Trigger Point (22 page)

‘Then he wants to do it with Apaches? Pete, where are you on that?’

‘We could do it. We’ve done the planning.’

‘And the LRA, they have the wherewithal to take out any of these machines?’

‘We don’t think so, sir.’

Hale looked back at Gary Rose. ‘There you go.’

‘Well, Admiral Pressler’s the operational commander,’ said Rose. ‘I don’t want him to think there’s any kind of political pressure. I hope that’s clear. Admiral, this is obviously your decision.’

‘Pete, how quick could you do it?’

‘The planning’s done,’ said Pressler. ‘We could do it tomorrow. We’d go in at dusk, to maximize their difficulty in regrouping after the attack’s done. We just need the go-ahead.’

‘Well, I think what Dr Rose is saying,’ said Oakley, watching Rose’s face as he spoke, ‘is that if you say you can do it with Apaches and get a significantly better result than with drones, the president will okay it. Is that right, Gary?’

The national security advisor nodded. ‘I would think that’s right.’

31

THE FULL NATIONAL Security Council was in attendance, both its civilian and military representatives. Ed Abrahams and a number of key White House aides were seated around the room as observers. The president’s objective was to understand what lay behind President Zhang’s behavior and what he should do about it.

He asked Susan Opitz to kick off by giving a summary of the events leading up to the failure of Fidelian Bank and the financial aftermath in the four days that had followed. Her account was succinct – it made for pretty grim listening, and the brevity didn’t lighten it. The last three days had been the three worst on the markets since Knowles took office. Tuesday, the day of the midterms, had seen the steepest fall in a single day since 2014. Interbank lending was almost at a standstill and a number of banks remained solvent only because of the cash available under the extraordinary liquidity facility that the Federal Reserve was providing.

The president then asked Ryan Ferris, the director of national intelligence, to provide his assessment of the rationale for Zhang’s behavior. There was nothing to be gleaned from Chinese media and blogosphere sources, Ferris said. As far as could be gleaned from contacts within the regime, the balance of power remained as it had been. There had been no policy change, as far as they were aware, in relation to the US.

He asked if anyone else had preliminary remarks. John Oakley wanted to know what effect the rumors about the president’s call to Zhang were having on the markets.

‘They inject uncertainty,’ said Opitz. ‘Uncertainty creates volatility.’

‘When you analyze the timing of the market movements over the course of the week,’ said Marty Perez, ‘what’s clear is that it wasn’t the Fidelian bankruptcy alone that pushed the markets through the floor. It was the rumor that a deal was rejected that really crashed them. Then when the rumor came out about the president having spoken to Zhang, there was no resistance left.’

‘Don’t we think the market’s overreacting?’ said the vice-president skeptically. ‘Does the Fed really need to be doing all this stuff?’

‘Yes, sir. It does.’

‘Feels like you can create a panic just by doing too much.’

Marty Perez didn’t think much of the vice-president’s grasp of economic policy. ‘The Fed’s doing exactly what it needs to be doing,’ he said. ‘If anything, it needs to be doing more.’

The vice-president raised an eyebrow. It was his usual gesture when he didn’t believe something but was so far out of his depth that he couldn’t think of even a half-sensible way to challenge it. His raised eyebrows were a standard joke amongst White House staff.

Knowles gazed at the notes he had jotted down while Opitz was speaking. ‘So the fear driving what’s happening now, if I understand what’s been said – and particularly to your point, Marty, about the timing of the stock falls – is that the Chinese government purposely pushed Fidelian into bankruptcy. Is that correct?’

‘Yes, sir,’ said Perez. ‘The question everyone’s asking now, is who else are they going to do that to?’

‘How large is that risk? Do we have any idea?’

‘We don’t have exact numbers. We estimate China to be holding between one and a half and two trillion dollars in foreign reserves. The funds available to their three largest sovereign investment funds is in the region of another one to one and a half trillion. You can add another one and a half to two trillion in the wealth funds of Saudi Arabia and the Gulf States and three, four hundred billion in Russian wealth funds if you want to look at other countries that have significant stakes in our markets.’

The numbers were ridiculous. Tom Knowles had no idea where to even start with them. How did they ever get into that situation?

‘Marty, you’re not saying all of that money is in US stocks,’ said Rose.

‘No. I don’t believe anyone has done an analysis of that. But whatever the number, it’s large. If that concentration is used in a purposeful fashion, is it enough to move our markets? Absolutely.’

‘Well, can we at least get the number?’ said the president. ‘Can we at least have one or two facts?’

