Chapter 22: Global Thermonuclear War

November 20, 1983, Chicago, Illinois

“Gruesome,” Deanna observed when The Day After finished.

“As gruesome as that was, I suspect reality would be far worse,” I replied

I got up to stop the tape that I’d used to record the TV movie so that Keiko could see it. She had been too tired to stay up but had insisted I should stay up to watch.

“I read they had to cut scenes because it was too graphic and disturbing,” Kristy interjected.

“I bet!” Deanna exclaimed. “There were no commercials after the nuclear bombs went off because could you imagine ANY business wanting to associate themselves with that?”

“Good point!” Kristy agreed. “Jonathan, I know you’ve done some analysis, but how realistic was the build-up?”

“I’d say that if we’re going to blow ourselves to smithereens, that’s a very likely way for it to start — something to do with Berlin, and things escalate, leading to the Soviet invasion of West Germany through the Fulda Gap by the 1st Guards Tank Army and supporting units from the 8th Guards Combined Arms Army. NATO would, in all likelihood, need to use chemical or nuclear weapons to stop that invasion. And if the Soviets used chemical weapons, we’d retaliate with nukes because we’ve declared chemical weapons to be ‘weapons of mass destruction’ on par with hydrogen bombs.”

“You know the specific unit?” CeCi asked.

“The 1st Guards are the primary Russian assault force in East Germany, and they led the invasion of Czechoslovakia in 1968. I can’t imagine they wouldn’t be the spearhead. I can tell you that it’s commanded by Guard Lieutenant General Boris Petrovich Shein. As for the location, the Fulda Gap is well known for providing good access for armor to cross the Inner German Border. As a piece of trivia, it’s the route Napoleon used to retreat after his defeat at the Battle of Leipzig.”

“Why do you know all of that?” CeCi inquired.

“As part of my analysis of world tensions. Fundamentally, if that unit leaves its barracks except for planned training maneuvers, what played out in the movie we just saw is very likely to happen.”

“Jesus.”

“Yeah. My analysis is that if that comes to pass, you want a Soviet MIRV to go off directly above you. You’ll be dead before your synapses can report that anything happened and your brain can process it. The survivors would be the unlucky ones.”

“Do you think the movie will have any real effect?” Jack asked.

“Short term? Probably not. Long term? Possibly. It might drive the Arms Talks to further reductions, but I’m not sure going from moving the rubble ten times to only five times makes much difference, but it’s a start. SALT II was intended to impose limits, but Carter used Afghanistan as an excuse for withdrawing the treaty from the ratification process.”

“Do you think KAL 007 or Grenada could have led to nuclear war?” Deanna asked.

“Could have? Sure. But in both cases, neither side felt it was worth the risk of escalation. Sure, it sucks for the people on the Korean Air flight, but I’m personally happy we decided not to risk blowing up the world over that.”

“On THAT happy note, we’re heading to bed,” Jack said.

That was the consensus, so I shut off the projection TV, and when everyone had gone upstairs, I turned off the lights in the basement. I headed up to the master bedroom, quietly completed my bedtime routine, and slipped into bed next to Keiko.

November 21, 1983, Chicago, Illinois

“I’m not going to be able to commit to any specific days off next year,” I said to Tony when we sat down before our staff meeting.

“Keiko?”

“Yes. We’re out of options, but nobody can say how long she has, nor do I know how much time I’ll need to take off to care for her. Mr. Spurgeon is accommodating, but I could easily burn all my time for next year early in the year.”

“Shit, man. That sucks.”

“It does. Please keep that to yourself for now. Work out what time you want off, and I’ll work around it. Just do me a favor and don’t plan anything for January or February.”

“The kids are in school, so it’s tough to get away then. I’ll probably schedule two weeks in July or August, but let me discuss it with my wife. Is there anything I can do?”

“There isn’t much anyone can do except try to keep her comfortable. Anything from last week I need to know before our staff meeting?”

“I assume Jack let you know the inspection of the new space is scheduled for next Monday.”

