Chapter 25

Brooklyn, N.Y.

“Jeez,” said ‘Big Tony’ Scolera. “A hundred mil? Are you sure?”

“Yeah,” answered Bo-Bo Elsmore. “The man said there was a cashier’s check at the American Bank. If we deliver this Armis chick alive to the U.S. Federal Court.”

“Anybody got any idea where she is?” asked Manolo (no last name).

“Nothing real. They say she was in Nigeria ‘bout when all them terrorists got axed.”

“I heard she was in D.C. when the President off’d himself.”

“Nah ... she was in Tokyo when they had that big scandal.”

“So... ,” said Big Tony, “we got nothin’. Okay. Put out the word if anybody sees her send up a flare. But don’t plan on doin’ nothin’.”

Lerwick, Shetland Islands

After the Brexit election in 2016, the United Kingdom broke apart over the next decade and a half. Scotland and Wales withdrew and applied for membership in the European Union. And the Shetlands broke off from Scotland after its own plebiscite, forming its own nation between Scotland and Norway, with a capital at Lerwick.

The Shetland Islands crafted a set of banking privacy laws that rivaled those of the Isle of Man, the Cayman Islands, and the small Pacific nation of Tuvalu, which was now a small mountaintop sticking out over the Pacific – the government was now headquartered in New Zealand. Naturally, Io took note of the Shetlands’ banking situation and created two separate banks about a decade ago (when it became clear that the Shetlands was a going concern): Second Bank of Lerwick and the Northmavine Trust Company. Each was financed with about a quarter of a billion dollars, and each established banking relationships with institutions around the world. And they established corresponding trading relationships with every major brokerage in America and Europe.

Jeff Harmony began to liquidate his fund’s stock holdings and transferring money to NTC (Northmavine Trust Company). It took about four weeks to liquidate billions and billions of dollars of stock without creating any downdraft in share prices. Armis had introduced Io – or Fritz as she introduced herself – to Jeff so that there would be as little lost in translation as possible.

Jeff explained his ideas to Fritz at length, and when both Jeff and Fritz were sure of what they were going to do, they picked a starting time and date. Jeff was holding his breath as his 5.5 billion dollars went to war against the biggest moneyed interests in the country who had trillions of dollars. It was like a giant warrior against an army of titans, while the ‘regular’ people could do nothing but stand on the sidelines and watch; the difference was that the outgunned and outnumbered warrior had a secret ally who used magic.

Two Water Street and Six World Trade Center, Lower Manhattan, N.Y.

The computer mainframes of The Bank of the United States were housed on the third floor of Two Water Street, the operations center and trading rooms of B.U.S. The American Bank’s computers were located in Six World Trade Center. High speed, fiber optic, data communications lines connected these – and other trading rooms – to the exchanges, so they got the data from the exchange floor micro-seconds faster than the rest of the world. Even at the speed of light, data takes a certain amount of time to go over a distance through fiber optic lines; and the closer you were to the exchange, the faster you’d get the information.

At 3:00 p.m. on Friday, November 3, 2062, these two banks’ computers started to buy call options above the market price on a whole range of stocks, expiring at 4:00 p.m. that same day. That meant that they were paying a small fee for the right to buy stock if the price rose significantly between when they bought the option and when the market closed. They bought millions and millions of contracts. The offsetting seller was Jeff Harmony – actually, they would be buying from anyone in the marketplace, but only Jeff’s account(s) would be offering to sell in the amounts required.

That could be a big risk for Jeff. But for the second part of today’s plan, Jeff’s risk would be even higher.

Part 2 was difficult for regular people to understand, but very simple to implement. Jeff was buying puts on all the stocks in the banks’ portfolios. Each put gave him the right to sell his stock back to the seller at a certain price. So Jeff would pay to the banks a fee for each put option. It was a small fee, and to a large extent it would offset the fee the banks paid for each call option.

But here’s the end result: an option controls 100 shares of stock. So an option for 1 day (or part of a day) to buy (call option) or to sell (put option) might sell for only $20. If the price of the stock went down (as the plan called for – as Jeff was hoping it would) the option to buy (call) would be useless: who would want the option to buy something for (for example) $50 when it was selling on the open market for $40? And, of course, the sell option (put) would be worth $10. But remember that each option is for 100 shares, so if the price of the stock fell by $10, that would be worth $10 x 100 = $1000.

