engines: they’ve sunk without a trace. Everything we’ve done has vanished.”
Reference to diesel engines was strategic. The bulk of the Mandible money was amassed by Carter’s great-grandfather Elliot, a Midwestern industrialist. Douglas had added to the pile a bit, but he’d always lived high, and Mimi extracted a fair whack of his agency earnings in the divorce. The inheritance from Mandible Engine Corp. was protected from marital depredations by a trust. So if Carter hadn’t earned the cash to which he should soon be entitled, neither had his father. It pleased him to underscore that Douglas was a mere fiduciary caretaker, another undeserving beneficiary of capitalistic injustice.
Douglas expressed a sudden frustration with preparatory social niceties by rising with some difficulty for another finger of bourbon. Bad sign. He never drank before 8 p.m. “Since you were a journalist, you’ve been following the news?”
“Insofar as it’s possible, with no in-depth coverage, no fact-checking—”
“The end of the New York Times,” Douglas said patiently, “was not the end of the world. We all miss it, Carter. But it became a shadow of its former self.”
“Meaning when I worked for it.”
“Tetchiness doesn’t suit you. Aren’t you over seventy?”
“Not yet.”
“But old enough to realize that the end of the world takes place on rather a larger scale. As you must have begun to appreciate. Quite a week!”
“Well”—Carter took a deep breath—“with the stock exchange shut down, I guess you’ve had something of a vacation.”
“If having the federal government deny you access to your own accounts—scarcely different from being locked out of your own house—well, if that’s your idea of a vacation, yes. It’s been all beach umbrellas and boat drinks.”
“And do you know, ah—I mean, ballpark, what kind of a hit you’ve taken?” His father played his financial cards close to his chest. Carter had no idea of the size of the portfolio, down to the number of zeros.
“Use your head. Trading closes automatically once the market dives a set percentage or point drop. The SEC hasn’t deigned to re-open the Exchange since the Level 3 circuit breaker kicked in on Thursday. It doesn’t take much imagination to picture what will happen to the market when they do. I’m sure the SEC has pictured it. So whatever the values at which stocks left off are academic. The question is not what they are worth, but what they will be worth three seconds after the bell. Imagine all those investment-bank computers primed at the starting line—with which my poor fleXcreen can’t compete. Of course, one could argue that the value of assets to which you are denied access, perhaps indefinitely, is zero.” Reseated at a jaunty angle, Douglas had assumed a whimsical demeanor. He seemed almost pleased.
“One could argue?” said Carter. “Or that’s what you’re saying?”
“One could also argue,” Douglas continued with an infuriating mildness, “as a contingent on the web is already promoting, that this is an extraordinary and irrational hysteria from which the market will promptly bounce back. After a historically unprecedented dip, about which academics like your son-in-law will produce miles of trying analytical text, the dollar and the market may both more than recover. In which case, the next month or so could provide a once-in-a-lifetime opportunity to buy low and sell high. With a bit of leveraging, investors swimming against the tide could easily grow their holdings by three or four times.”
This was not the multiple choice for which Carter had made this journey: his father was (a) destitute; (b) rich and about to get a whole lot richer; (c) somewhere in-between. Thanks.
“They’ve put limits on withdrawals, you know,” Carter said sulkily. “I can’t get more than three hundred bucks from an ATM.”
“They’re afraid of more bank runs. By trying too hard to prevent them, more bank runs are exactly what they’ll get—should they ever be so imprudent as to let you at your own money again.”
“The Fed chief was emphatic. Krugman said the limits were for a few days, max.”
“Anyone in a position of authority telling you something unpalatable is ‘temporary’ is a red flag. The quick fix of capital controls can seem so alluring: ‘We’ll simply make the rabble keep their money here. We’ll pass a law!’ The hard part is lifting capital controls, which becomes unthinkable the moment they’re instituted. Who wants to keep funds in a country that confuses a bank account with a bear trap? The moment you remove the constraints, the nation is broke. So you can be sure that at least the freeze on making monetary transfers out of the US will stay in place for some time to come. Look at Cyprus. The capital controls levied in 2013 weren’t entirely rescinded until two years later. Know how long those controls were meant to stay in place at their inception? Four days.”
“But this is the United States. Here, they can’t—”
“They can. And will. There’s nothing the Fed can’t do.” Again, this cheerfulness. Douglas fished a steamer from an inside pocket. The family patriarch was once a two-pack-a-day smoker, and Carter blamed electronic cigarettes for the man’s now-catastrophic longevity. The e-bacco emitted a teasing scent of French vanilla.
“Why do you seem to find this debacle so entertaining?”
“What does it matter if I’m entertained? After all, wasn’t it interesting,” Douglas supposed, stabbing the air with his stainless-steel wand like a Philharmonic conductor, “when the ECB, Japan, the Bank of England, and the Fed banded together to intercede the day after the rate spike, and all that doing ‘whatever it takes to support the dollar’ backfired? Traditionally, investors bow to the inevitable when central banks move in. But rampant purchasing of US securities meant the Fed was conjuring up yet more money out of thin air to buy the bonds. Which is why the dollar tanked in the first place. Made the fire sale of the dollar infinitely worse. I love it when by-the-book remedies don’t work the way they’re supposed to.”
“But you don’t seem the slightest bit upset! Is it because you’re practically a hundred? And there’s not much time left for you? Because not only am I planning to stick around a few more years, but I have kids, and they have kids—”
“Right now, every major stock exchange in the world has halted trading. It’s relaxing. You should enjoy the respite. Because Quiet Time won’t last.”
Finally Carter plunked into the adjoining armchair, doubling his chin on his clavicle with a scowl. He should remember: for the time being, he and his father were on the same side. “Economics isn’t my bailiwick. I don’t understand this ‘bancor’ business. The American news coverage is so hostile that I can’t make heads or tails of it. Guests on CBS just start shouting.”
“I suspect it’s a good idea—if it was not a good idea for Putin to roll it out.”
“At least these days Mr. President for Life keeps his shirt on.”
“I’m intrigued by how a whole new international currency was ready to go. Not the sort of thing one works out on the back of an envelope.”
“Maybe I’d expect a financial putsch from Russia and China,” Carter said. “But this coup is by US allies, too. Okay, not Europe—and never mind them—but the Saudis, the Emirates, Korea—after the tens of billions we shifted to
