A WEEK AFTER Dewy and Montez were brought out of Sudan, the two airmen stood beside the president at the White House. Colonel Ron Dagovich, commander of the rescue force, stood with them as well. The East Room was filled with reporters and camera crews. The president introduced the servicemen and then each said a few words. Behind the president, John Oakley, Marion Ellman and Susan Opitz watched on.
Dewy and Montez had rested and received treatment for the injuries sustained during their capture and captivity. Each had superficial wounds. Montez also had a broken arm which had been splinted with a stick in the jungle and required operative correction. The arm was in a sling. They had been debriefed and helped by Defense Intelligence staff to articulate the words they would deliver to the world’s media. During their captivity they had seen Chinese soldiers operating alongside the Sudanese troops to whom they had been handed over. They and Dagovich were firmly instructed to avoid talking about that and other operational details.
In the White House, the week had been filled with intense discussions. If this confrontation wasn’t to happen again, its resolution needed to be the start of something new. What? The points of view clashed and clashed again. Marion Ellman found herself within the circle of the president’s closest advisors. Long meetings were held by the president with her, Oakley, Devlin, Perez, Opitz and Rose, with intelligence and State Department China experts participating as needed. Knowles had had two conversations with Zhang, to each of which Ellman listened. They detected hints of accommodation in his voice. Was he as shaken by the confrontation that had nearly taken place as Knowles was? Had he been strengthened by it within the regime, or weakened? Intelligence reported that General Fan had not been seen in public since the event and there were rumors that he was no longer in Beijing. It was unclear what, if anything, this meant. In the second conversation, when Knowles broached the subject of a meeting to resolve the economic conflict, Zhang gave what seemed to be a strong signal that he would welcome the idea. Knowles still didn’t like talking to him, and probably never would. But it seemed possible that the Chinese leader might be open to something more.
The draft of the remarks the president was now about to make in the East Room had gone around and around that tight circle of his advisors.
‘First,’ he said, after the servicemen had spoken, ‘I’d like to pay tribute to the bravery of these two men, Captain Pete Dewy and Captain Phil Montez.’ Knowles turned to face them. ‘We’ve heard in your words something of what you went through but, gentlemen, I’m sure it doesn’t approach the experiences you actually endured. I think that very few of us in this room today can truly understand what that involved. And I would also like to thank you, Colonel Dagovich, for bringing these men home. Your leadership and strength of purpose brought your men through a difficult time until success was achieved. And we should remember this. The cause in which you were fighting, all three of you and every other man with you, is a just one. Let us also pause to remember those who paid the ultimate sacrifice in this cause. They were brave men and their families and their country are rightly proud of them. They fought to liberate people from a tyranny of evil. Their comrades continue this fight. It’s a cause that does justice to this great country. If the day ever comes when the United States doesn’t feel it can pick up its arms in such a cause, then I would fear for what we will have become. Gentlemen, your country thanks you.’
The president turned back to the reporters and paused. There was applause for the servicemen. Tom Knowles nodded.
‘Now, in case anyone is wondering, I would like to affirm that the United States is going to continue Operation Jungle Peace until we achieve what we set out to achieve. I’ve said before, Jungle Peace is a good cause, it’s a just cause and I am proud to lead that fight. If anyone thinks the United States is going to back away from it because of one episode like this, then they are wrong. If anyone in the Lord’s Resistance Army is seeing this message, then I have some words for you: give up now and face fair justice. Surrender now because the United States is coming and we
will
get you.’
The president paused. The three servicemen, under the impression that applause must be normal at presidential press conferences, clapped. A few of the journalists joined in, to the amusement of their colleagues.
‘Now, it seems to me that this is a good opportunity to make some other remarks. We’re at the start of a new year. I don’t think the last year ended too well.’ Knowles smiled self-deprecatingly, then the smile went. ‘This new year is not going to be like the last.’ He paused, gazing at the audience, to make sure they knew this was where the serious part of the message started. ‘I know we all say that every year, and by about the end of January things are looking very similar to the way they always were. Not this year.
‘The fact that Pete Dewy and Phil Montez are able to stand here with me today and aren’t imprisoned somewhere in Sudan is because of the way we worked with the government of China. Naturally there are details I can’t talk about in public. I’m not saying it was a completely smooth process. I’m not saying we didn’t have our moments. But we do have these two fine men and Colonel Dagovich here with us today and what I can say is that without the cooperation of the government of China they would not be here. That’s an important fact. I have already expressed my thanks privately to President Zhang, but I would like to repeat my appreciation publicly here today. President Zhang: Thank you.’