So consider the result from the bank’s point of view: pay $20 for a call + get $20 for a put + LOSE $1000 because they had to buy the stock for $50 when it was worth only $40 (in our example).

What’s the big deal? They lost $1000 on an option. For 100 shares. But they were dealing in millions of shares. For EACH stock. And there were hundreds of different stocks.

So, if the bank had only a million shares (only a million shares! Imagine that.) that worked out to be a loss of 10 million dollars. And they didn’t have a million shares. They had several million: 2 million, 5 million, more? Now multiply by the 200 stocks that the banks held.

The bottom line was that the banks would stand to lose about a billion dollars in a day.

IF the price of the stock fell. If it rose instead, Jeff would be out the billion. That’s where part 3 came in.

Compared to the complications of all the option stuff, Part 3 was simple. Io modified the stock trading computers of these banks to sell – everything and in massive quantities. Considering the speed at which these trading computers could execute these orders, they would overwhelm the markets. But Io had a trading computer, too; a couple in fact. And she wrote orders to buy – at decreasing prices. There was a buy order for every sell order for every stock, in unlimited quantities. Meaning that the market wasn’t overwhelmed and didn’t shut down. So, the price of every stock tumbled – for an hour. One or Two minutes later, when the options expired and the market was closed, the price declines ended.

Because of the put options, the banks had to buy back all the stock they had sold. They sold at (in our example) $50, $49, $45, $40, whatever price they could get – they had to buy it all back at $50. They lost money by the shiploads.

The net result was billions of dollars leaving the trading accounts of the banks and going into Jeff’s new accounts at NTC. It was a complicated system and it didn’t bankrupt the targets right away. Throughout the banks’ trading rooms, the hit would happen so fast, in the last hour of trading, that humans couldn’t stop it. They could only scratch their heads and wonder “What happened?” “Why did our computer do THAT?”

“We was robbed – by our own computer!” And on that Friday night, when the lights were burning in Two Water Street and Six World Trade Center, it became clear that the bank was basically in the same position as it had been at the start of the day, but several billion poorer.

They looked for bugs. They looked for hackers. They looked for any and everything that would explain what happened. The orders came from nowhere and no one, but that was normal. The trading computers normally generated their own orders – they traded so fast that no human could keep up with them. The executives who had originally gouged the markets for billions at the time of the Presidential assassination had their own money mingled with the computer orders. If you had your own computer that virtually minted money, wouldn’t you?

And the process would be repeated in a week or two, when the human beings resumed their reliance on computers.

Amusingly, the comm broadcasting networks that covered the stock markets went nuts trying to figure out what was happening. Why were there so many self-canceling option trades every other week or so? Why did the prices of stocks tumble for a day or so and then recover? Only one talking head managed to ferret out the truth, but he had not one piece of proof – it was all a guess. He said, “It’s like they’re out to move all the money from one set of hands to another. I have no idea who ‘they’ are, but to me, it looks like an Armis-style event. She said she was going to take the money from the rich. And she has out-of-this-world computers. She could do it. Armis hasn’t been very active in her Robin Hood talks lately. Has she gone underground?”

‘Fritz’ estimated that it would be all over by Christmas. Jeff thought it would take ‘til Valentine’s Day. In the final event, neither was correct. Bank of the U.S. closed its doors in mid-January – out of business. They had doubled down on their trading trying to make back all they’d lost. Unfortunately, their computer had an Io-based operating system.

American Bank stopped trading a month later; but it kept doing ‘regular bank stuff’. It still accepted deposits, handled checking accounts, issued credit cards and loaned money for cars and real estate. But it didn’t trade stocks. It had been a top five bank in size, now it was trillions of dollars poorer and was listed as #67^th in size.

When that little ‘skirmish’ with the American Bank and the Bank of the U.S. was done, nothing much had changed in the stock markets – except that Jeff’s accounts now were in the trillions.

Oh ... and the ‘other’ surviving banks had increased their computer security. They still did thousands of transactions, in very large sizes, every single second, and making millions of dollars every day. They set their own computers to watch over the trading computers. The net effect was they hired Io-based computers to watch over the Io-based trading computers to protect against Io-based raids on their money. Io and Jeff laughed all the way to the bank.