“He did. That’ll give Brown Construction a few days to resolve any deficiencies and still make our December 3rd move date.”

“OK. Is there anything I need to do for our new staff who start on the 1st?”

“No. I spoke with Phil about equipment, and that’s covered. They’ll be set up in the new space, assuming everything goes well with the inspection. If not, we’ll use some of the empty research desks. Bianca’s new computer system will be installed on the 5th.”

“OK. Anything else?”

“That’s it.”

The staff meeting was uneventful, and at the end of the day, I headed to Jeri’s house for our monthly group dinner. I’d confirmed with Keiko that I could share her situation with my group and friends, and she’d agreed. I decided to reveal our news after dinner so as not to spoil the evening completely. As with everyone we had told, they expressed sympathy and offered to help in any way they could, but there was literally nothing that could be done.

November 24, 1983, Thanksgiving Day, Chicago, Illinois

On Thursday, Violet arrived just after 9:00am, and she, Bianca, and I prepared the Thanksgiving feast, though Jack and Kristy were heading to her dad’s house for their meal. Neither Violet nor I had much experience with cooking a Thanksgiving meal, but Bianca was well versed, and CeCi provided some tips as well. I took breaks every half hour to spend a few minutes with Keiko in the Japanese room.

We had a wonderful meal at 2:00pm — turkey, stuffing, mashed potatoes, buttered corn, homemade bread, and gravy. Dessert was pumpkin and apple pie with vanilla ice cream and coffee.

“Keiko and I have something to announce,” I said once everyone had been served their pie, ice cream, and coffee. “She received her latest test results, and they are not good. We are, at this point, basically out of options.”

“I think we all knew once she came home and had the hospital-style bed here,” CeCi observed. “Is there anything that can be done?”

“If a donor were found, and if Keiko were healthy enough for the transplant, yes. But it’s very unlikely, even if a donor were to be found, that anything could be done, given the test results.”

“If there is anything we can do, let us know, please,” Deanna offered.

“Thanks.”

The rest of the meal was subdued, and when we finished, everyone pitched in to clean up the dining room and kitchen. When we finished, we went to the basement to watch the second football game of the day.

In the earlier game, the Lions had obliterated the Steelers 45-3. The second game, between the Cowboys and Cardinals, wasn’t much better, though it did start out close, with the first quarter ending with the score tied 7–7. Dallas put it in overdrive, and score two touchdowns each in the second and fourth quarters against a touchdown and a field goal for the Cardinals, giving Dallas a 37–17 victory.

“Do you work tomorrow, Jonathan?” Deanna asked when we went upstairs for a post-game snack.

“A half day,” I replied. “The markets are open until noon. About half my staff took the day off, which is fine because more than half the traders are off as well. The report my team owes tomorrow is abbreviated, not a full analysis. I’ll put on CNN Headline news after our snack and see if anything important happened today.”

About fifteen minutes later, I did that, and CNN was not reporting anything momentous or even particularly interesting, as it had been a typical ‘slow news’ day. After the news, I drove Violet home, and when I returned to the house, Keiko and I spent time together in the Japanese room before we went up to bed.

“When do you plan to put up the tree?” Keiko asked as we got into bed.

“Tomorrow, after I arrive home. It’s only a half day, so I can put up the outside lights first before it gets dark, then we’ll put up the tree.”

“In the great room, right?”

“Yes. The corner to the right of the fireplace seems perfect.”

“I agree.”

We got into bed, Keiko snuggled close, and we fell asleep.

November 29, 1983, Chicago, Illinois

On Tuesday morning, I went to see Murray Matheson about five minutes after he’d arrived.

“The fundamentals are right to move on the AUD,” I said. “I believe a concerted effort now will force a float within two weeks. They’re out of tools to reasonably defend, and the currency is far too strong for the underlying numbers.”

“I’m sure it’ll be in your morning report, but what’s the play?”

