ken?”

     “Sounds good.  Direct and to the point.  Now that we have that out of the way, I want the two of you to read over the proposed legislation and, when we reconvene, let me know what you think and if there is anything you think should be added or edited, from the perspective of your areas of expertise.”

***

After Snookie and Ike had left with their homework assignments, Carlos, Bob and Larry returned with their own completed work. 

     “Well, Mr. Rodriguez, you’re first up.”

     “Thank you, professor.  I’ve made a few notes, especially on this new Glass-Steagall Act.  From a free market perspective, it is my personal opinion that if the Federal Reserve didn’t mess with the interest rates, the banks wouldn’t have delved so heavily into derivatives.”

     “We understand that, Mr. Rodriguez, but we can’t reinvent the wheel.  This is going to be a lot for the Congress to swallow, even on the deck of a sinking ship.”

     Grant leaned over the desk.  “And we can also expect this to be amended, watered down and eviscerated by Committees.”

     “I understand, but I think we need to concentrate on limited government guarantees of loans and bank bailouts.  We need to break up these big banks and let them regroup without government assistance.”

     “I don’t that’s going to happen, Mr. Rodriguez.”

     “Still, he raises a valid point.  Let’s look at his notes, Harry.”

     Harry nodded.  “Mr. Brammon?”

     “I think we should require all brokers to be, at a minimum, registered investment advisors.”

    
“Brokers are crooks!”
Jackpot danced on his perch and screeched.  Harry laughed.

     “That is an excellent idea, Mr. Brammon.”

     “Yes, but with the powerful securities lobby, I’m not sure it will fly,” said Grant.

     “What about minimum education, stricter tests for competence, and the imposition of fiduciary duties?”

     “We may be able to push that,” said Grant.

     “What do you think the bill needs, Mr. Thompson?”

     “I think we need sweeping changes in the way appointments to agencies are confirmed.  The business of revolving door politics has to stop.”

     “That’s something Mr. Pendleton has been working on with regard to campaign contribution limitations. You may want to coordinate with him.”

     “I will, but my initial notes here emphasize the need for proposed administrators of federal agencies be conflict-free before their appointments can be approved.”

     “That’s a reasonable proposal.  I think we can push that one through,” said Grant.

     “Very good, Mr. Thompson.  I knew I picked the right group.”

     Jackpot made a noise like a key turning in a lock.

     “Are you expecting someone?”

     “Probably my wife.  Jackpot is the world’s best alarm system.”

     Jennifer opened the door and came in.

     “Hello, everybody.

    
“Hello, everybody, hello!”

     “Harry, it’s late.  Haven’t you seen the time?”

     “I think we’ll work through the evening, if that’s alright with everyone.”

     Everybody nodded in agreement.

     “But you need to at least break for dinner.  You can’t save the world on an empty stomach, you know!”