Analysts have different names for economic issues that negatively impact the world’s economies,” Esther said, her face angled so that it appeared she was looking straight at both Suzie and the nearest camera. “They generally prefer names that sound explosive. Blasts, IEDs, barrel bombs. After the tidal wave that struck Japan, such events were called tsunamis. Over the past couple of years, a new name has come into vogue.”
They had made the announcement about Brazil defaulting on its national debt forty minutes earlier. Suzie and Esther spent five minutes doing a quick overview of what this might mean. Then they took a break. It was now coming up to the opening of the American markets, and they were back for round two.
“Black swan events,” Suzie offered.
“Correct. The name was penned by a Lebanese American economist, Professor Nassim Taleb. It refers to the assumption during the era of Victorian explorers that all swans were white. But then a black swan was discovered in Australia. In finance, the term refers to a totally unexpected event that upends the assumptions underpinning markets.”
Suzie said, “Please explain to our viewers why this is so important.”
“A black swan event carries the potential to create utter havoc. Never has this been more probable than now. Remember what I said earlier. In order to stay ahead of the electronic game, e-traders have already set their algorithms in place. These computer-driven trades are linked to very tight boundaries. If the markets appear ready to shift outside these parameters, it puts these electronic trading orders into motion. Once that occurs, the speed is beyond our human ability to halt the process. A landslide is inevitable.”
Suzie leaned forward. “If the markets only appear to shift.”
“Correct. Computer algorithms cannot tell the difference between appearance and reality. This means any activity that seems to indicate a crisis will be treated as a crisis.”
They were seated behind a slightly curved desk, so she and Suzie could face each other as well as the cameras. The wooden desk was empty except for two mikes on stubby stands, similar to the ones formerly used on the Larry King Live show, and a pair of coffee mugs. Esther’s contained green tea. Her stomach would not accept any more acid. During their first break she had tried to eat a bagel and barely managed to get down a few bites.
Technicians still worked setting up more trading desks. But six were functional now, four of them staffed by Jasmine and her three traders. They worked the phones and the e-markets, establishing positions for Esther’s new fund. Beyond them and to the right sat Craig, his desk piled with the forms required by the SEC for registering such trades. Many hedge funds used legal loopholes to avoid disclosing their ongoing positions. Esther considered that just another symptom of a critically ill trading system. At the desk beside Craig, Lacy typed furiously, feeding onto the website each transaction as the paper was passed to her by Craig.
Technicians scrambled around the perimeters, laying cable and unpacking more workstations. Suzie had insisted they go ahead and film from their new positions with all this activity taking place behind them. Esther liked how the scene added to the dramatic tension of the moment. They were not just sitting back and playing observers. Instead, she and Suzie McManning were deeply involved in the unfolding events, entrenched in the action. Today’s tension was good.
Lining the far wall were three large flat screens. As they talked, the third went live, bouncing from matte gray to a display of the South American markets. Suzie said, “It is now fifteen minutes to Wall Street’s opening bell. Let’s take a moment and examine the current electronic positions. Esther, it looks to me as though the Brazilian markets are stable.”
“They’re not stable, they’re static.” Their desk was backed by a low credenza. On it, five flat screens had been lined up like electronic soldiers. Esther traced her hand along the graph representing the morning trades. “A static market means far more than an absence of movement. This signifies an unnatural break in the action. What you see here is only a fraction of the normal number of electronic trades.”
“Everybody is waiting,” Suzie said.
“Right. The trading divisions of major investment banks are holding their collective breath, like runners on the starting block. All they need is the gun to set them off.” Esther turned from the unchanging screen. “Right now the intel we shared this morning is nothing more than rumor. Traders around the globe are waiting for confirmation that our information is on target. When that happens . . .”
Suzie started to ask her to complete the sentence. But the simple fact was, at this point, Esther couldn’t. She gave her head a fractional shake, just a single but faint tremor. But Suzie was alert and they were in sync. The newscaster caught herself and turned to face the camera. “We’ll be back after a short break.”
Five seconds later, the cameraman said, “And we’re off.”
Chuck came down the stairs from the production booth and said, “Every major network has carried a report of our announcement. Most name you specifically.”
“What’s our next topic?” Suzie asked.
Esther rose from her chair. “I don’t know.”
Chuck jammed his glasses up his nose and stared. “You don’t . . . What are we supposed to do now?”
“We wait.” Esther walked between the cameras and left the studio. She knew what they were thinking. That perhaps she had it wrong. Maybe the markets would use this announcement and stabilize. Yet she knew this wasn’t going to happen. It was more than knowing about the hit men. It was more than Hewitt’s news about the banks’ secret trading arm in Bermuda. It was more than the current tumult. She felt certain that her worst-case theory was correct, but she could not go public. Not yet. She needed one more piece to her puzzle, one more item. She was an analyst. She did not deal in half-completed investigations.
Esther stepped into the empty makeup room, shut the door, and leaned her head against the mirror.
“Come on, Hewitt,” she muttered. “Talk to me.”