“Short the currency and buy December puts. If you move today, you’ll be in ahead of the herd, and you’ll have takers on your puts. Once they float, the currency will drop like a stone, buy as much as possible at the bottom, and sell when it recovers.”

“A dead-cat bounce?”

I shook my head, “No. As soon as they announce the float, there will be a huge wave of selling, but the currency is actually strong; it’s just not as strong as the current overbid exchange rate.”

“How sure are you?”

“I am not uncertain.”

He nodded, and I left his office and returned to my desk, where I continued working on my daily global risk analysis. The main flashpoint was Afghanistan, where the Soviets were fighting a war that looked to be their Viet Nam. The Reagan administration was supplying the Mujahideen with money and weapons, and the Pakistanis were training them.

The Soviets were on the receiving end of a lesson about Afghanistan that had been learned by the British. What the journalist Alexander Cockburn called an ’unspeakable country filled with unspeakable people, sheepshaggers and smugglers’ held the winning hand and would, in my estimation, force a Soviet withdrawal, much like Nixon’s from Viet Nam.

The real question, which I couldn’t answer, was when it would happen and what would happen afterwards. Afghanistan wasn’t important in the larger scheme of things, but whether Yuri Andropov would survive the humiliation of a military defeat. That led me back to the idea of talking to the Soviet Trade Attaché. I wondered if I could glean even a slight amount of information from him, because if I could, it would be extremely valuable in understanding the future.

When I completed my analysis, I called Joel Steinem to place my initial currency trades.

“Joel, it’s Kane. Buy 2000 December AUD puts, immediately at market.”

“Cover them with call options?”

“No.”

“Current quote on those puts is 0.921.”

“Do that immediately, please.”

Keys clicked, and about thirty seconds later, he said, “Done.”

“Thanks. Enter a corresponding good-until-canceled limit buy order for a corresponding amount of AUD at a maximum of 0.885.”

I heard his keys click.

“Your order for AUD 20,000,000 is in but flagged for Murray Matheson’s review.”

“He’ll approve, and there’s no rush because it’ll be days or even weeks before it could fill. You’ll hear from the FX Desk later this morning, and they’ll have some big orders.”

“You’re a witch, Jonathan! Anything else?”

“If I had more, I’d buy more,” I replied.

“You’ll clear roughly $2,000,000 when all is said and done, if you’re right, that is.”

“I am not uncertain!”

“I’m sure I’ll speak to you again soon!”

“Absolutely!”

We hung up, and a few minutes later, I had my trade confirmation on the puts I’d bought, as well as a confirmation of my limit order, though it was flagged, as Joel had said. I went to see Mr. Matheson to let him know, and he authorized the order.

“That’s a big move for you,” he observed. “About two percent of your holdings.”

“I’m confident in our analysis, but I also have to guard my overall return. Even if I have to fill at the current price, I’ll still have beaten thirty percent this year.”

“How are you going to cover the trade?”

“I kept about five million in cash from the latest clients, and the rest will be from Treasuries that mature this month. I also have bond income, so I have some margin. I’ll be cash tight for December, but that won’t be a problem.”

“If you run into a true cash crunch, let me know. I can cover from the main fund for a point. That’s SOP, and to our prime brokers, cash is cash in the settlement accounts.”

“Thanks. How big are you going?”

“Big. I’m coördinating with traders in London, Singapore, and Hong Kong. We’re going to hit them with something like a billion dollars over the next ten days. That’ll get their attention.”

“No kidding! The tipping point, as Moreland wrote in our report, is somewhere in that range, and once others pile on, they’ll be stuck. Their banking system can’t absorb that amount of capital, and the exchange rate is going to choke off exports.”

“We’ll hold their feet to the fire and see how long it is before they beg for mercy. Keep up the good work, Kane.”

“Thanks.”

I left his office and returned to my desk, and began researching something I’d seen in a Bloomberg news feed — the formation of the Zapatista Army of National Liberation, from the remnants of the «Fuerzas de Liberación Nacional», or FLN. From what I could glean, without being able to read Spanish, they were a Marxist, agrarian, revolutionary movement. What that might portend for the future was unknown, but it could lead to the destabilization of Mexico, which could have a major impact on the US.

