Clawback (26 page)

The utility shed exploded.

One instant—I saw huge sparks, and flame and blast debris blowing out from the epicenter.

Then something struck the front of the car, and the airbags detonated. I was punched in the face hard enough to lose consciousness for a moment.

When I swam back a few seconds later, the bags had deflated. With no windshield, I had a nice clear view of the destruction still raining down in front of us. The utility building had half collapsed, metal and wood sticking into the air, while flames leaped from the transformer. The truck was crumpled against the loading dock, where it had finally come to rest, one door sprung open. Even as I struggled to get moving, a man lurched out of the cab and stumbled several steps.

Zeke grabbed my shoulder.

“Come on! Gonna blow!”

We ditched, scrambling out and running back the way we’d
come. At the building’s corner I glanced back. A fireball exploded from the wreckage, engulfing the Fusion and ticking our way.

The truck was on the other side. I could see it dimly through the white heat. Whether its occupants had escaped was, at least for the moment, irrelevant—there was no way for them to reach us through the inferno.

A hundred yards away we stopped. People were already coming out the front door, some running. Every single person we saw had a cellphone pressed up against their ear, shouting.

“Shit,” said Zeke.

“That was
too
fucking CGI.” I brushed grit from my face. “What the fuck were they storing in that shed, Tovex?”

“The transformers. Loaded with insulating oil, flammable as all hell.”

“I guess so.” I watched thick black smoke pour from behind the building. The first siren was just audible.

“Those guys—Saxon?”

“No. Not the two I saw. I think I recognized one from the attack on Clara, but not for sure.”

“Might be time to go.”

I took a moment to look him over, while he did the same for me—shock could make you unconscious of all sorts of injuries. We both seemed to have nothing worse than some scratches and grime.

“The car’s fucked,” I said.

“Good.” The more damage, the slower CSI would get anything useful out of it.

“Yeah, but I don’t think there’s a subway nearby.” I pulled out my
phone, and realized that I still had the earpiece in place. “Johnny? Are you still there?” The display indicated the call was still clocking, but I didn’t hear anything. I hit the red button and dialed a new number.

“Calling a taxi?”

“No, we’re going to have to walk.” I gestured, and we set off, trying to look normal, strolling through an increasing flow of gawkers headed inward. “I thought maybe I ought to report the Fusion stolen.”

“That’s courteous.”

“For Hayden’s sake—to keep him out of it a few extra hours.”

“Why bother? You said he was dirty.”

A second explosion boomed behind us. “Maybe you didn’t notice, but we’re kind of
implicated
right now. Let’s at least make a getaway before we go back to fucking with Hayden’s life.”

Zeke nodded. “Think the false ID will hold up?”

“Not unless we’re luckier than we deserve. But they might not be able to make a connection to me. Or you, for that matter.”

“Hope not.”

“What I can’t figure is, how did they notice us?”

“Sitting in the car all afternoon? Any dummy could have seen us from their window.”

“Maybe.”

We watched a police car make its dramatic entrance, lights and siren and horn all going. It was green and tan—must have been Chalder local cops. The first fire engine followed close behind, and then the rush started: staties, ambulances, unmarked Interceptors.
Overhead, helicopters began to appear, rerouted from their watch over the afternoon commute.

“You know,” said Zeke, “there’re times I’m happy to work for you for
free
.”

“That’s convenient,” I said.

“A
wesome.” Johnny leaned back in the cracked vinyl booth. “That is a literal description. I stand in awe of what you did.”

“You’re sitting.”

“I was standing when I heard, though.
Four hundred seventy
points off the Dow. Fucking amazing.”

Seven p.m. in Dan’s All-American, a little place down in Soho. Zeke had let me stay at his place for a few hours, to clean up, watch the news, make some calls. I even napped for an hour. But Zeke really
doesn’t
have electricity, so at six it got dark.

Zeke might have been fine with an oil lamp, but not me. He fell asleep before seven, and I arranged to meet Johnny. I’d drained one cellphone talking to Clara earlier, and at Zeke’s I couldn’t recharge the batteries. Obviously. Here in the diner I had it plugged in to one of the outlets Dan provides for laptop users.

