Chapter 20: When the Time Comes

November 3, 1983, Chicago, Illinois

"I need a favor," I said to Noel Spurgeon on Thursday morning.

"It has to be about your wife; otherwise you wouldn't ask."

"It is. We've basically reached the end game."

"I'm sorry to hear that. What favor?"

"Keiko would like to spend some time together, and she'd like it to be at the American Club in Kohler, Wisconsin. She indicated that the resort is always booked solid."

"What dates?"

"Based on her medical appointments, November 14th to November 17th."

"Let me make some phone calls; I should be able to make that happen."

"Thank you."

"Keep up the good work, Kane. And let me know if there is anything you need."

"I will. Thanks again."

I left his office and returned to 29, where I saw Jack going into the new space. I decided to check on the progress, as we hadn't spoken about it in a week, so I followed him.

"Morning, Jonathan," Marcus Washington said when I walked in.

"Morning. Just having a look; don't mind me."

I looked at the space and listened as Jack and Marcus discussed the minor delay related to the wiring for the network, but because they had built a few extra days into the schedule, they still planned to make the target completion date.

"The only tricky part," Marcus said, "is the additional inspection required for low-power wiring. I think we can get the same inspector to do both when he's here, but this being Chicago, you can never be sure."

"Jonathan, would a delay cause you any problems?" Jack asked.

"None that I can think of. And I'll cover things with Mr. Spurgeon if that happens. I changed the specs part way through the job."

"Thanks," Jack said. "I appreciate it."

"You're welcome," I said, then left to return to my desk.

I checked the news and actually laughed out loud when I saw President Reagan's response to the UN statement on Grenada. The UN General Assembly had, by a lopsided 108 to 9 vote, stated that the invasion was 'a flagrant violation of international law', to which Reagan, when asked about the vote, had replied, 'It didn't upset my breakfast at all'.

That more or less put the cherry on top of the analysis that my team and I had provided, saying that, literally, nothing would come of the invasion. Reagan had, in effect, 'gotten away with it' in a fashion similar to how the Soviets had 'gotten away' with shooting down KAL 007. There were deeper ramifications, of course, but in the scheme of things, neither mattered with regard to the financial markets and had been, as John Peters had jokingly stated, 'a fart in a hurricane'.

That said, the world was on a hair-trigger, and a wrong move by either side could lead to nuclear war, something I didn't really want to countenance. On the plus side, that result would render all of our work and projections meaningless, and it was unlikely any of us would survive the MIRVs targeted on Chicago, which hosted two important Navy facilities — Glenview Naval Air Station and Naval Recruit Training Command, Great Lakes. Those, plus the important financial markets - CBOT, CME, and CBOE — plus major banking and retail interests, along with the government research facilities in the Western Suburbs, guaranteed we'd be taken out in the first strike.

What mattered, in the end, was just how close we could come to 'DEFCON 1' without destroying the world and what that might look like for foreign exchange, precious metals, equities, and fixed-income securities. Each level of risk created a different set of relationships between asset classes, with higher risk increasing precious metals prices and reduced risk being best for equities. It was the nuances of those calculations that would make us real money, as everyone knew that general idea.

I made some notes about additional factors to include in my global stability analysis, tweaked a few parameters in the spreadsheet, and then ran a regression, which showed my new model was slightly more accurate but still off. And it was in those 'off' areas that most of our profits would lie — when the market didn't follow the obvious factors. If we could find any correlation, that would give us a huge advantage over our competitors or help us maintain it as they began to catch up.

One thing I'd noticed was that because the vast majority of our trades went out 'over the wire', as it were, several smaller funds had done their best to track our moves, relying on that public information. The only way to stop that was to trade privately, in what had been referred to as 'dark pools', where public reporting was not necessary unless we took a controlling interest in a publicly traded company.

SEC Regulation 19c3, promulgated in 1979, had allowed licensed individuals and regulated firms to trade listed securities 'off exchange', and thus away from prying eyes. By keeping the transaction private, it had no direct market impact and also disguised moves being made by financial services firms such as Spurgeon and large banks.

Spurgeon occasionally conducted trades via those so-called dark pools, but the FX desk generally could not use them, nor did it have much need for them, as currency transactions could be kept completely dark by simply trading directly with the counterparty rather than going through an exchange or dealer. That was the norm, though, in the case of attacks on currencies, where we wanted it known to create the 'dogpile' effect, we traded on the open market. We had used that strategy to good effect against the Philippine Peso and the Zaïre, and it was now starting with regard to the Australian dollar.

I spent the entire morning and part of the afternoon tweaking my global risk model, with most of the tweaks resulting in worse results. Per Bianca's instructions, I kept careful track of what I changed and the results, including the regressions, so that we could analyze them to see if we could find a correlation between the failures, not just the successes, as that could provide further insight.

At about 2:15pm, my phone rang.

"Research; Kane."

"Mr. Spurgeon would like to see you now," Julie said.

"Be right up."

I disconnected the call and headed to 32, where Julie sent me directly into Mr. Spurgeon's office.