Perez nodded.

‘Okay. Now, I told Zhang exactly what was happening. So on the face of it – unless we believe he couldn’t influence the PIC, which I don’t think anyone believes – he’s done this in full knowledge. Before we assume that, have we got
any
evidence that says he didn’t?’

There was silence.

Ryan Ferris shook his head.

‘They’ve never behaved like this before,’ said Perez eventually. ‘That’s the best I can say. All these are funds set up by countries running huge surpluses – some of which, at least, like the oil-exporters, can’t expect those surpluses to last forever – and it makes perfect sense that they want to put that money to work. The line has always been that these are commercial investments made for commercial profit. That’s always been China’s line as well and as far as we’re aware their behavior in the past has always supported that.’

‘And they would have lost a hell of a lot of money on Fidelian,’ said Opitz. ‘That argues against it as well, but then we know they could have made that up in any number of ways.’

‘Anything else?’

No one replied.

‘Mr President,’ said Bob Livingstone. ‘It’s clear that President Zhang could have stopped this and didn’t. If that’s the case, the question is whether he anticipated what’s happened.’

‘What the hell else would he have anticipated?’ growled John Oakley.

‘He may not have expected things to go as they did.’

‘You think he’s some kind of idiot?’

‘No, John,’ said Livingstone, ‘I don’t think he’s some kind of idiot.’

‘Sounds like you do.’

Livingstone clenched his jaw. He hated dealing with Oakley. The defense secretary was a bully and was particularly aggressive towards him. Gary Rose, at least, would engage in a more or less civilized debate. Livingstone didn’t know why the president valued Oakley’s opinion so much.

‘Mr President,’ he said, ignoring Oakley, ‘I’ve had my people do some thinking on this. I hope you’ve had time to look at the paper I sent over.’

‘I looked at it,’ said Gary Rose. ‘I don’t think you can interpret Zhang’s actions as anything other than a purposeful decision to let this bank fail.’

‘I agree. What I’m saying is that he may not have anticipated the level of impact it’s created. His advisors may not have led him to expect it.’

‘But I told him,’ said the president.

‘And he may have thought you wouldn’t let it fail.’

‘I told him it was a final offer.’

‘Sir, we know he let it fail. The question is, did he do it
in order
to create the problems that he created, or did he do it thinking that whatever would happen, would happen, and it wouldn’t be too bad? That’s a subtle distinction but it’s an important one.’

‘Is it?’ demanded Oakley. ‘Even if it means screwing around with our election? Give me a break! He knew exactly what he was doing.’

‘Bob, what are you saying?’ said the vice-president. ‘This is some kind of
Fuck You
message from Zhang? The president of the United States gets on the line to ask for help and he’s saying
Fuck You
to him, whatever will happen will happen? That’s what you think he’s doing?’

Those weren’t exactly the words Livingstone would have used. ‘You could put it like that.’

‘Hell.’ Stephenson glanced at the president. ‘What the fuck does he think he’s doing?’

‘If it’s a
Fuck You
message,’ said the president, ‘what’s it about?’

‘The usual things,’ said Livingstone. ‘Plus now there’s Uganda. Personally I think it may be South Africa. They’ve been asking us to give them time to work things out with the ANC but it’s pretty clear the Brits are going to push their resolution and we’re not doing anything to stop them.’

‘I’m not going to stop them now.’

‘Like we’d let them tie up South Africa’s resources for the next thirty years,’ said Rose.

‘Exactly. Like I’m going to let him get what he wants after all this.’

‘The other possibility,’ said Livingstone, ‘is that this is playing to some kind of internal, domestic agenda of Zhang’s we’re not aware of. I’ve covered some possibilities in the paper.’

‘Why now?’ said Gary Rose.

‘Something many have happened.’

‘Do you know of anything?’ asked the president.

‘Not specifically.’

‘Ryan?’

The director of national intelligence shook his head. ‘As I said, we haven’t got any information about a change from the status quo. It’s all stable as far as we’re aware. Zhang, Fan, Xu. It’s the usual setup.’

‘What if this is part of some kind of power struggle between them?’

‘What difference would it make?’ said Rose. ‘Even if Zhang is playing to an internal agenda, or if Fan’s constraining him, what they’ve done amounts to interference in our political process and a huge disruption to our economy. We can’t allow other leaders to do stuff like that for their own domestic purposes. And remember, Mr President, you talked to him. It wasn’t like he had no idea.’

‘With respect, sir, the motives matter,’ said Livingstone.