To solve my lack of Spanish, I asked Bianca to read some articles from Mexican sources, and she confirmed what I knew but said the articles offered no additional information beyond what I’d found in English-language sources.

The rest of the day was routine, and at 3:00pm, I headed home to spend time with Keiko before class. She was still feeling reasonably good, but I knew that was short-lived, as the positive effects of the transfusion were slowly waning. We had dinner together, then I headed to class. After class, Violet and I had our homework time while eating pie and drinking coffee, and after walking her to her house, I headed home.

December 1, 1983, Chicago, Illinois

On Thursday, Pete Mueller and Steve Smith joined the Research Department, though not until their orientation had been completed. Fortunately, our occupancy permit had been granted on Wednesday, and they could sit at their desks in our new space. The rest of us would move to that space on Monday, though Jack, the mailroom team, and the Information Technology team would move our phones and computer equipment over the weekend.

We had a team lunch on Friday, approved by Mr. Matheson so that everyone could get to know our two new team members. Steve Smith turned out to have a quirky, dry sense of humor, and I felt he’d fit right in with the team, especially Bianca. Pete was, for me, a known quantity — bookish and conservative — consistent with the reputation bankers had for being straitlaced. That made sense, given banks interacted with the general public far more than a firm like Spurgeon Capital ever would.

After lunch, Tony and I sat down with Bianca and Steve to go over the data analysis requests and prioritize them. Rather than simply deciding based on importance, we also placed some easy tasks, which Steve referred to as ‘gimmies’ near the top of the list. His logic, with which I agreed, was that it would allow us to show progress while working on the more complex and complicated requests.

I finished my day at 3:00pm, as usual, and after dinner at home with Keiko, I headed to class.

December 2, 1983, Chicago, Illinois

Friday was a typical day at work, but when I arrived home, I found Keiko sitting in the Japanese room wearing an oxygen tube, or, as the nurse had called it, a ‘nasal cannula’.

“What happened?” I asked after greeting her with a kiss.

“My blood oxygen level was only 90%. Jennifer spoke to Doctor Morrison, and he suggested using low-flow oxygen. That brought it up to 93% in the past ninety minutes.”

“Is that good or bad?”

“As with just about everything, neutral. He’d prefer 95%, but 93% isn’t dangerous; supplemental oxygen is indicated at 92%.”

Doctor Morrison might call it neutral, but to me, it was the beginning of the end. At some point, the blast cells would crowd out all other cells, and even supplemental oxygen wouldn’t help.

“You need to wear that while you sleep, right?”

“Yes. All the time, though I can take it off to shower and eat, for now. Maria will bring spare bottles tomorrow, and they’ll ensure I have enough.”

“You’re still OK to climb the stairs?”

“Yes. No restrictions other than needing the oxygen.”

“Did Doctor Morrison say anything else?”

“No. No other changes. He did prescribe Percocet for when Advil doesn’t work for the basic aches and pains. I’m not taking it yet because the Advil still works.”

“OK. Let me go change, then I’ll come sit with you.”

“Both CeCi and Deanna said they’ll be home for dinner.”

“Bianca and Juliette are going out with Jack and Kristy. Do you mind if I invite the boys for Sunday to watch football?”

“Not at all; you need to see your friends.”

I kissed Keiko, went upstairs, and then went to the kitchen to call Dustin and Costas. Both had answering machines, and I invited them for pizza, beer, and football on Sunday. After leaving the messages, I went to the Japanese room, and Keiko and I sat together in a Mamasan chair.

“How are you feeling?”

“Better, actually,” she replied. “The oxygen helps similar to how the transfusions helped, but you know it’s only temporary.”

“I know,” I replied. “But anything that makes you feel better is good.”

“Sorry, I wasn’t saying it wasn’t good, just ... well, you know.”

“I do. What would you like to do tonight?”