"You have the Presidential Suite at The American Club for the dates you asked. I'm covering it."

"That's not necessary," I said.

"Say 'Thank you', Kane."

"Thank you."

"Other than tips, everything will be charged to me. I've already cleared the days off with Murray for you."

"Thank you."

"By the way, today was the first time I've seen the word 'laughable' in a political analysis."

"It fit," I replied. "I mean, the UN General Assembly has no actual power, and nothing they say actually matters. Despite claims to the contrary, all power vests in the Security Council, and with the US and USSR nearly always on opposite sides, the UN is, in fact, a laughingstock. From what I can see, their only success is avoiding paying parking fines around UN headquarters!"

Mr. Spurgeon laughed, "They milk that diplomatic immunity for all it's worth! What about peacekeepers?"

"What about them? India and Pakistan are still at odds over Kashmir and find ways to kill each other, despite the UN being there since 1949. Ditto the Middle East. And let's not even discuss Africa!"

"Point taken."

"Fundamentally, the US and USSR, and to a lesser extent Red China, can do as they please, and nobody can stop them except each other. And even they can't really stop each other because it comes down to one side or the other blinking rather than opting for nuclear annihilation. Mutual Assured Destruction is an insane idea, but it works. Both sides stop short of a general shooting war because they know where it has to lead."

"All true. Who wins the Cold War?"

"In the end, the economic power of the West will defeat the East Bloc. The question is, do they go down with a whimper or a bang? And then, does China somehow fill that power vacuum to become a superpower."

"What's your take?"

"Watch their economy. China could develop a strong economy, which is possible after the demise of Mao and the 'Gang of Four'. The reforms instituted so far by Deng Xiaoping seem to be on target for creating what I think we would call a mercantilist economy, and if he can succeed, then China will fill the power vacuum created by the collapse of the East Bloc. Downsizing the Peoples Liberation Army tells me Deng is serious about economic improvement."

"Who's your China expert?"

"Tony, really, mostly because of his own interests — his wife is a Chinese ex-pat who escaped via Thailand in the mid-70s."

"Did anything come of your contact with the Soviet Trade Ministry?"

"No. I've kept in touch, but I don't see anything there, and as I noted, their economy is likely to collapse sometime in the next decade."

"Peer into your crystal ball — when?"

"Early 90s, I'd say. It could happen sooner, but they have enough natural resources to stave off the inevitable for a decade or so, or perhaps even two. By the turn of the millennium, though, it's a sure thing. They simply don't have enough hard currency or precious metals to conduct international trade except as a supplier of raw materials, and as we know, it's manufactured goods where the profits are made. Russia has no real manufacturing capacity for exports, the exception being the tractors they're selling here and whatever they can foist on client states."

"How solid is your information and analysis on the Nikkei 225?"

"I am not uncertain," I said.

Mr. Spurgeon laughed, "Your stock phrase for when you're sure."

"At least as sure as I can be about anything that is a purely chaotic system — financial products and weather being the two main ones."

"Double in two or three years, and further upside?"

"Yes."

"OK. I trust your analysis, but I want to look someone in the eye when they give me what amounts to new, contrary information."

"I'm sure you read the analysis, but it comes down to the fact that real estate prices are going to force the issue. There is so much available equity for building owners to borrow against, and interest rates are so low, they're going to do it and pour money into the stock market. And those increasing property values pump up the balance sheets of companies as well, making the fundamentals look good to the casual observer, and when combined with a strong Yen, will drive retail investors into the market."

"Which is why you think, eventually, the house of cards collapses."

"I think even a slight drop in property values could cause a cascading effect, as could a reduction of their trade surplus. Scott and I believe the warning sign will be a weakening of the Yen. When we see that, we pull out of the market, short the Yen, and ride it down."

"If your team is right, we could see returns north of 50% for the next few years."

"I am not uncertain."

"Dismissed, Kane. Keep up the good work."

"Yes, Sir. And thank you again."

I left his office and returned to 29 to complete my day, then headed home to see Keiko.

"We have the Presidential Suite at The American Club for the 14th through the 17th," I said. "Mr. Spurgeon made it happen, and he's covering the cost."

"Really?"

"Really. He knows the situation, given his involvement with trying to find a donor in Japan."

"I'll call Doctor Morrison tomorrow and request the transfusion for the 12th. That should help me have more energy for our vacation."

"Is there anything else I can do for you, Keiko-chan?"

"You're doing the most important thing," she said. "Loving me. Happy birthday!"

"Thank you. Bianca has cake and ice cream for dessert."

"How does it feel to be twenty-one?"

"No different from yesterday, but at least now if I'm carded, I can still drink!"

November 4, 1983, Chicago, Illinois

"Research; Kane," I said when I answered the phone just after 9:00am on Friday morning.

"Jonathan, it's Chris Roth from Kenosha."

"Good morning, Chris. How are you?"

"Good. I'm calling to say that we're ready to pull the trigger. What do we need to do?"