‘Not from where I sit,’ said Opitz. ‘Whether he purposely wanted to crash our markets, or whether he was saying
Fuck You
for the hell of it, or whether he was doing some internal maneuvering for whatever reason, the market’s made up its mind. All they care about is the fact that the Chinese government made a choice to let Fidelian fail. With a bailout on the table, they interpret that as a financially irrational decision, therefore it must be political. If the market thinks it’s political, it
is
political. Which means we need to deal with this politically. And right now it doesn’t matter what we say. We won’t be believed. There’s only one person who can put this thing to rest. The markets are not going to settle until they hear from Zhang’s own lips that he’s not going to mess with them again.’

There was silence.

Knowles looked around the room. ‘Do we agree with that?’

‘I think we do want to understand what he was trying to do,’ said Livingstone.

‘I’m not saying we don’t,’ said Opitz. ‘But that’s secondary, Bob. The primary thing now is we have a bunch of markets that, frankly, are as skittish as a cat on a hot tin roof and there’s only one thing that’s going to calm them down.’

Tom Knowles drummed his fingers on the table. He had already been dependent on Zhang once and look where that had got him. He didn’t feel much like giving him a chance to say
Fuck You
again.

‘How do we go about doing this?’ he said curtly. ‘Do I have to talk to Zhang again?’

‘Sir, Zhang already knows your concerns on this,’ said Rose. ‘Possibly we may have more effect if he gets some advice coming to him from another direction.’

‘I could talk to the Chinese finance minister,’ said Opitz.

‘I think this should come from State,’ said Livingstone.

‘Mr President,’ said Rose. ‘It’s really a financial issue. I think advice coming from the finance minister would be a better idea.’

‘I know Bai,’ said Opitz. ‘I can talk to him. Zhang depends on him for his economic advice. If Bai tells him it’s important to say it, there’s a good chance he will.’

‘I think they’d expect it to come from State.’

‘We can’t have two of you talking to them,’ said Knowles impatiently. ‘Susan, you do it. See what happens. That alright with you, Bob?’

‘I do really think this should be something that comes out of State.’

‘Well, get coordinated. Susan, you talk to their finance guy. Bob, make sure Susan knows what she has to know from State. What we’re looking for is a statement from Zhang that they had nothing to do with the bankruptcy of Fidelian. Something like that? Is that what we want?’

‘Something like that, sir,’ said Opitz. ‘Something about not doing anything in the future. We’ll figure it out.’

The president shook his head. ‘I don’t like going to them like this. I don’t like it one little bit. Anyone think there’s another way? John, what do you think?’

Oakley shrugged. ‘We can ask him, but I wouldn’t bet too much on the chances that he’ll help us. Still, it’s useful to the extent that it’ll flush him out. I don’t know what you’re going to say to him, Susan, but whatever it is, let’s not leave any room for him to miscalculate. Then if he makes the statement, fine. If he doesn’t, we know what he’s really doing, and all this stuff Bob’s been saying about Zhang miscalculating, we know it’s wrong. But we’ve got to do this quiet. Hell knows what it’s going to look like if some reporter gets hold of this and says we went begging to Beijing for Zhang to say it ain’t so.’

Knowles nodded. ‘Can we do something about these damn leaks?’ He glanced impatiently at his chief of staff. ‘Roberta? Huh? Can we do something about it?’

‘We’re looking into it.’

‘This stays quiet,’ said Knowles, looking around the table. ‘This stays dead quiet. Bob, you work on this directly with Susan. I don’t even want your staffs involved. And Susan, be careful the way you talk to the Chinese. Let’s not look like we’re begging. If we get into a situation where we have to release a statement of what you said, let’s make sure it looks strong. We need to make it look like we’re giving them a chance to say no.’

‘Like we’re doing them a favor,’ said Oakley. ‘Which we are, because after what they’ve done, they don’t even deserve that.’

The president nodded. ‘So Bob’s going to work with Susan and she’s going to talk to whoever it is …’

‘Bai, sir.’

‘Susan’s going to talk to Bai and get something out of that bunch of fraudsters in Beijing to say they didn’t set this up. Is that right? And if they don’t say anything, then like John said, we know they did.’ Knowles paused. ‘Okay. Anything else? Thank you.’

He got up. Ed Abrahams walked out by his side.

‘This is a godawful situation,’ he muttered when they got in the elevator. ‘Just a godawful damn mess.’

‘I think we’re on the way to getting it under control,’ said Abrahams.

‘I hope we are.’