“At least this time there’s a clear explanation for the crash,” I said. “So the market should come right back up again.”

“It hadn’t as of close. Volatility’s through the roof overseas, too. I think this one’s going to reverberate for a while.”

Johnny was practically rubbing his hands, like some gleeful Victorian. Traders love a high volatility index more than anything. So long as the market’s moving, up or down doesn’t matter.

It’s Flatland where the experienced guys go broke.

“It wasn’t just the sudden outage,” he continued. “Blacktail was running some sort of microarbitrage on a slew of old-economy dinosaurs. When you knocked them offline, they had something like six thousand open positions—that one instant!”

A lot. More than enough. Several of Blacktail’s major orders were for stocks in the actual Dow industrials index—which is only thirty companies, not the entire exchange. As they plummeted, panic set in, first as other traders’ automatic sell orders were triggered, then as humans started making split-second decisions to get out. Everything spiraled out of control even faster than last time, despite the array of system tweaks the regulators had put in place.

When a bubble bursts, no safeguards in the world can keep it inflated. No one should even try.

I watched Johnny bulldoze through his snack: pan-fried steak, sweet-potato fries and red gravy.

“You heard it start,” I realized.

“Mm-hmm.” His mouth was stuffed.

“On the phone. And I’d just told you I was outside Blacktail’s offices.” I started to laugh. “Damn, Johnny, you were in, weren’t you?”

“Twenty seconds.” He swallowed, drank some Nehi out of the bottle. “I heard the blast, and you yelling, and I figured—no way that’s a good thing. Maybe neutral, but certainly not good. I got in twenty seconds before everyone else started realizing that Blacktail had gone dark.”

It doesn’t sound like much, but in the hyperkinetic world of modern market flow, twenty seconds is an eternity.

“What’d you make?”

Johnny looked at me. “Tell you what, tonight’s on me.”

“Oh, come on.”

“Two point six.”

“For twenty seconds of trading.”

“Isn’t life grand?”

Outside young businessmen and women, leaving work, wandered toward the Soho bars. Dan’s was half full. A steady buzz of plates clanking and conversation and WPKN on the radio kept the background lively.

“Are they going to let you keep it?”

“That’s a good question. We’ll see.”

“I thought—after the flash crash and the last October surprise—they put policy in place. Sixty percent. Sounds like you exceeded that.”

Dominated by unregulated and totally out-of-control high-volume trading, all the markets—not just the NYSE—had become disturbingly unsettled in the last few years. Unexpected events seemed to occur more and more often, each time precipitating jaw-dropping swings in value. And it usually only took a few minutes, or even just a few seconds, for shockwaves to hammer through the entire universe of tradeable assets.

Instead of fixing the root problem—a simple half-percent transaction tax would have done the trick—the exchanges and the regulators tinkered with marginal solutions. One was to declare, arbitrarily, that any trade executed on a price swing exceeding 60 percent would be subsequently canceled.

“Sure, they put the rule in place,” Johnny said. “And about five minutes later every trader on the Street had reprogrammed his stops at fifty-nine percent.”

“You too?”

“What do you think? I mean, it’s like the state police announcing, in advance, every one of their speed traps. Of course I made the limits automatic.”

Although, in truly panicky situations, stop orders can miss by a mile. In the end, human intervention is always best, as I think Johnny was trying to tell me.

“It’s something to be proud of,” he said. “How many people can say they crashed the
total fucking market
all by themselves?”

“Ugh.”

“Hey, you’re not eating. How about some grits and gravy?”

Zeke and I had left behind a dramatic crime scene. Saxon’s operatives had apparently fled—or if they were talking, the cops were being remarkably closemouthed about it. I had no idea where VINs and registrations on the truck would lead, but the Fusion’s rental record was not obscured well enough to hold off the two hundred FBI agents reportedly on the case.

Trying to blow up Times Square is one thing. Taking down the foundation of American capitalism is quite another.

When they caught up with him, Hayden Pennerton was going to have some explaining to do.

“By the way,” said Johnny, “why are you even out in public?”

Good question.