"Sign the forms I left with you and send them, along with the application packet, to my attention. If you want to courier it, I'll arrange that. Once we have the documents, Legal and Compliance will review everything, and then New Accounts will handle transferring the assets. Just make sure the signatures on the application are notarized, please."

"I'll take care of that this morning. And yes, we'd like to move as quickly as possible."

"I'll call the courier. What time should they pick up the documents?"

"I'll have everything ready by 10:30am."

"I'll take care of it. Welcome aboard!"

We said 'goodbye', and I ended the call, then called Jack to let him know I needed documents picked up in Kenosha, with the charges allocated to the Cincinnatus Fund.

Five hours later, I hand carried the documents to Legal and Compliance, then returned to my desk. I completed my workday then headed home.

"Jonathan, you remember my cousin Ailea, right?" Keiko asked.

"I do. Hi, Ailea."

"Hi, Jonathan!" the bubbly seven-year-old exclaimed.

"How long are you here?"

"My mom dropped me off about ten minutes ago and will pick me up when she's done shopping; around 5:00pm."

"I'm glad you could visit. Keiko, I'll be upstairs, but I'll spend some time with you before I go out."

"OK," Keiko agreed.

About ninety minutes later, Ailea left, and I went to the Japanese room to sit with Keiko.

"Given what we're facing," I said, "I think this is the last Friday I'm going to go out. I want to spend every moment possible with you."

"You know I want you to spend time with your friends," Keiko said.

"I do, but if I can be direct..."

"Yes."

"We don't have a lot of time left, and I want to make the most of that time. With you."

"I know," Keiko sighed. "I want ... want things to be different, but..."

She began crying softly, and I took her in my arms and held her. I had read the same literature that she had, and once treatment stopped, it was usually a matter of months before the end, which meant there was a good chance that Keiko and I had only weeks before her symptoms would confine her to bed. She was already showing the first signs of what was called 'End-Stage AML' — weakness, loss of appetite, and low blood pressure.

None of those were severe, but it was only a matter of time. Fortunately, she was not in pain, something that often happened at this stage and which would require painkillers. I hoped that continued for at least the next two weeks so that we could enjoy our time at The American Club. The transfusion would help, and the IV antibiotics were holding the infection at bay, though how long that would last was anyone's guess.

"I can stay home if you want," I said about ten minutes later.

"No, I'm going to eat something, then go to bed so I can have energy tomorrow when you're home."

"If you're sure."

"I am."

We went to the kitchen, I made her a light dinner, and after she ate, she went to bed, and I went out to dinner with Jack, Kristy, and CeCi.

November 5, 1983, Chicago, Illinois

On Saturday, Bianca and I went grocery shopping, stopped by the dry cleaner, and then headed home. Keiko, Bianca, Juliette, and I had lunch together, then Keiko and I went to the Japanese room.

"Can we talk about something?" Keiko asked quietly.

"Whatever you want," I replied with a bit of trepidation, given the likely topic.

"When the time comes, I want my grandparents and parents here."

"I'll speak with your dad and grandfather and make that happen. What about your aunt, uncle, and cousin?"

"Yes. There are certain things which are traditionally done, and I'm not sure if my grandparents will want to do them; I am sure my mom will."

"What do you want, Keiko-chan? I will absolutely ensure your wishes are fulfilled."

"Well, in one sense, it won't matter, if you know what I mean."

"I understand, but it matters to me that your wishes are honored."

"I'm OK with the usual rituals, including the «通夜» (tsuya), which is similar to a wake, and a «告別式» (kokubetsu-shiki), or funeral is fine, but please do not give me a new name."

"A new name?"

"Traditional Japanese, which would include my mom, believe you should give the deceased a new name to prevent their «神» (kami) from being summoned at the mention of their name. It's a bit silly, especially given our beliefs, and the temples charge for it, sometimes millions of Yen to have a rare name. I promise not to haunt you if you say my name!"

I smiled, "Thank you. How much grief will we get from your mom on that?"

"She'll complain, but you can ignore her. Following the funeral, I want to be cremated, as we discussed. You may keep some of the ashes if you wish, but they do not go on the «神棚» (kamidana). The rest go to the crypt at Montrose Cemetery, as we discussed." ("Spirit Shelf")

"What about your parents or grandparents?"

"Traditionally, the ashes aren't kept, but being American, I felt you might want them. There are other traditions, but I looked into how it works here, and the ashes are ground, so the «骨揚げ» (kotsuage), or the 'picking the bones' ceremony, is not necessary. My mom may object, but things are different here.

"As for the crypt, my grandfather will arrange to have my name engraved on the stone tablet. If you want, your name can be engraved as well, but it would be painted red to signify you are still living. I'm not sure what you want to do, because you might marry again; I think you should."

"I don't want to think about that at the moment," I said. "I have no idea what will happen in the future, but I promised to love you until my last breath, so yes, please, have my Japanese name engraved on the tablet. Someday, I will join you."

"Are you sure?"

"Positive. What about waiting forty-nine days to inter the ashes?"