Chapter 34

Appropriately enough, Friday morning dawned in Washington, D.C. with dark clouds heavy with snow. Weather forecasters were calling for high temperatures in the mid twenties, with a severe winter storm warning, saying there was a possibility of as much as twelve to fifteen inches of snow before the storm ended. Before the storm was over, much more than just snow would fall.

Friday morning dawned several hours earlier in Brasilia with hazy sunshine, promising a hot, sticky day. The temperature was forecast to go into the nineties, with a possibility of severe thunder showers later in the day. This also was appropriate, given what the new Brazilian government was about to do.

The leaders of the general strike took power late the previous night, amidst the chaos of the collapse of the previous government. Upon taking power, the new leaders called for an end to the general strike, effective immediately. The people had won and were now taking control of their own destinies. They also announced that the austerity measures implemented by the deposed government would end, also effective immediately.

They were up late that night, trying to figure out what they would do, now that they had gained power. Brazil faced a number of very serious problems that needed almost immediate attention. Besides the economy, which was in a crisis state, Brazil's population was exploding, putting enormous pressure on the country's resources, especially the Amazon rain forest, whose trees were being cut down at an alarmingly accelerating rate to provide land for peasants to farm. Besides the environmental damage resulting from the destruction of the rain forest, air and water pollution also posed a serious threat to many people throughout Brazil.

The new leaders in Brazil looked at what the new Mexican government had done since they had taken power and felt that the Mexicans had done the only reasonable thing to help their people. Feeling that the onerous burden of debt that was owed to the developed world was strangling any hope that they might have to improve the standard of living of the vast majority of their people, the new leaders felt that the only way they could resolve the problem was to renounce the debt. They announced their decision at 9:00 Friday morning Brasilia time, 7:00 A.M. Eastern Standard Time. This announcement was followed within hours by similar declarations from the governments of Venezuela, Argentina, Indonesia, Nigeria and Colombia, who all faced massive unrest because of austerity measures imposed by the I.M.F. The international financial system was about to collapse.

The chairman of the largest bank in the United States heard the news of the Brazilian default as he prepared to shave. He had lead the bank into making massive loans to Latin American countries, especially Mexico and Brazil, when he was a vice president of the bank during the 1970s, when it was assumed that these countries would be the hot growth spots in the world in the future. He saw his whole career begin to collapse several days before, when Mexico defaulted, and this development only served to accelerate that collapse. By the time he had finished shaving, Argentina had announced its default. He sat down at his desk and began writing a letter explaining what he was about to do. By the time he had finished writing the note, Venezuela and Colombia had also defaulted. He then walked into his bedroom, pulled a .45 revolver out of his dresser drawer, pointed it at his temple, and pulled the trigger.

The President of the second largest bank in the United States had gone into work early that Friday, and was already in his office when the news came across the wires about the multiple defaults. Seeing the collapse of the financial empire that he had worked his entire life to attain, he got up from his desk, walked to the fire escape stairs, walked up the two flights of steps to the roof, walked around the circumference once, and then jumped, falling fifty five stories to his death.

The chairman of the third largest bank was in his limousine on his way to his office when he heard the news of the defaults. His car was stuck in traffic midway across the Brooklyn Bridge when he opened his door, ran to the edge of the bridge and leaped to his death before hundreds of horrified people who were too shocked to do anything to stop him. Before the day was over, many others would be attempting similar actions.

The markets that day opened to complete panic and pandemonium. Program trading, which under the rules was suspended after a rise or fall of fifty points in the Dow Jones average, was suspended after the markets had been open ten minutes. The Dow had dropped nearly one hundred fifty points in the first half hour. Volume had already passed one hundred million shares by that time. No buyers at all could be found on the floor. Everything was sell. Sheer panic reigned. Nothing like it had ever been seen before, not even two days before when everyone thought that the bottom had dropped out of the market. Everyone was getting out of the market. All of the indices plummeted.

The Board of Governors of the New York Stock Exchange met in an emergency session. They decided that they would halt all trading at noon that day, before every stock listed became completely worthless. By noon, the tickers were four and one half hours behind, and volume had exceeded Wednesday's volume of 550 million shares. By the time the figures were finally calculated, the Dow Jones Industrial Average stood at 5779.36, down 917 points in one day.

The banks, which had withstood massive runs only two days earlier, were placed in the same predicament once again. The Federal Reserve had been trying to restock the banks with money so that they would be able to withstand the formidable withdrawals they might face. Unfortunately it was not enough. Banks began running out of funds by early afternoon, and began locking their doors with people still standing in line.

People who were still in line when the doors were locked were not very happy, to say the least, and began to show their displeasure almost immediately. This ranged from guards being shot as they tried to lock the doors to bricks and firebombs being thrown through the windows of banks that had closed.

People were going to food stores to stock up on staples, emptying the shelves and driving prices sharply upward. Fights began breaking out in food stores over items that were becoming scarce. Order was breaking down. The people began taking to the streets. Riots were breaking out in locations throughout the country. Looting was going on almost everywhere. The United States was near anarchy. And it looked as if the situation might get worse.

President Lehrer was being discharged from the hospital and returning to the White House to continue her recuperation. Her discharge was handled quietly for security reasons, not even being announced until she was safely back at the White House. She arrived at the Executive Mansion at 9:30, just as the markets were opening in New York. She had already been briefed about the multiple defaults and had called an emergency meeting with her top economic and financial advisers for 10:00. During the half hour before the meeting, she went into the Oval Office and began catching up on some of the paperwork she had had to forego because of her hospital stay.

She also had one other problem to overcome; she had to learn to write with her left hand because of the injuries to her right arm. The President had begun learning how to write with her left hand while she was in the hospital, and by concentrating, she was able to make her signature somewhat legible. She joked that if she could only learn Greek and Latin, she might be able to duplicate President Garfield's fete of writing in Greek with one hand and Latin with the other once her cast was off. Maybe she would try it in Spanish and German.

By 10:00, her advisers had assembled in the Oval Office. The Dow had already plummeted 150 points, and was plunging fast. The President was curt. "All right, our situation is worse than our worst case scenario. Within the next several hours, we will be facing total economic collapse. What the fuck do we do besides pray for a miracle?"