“If my number’s up, my number’s up,” I said. But the truth was, I figured Zeke and I were still pretty well covered. At the airport
rental desk I’d worn driver’s gloves, a ball cap, the tinted glasses and another slug of Panzer cologne. The explosion at Blacktail would have burned off other prints, DNA, and so forth. The forces of order might get lucky, but we hadn’t posted suicide videos on a jihadist website or left behind a wadded-up utility bill or bought our guns a week ago in Virginia and signed our real names to the paperwork—which is how these cases always seem to get solved.

Unless Johnny was an FBI informant, it would be an uphill investigation.

Still, for a moment he almost looked concerned. “Maybe I shouldn’t be seen with you.”

“Dan doesn’t pay attention.”

“Dan died a year ago.”

“What?”

“Didn’t you know that? Some Korean family bought out the estate.”

Now that he mentioned it, I realized the food had improved lately.

“I didn’t cause the damage,” I said. “
They
were shooting at
us.
You want villains, talk to Blacktail.”

“Uh-huh. I’m sure the cops are.”

I pushed some hash around my plate, trying not to check the doors and windows too often or too obviously.

“I could use some help,” I said.

“Yeah? Judge Dredd time?”

“Well—”

“Kidding.” He raised his fork briefly. “Whatever you need.”

“See if you can find Blacktail’s fingerprints on any of the others.
Even Plank. I know he’s not dead yet, but there’s all kinds of action in the stock. Do you have any sources that can read the order flow?”

“That’s not legal.”

“Not realtime, for Christ’s sake.” I paused, realizing Johnny had not actually answered the question. “Wait a minute.”

“What?”

“Are you telling me you
do
have someone inside?”

“Of course not.” He looked at me, innocent. “If I did, I’d be retired. Motoring out to my private island on a three-hundred-foot yacht.”

True—or in jail. That was one kind of insider trading the SEC had a genuine zero tolerance toward.

“So ask around. See what you can find out. I need something to take to the authorities when I give myself up.”

“When’s that going to be?”

“Why, you want to be there?”

“Just wondering. You know.”

I watched him vacuum up the last of his grits. “You see a position, don’t you?”

“Well…”

“Why don’t you hire a band to dance on my grave, too?”

“No, listen.” He wiped his face with a paper napkin. “Suppose the DA announces they have a suspect in custody? In about ten seconds, everyone’s going to realize that means Terry’s out of danger. Plank Industrials will rebound, big time.”

“By ‘suspect,’ you mean
me
.”

“In fact, we might see a serious short squeeze.” His eyes got a
distant look. “I told you—one-fourth of the entire float has been sold short. If the stock price began to go up unexpectedly…”

He didn’t have to finish. Short investors had, in effect, sold shares in Plank that they didn’t actually own. If the price dropped further—as everyone expected would happen when Terry caught the Jackal’s bullet—these guys would simply buy some of the newly cheaper shares to close their positions, and pocket the difference as profit.

But if the share price rose, the value of the short position would decline, and then go negative. Brokers hate it when their clients are suffering losses, even only on paper, and they generally insist that the traders post additional collateral to cover the potential deficits. If the investor didn’t have cash lying around, however, he’d have to close out his position, by buying the now more expensive shares to cover his short sale. See what happens? The rising price forces more buying, which pushes the price higher, which squeezes more shorts to close—and so on, in a vicious cycle that can cause share prices to skyrocket. The greater the short interest, the nastier the squeeze, and the higher the price might go. Fundamentals become irrelevant.

The shorts get killed, always a big crowd pleaser. The stock price shoots upward, which delights management and regular shareholders. Trading volume is huge, making the exchanges happy. Win-win, except for the losers who’d gone short in the first place.

Johnny wanted in on the “win” part.

“I’ll think about it,” I said.

“I’ll cut you in for ten percent beneficial interest.”

I had to laugh. “That’s too cheap. Fifty-fifty.”

“You’re not putting up a penny!”

“No, but I’ll be the one getting Mirandized.”

“Twenty-five.”

A minute later we’d agreed on thirty, and I still wasn’t sure if Johnny was serious.