Knowles stopped to give the thank-you emphasis. Details had been released of the mission to rescue Dewy and Montez, of a firefight followed by a standoff with Sudanese troops that had taken place while the United States was enjoying its holiday week, and of the successful resolution of the siege. Word of the confrontation that had loomed with China at sea had not been released. Information pertaining to that was classified at the highest level and not even the commanders of the
John F Kennedy
and
George HW Bush
strike groups had been given the full details of the situation off the Kenyan coast as they headed towards it. How long the secrecy would hold, it was impossible to say. One way or the other, participants in the drama would start to talk, but few of them knew the whole story, and hopefully it would be historians in ten, or twenty, or thirty years who would piece together the full picture of what had almost taken place off Lamu Bay in the holiday week of 2018. Not now. If the reporters in front of him had been aware of that, Knowles knew, the demand for a confrontationist attitude to China would have been almost impossible to resist, not least from his own support base in the Republican Party. And that attitude was the opposite of what he was about to express in the words that came next.
These words were for President Zhang.
‘That cooperation is a good thing. It’s an important thing. The United States and the People’s Republic of China can no longer pretend they can do something that helps themselves if it hurts the other. This goes for each of us – it goes for both of us. We’re too close for that. Our global system is too entwined. The problems we face, we have to face together. That doesn’t mean telling each other what we’re going to do without any room for discussion – it means working out what we’re going to do together. Like we did for Captain Dewy and Montez. That worked. If it worked for one thing, I don’t see why it can’t work for another. If it worked for Captain Dewy and Montez, I can’t see why it can’t work for everything else.
‘So let me go back to what I was saying about the way last year ended. It ended badly because we were not cooperating. I’m not placing blame. It takes two not to cooperate. But I think the position in which we find ourselves today – the market measures and the trade barriers and the painful economic effects we’re all going to feel unless we can quickly find a way out of this – shows just how bad things get when cooperation isn’t there. I don’t want the American people to feel those effects. They’re not abstract. They’re not ideas in a book or numbers on a page. They’re people, they’re lives, they’re dreams and aspirations that have every right to be fulfilled. And it’s my responsibility to spend every minute of my time and every ounce of my energy to make sure that happens. And I believe that President Zhang feels the same about his responsibility to the Chinese people, and I respect that.
‘I’m not making any demands. I’m not calling today on President Zhang to revoke the sanctions his government announced, because I know he’ll do that when he feels there’s no reason for those sanctions to be applied. Those sanctions don’t help him and they don’t help us, and I know he doesn’t want to use them. And I’m not saying that I’m revoking the measures we announced to protect the integrity of our markets. I don’t like those measures. I don’t want to have them in place. They go against every instinct and belief I have in the power of fairly regulated, freely operating markets to help drive our economy and make our lives better. The sooner I can revoke them, the happier I’ll be. But I think the last few days have shown that they’ve brought back stability to our markets. I know President Zhang understands I can’t revoke them until I’m convinced that our markets are protected in other ways.
‘So we need to find a way to get these measures and sanctions removed, and we need to do it quickly. Here’s what I’m proposing. I’m proposing that President Zhang and I sit down together with our respective officials and talk about this. I’m not talking about next year, or next month. I’m talking about next week. I’m talking about tomorrow. My diary’s free. I ask President Zhang to join me. Let’s talk about how we can work together to make sure that everyone can be satisfied that sovereign investment funds act in the markets as truly commercial participants without a hidden political agenda. There’s no reason they shouldn’t be in the market. The market needs them. How do we make that happen? I don’t know. I don’t mean to speak for President Zhang, but I suspect he doesn’t know either. But we do have some very smart people in Washington and Beijing who can help us figure it out.
‘Let’s talk about that for a start. Then maybe we can talk about other things. Let’s talk about China’s role at the IMF. Let’s talk about carbon dioxide emissions. Let’s talk about what’s happening in South Africa. I’ll talk for as long as it takes. My diary’s free. Let’s talk about the things we need to solve, but can’t solve alone.
‘Now, I know this isn’t the way summits between leaders are done. I know we’re supposed to have the agreements in place before we even sit down. Well, I’ve got news for you. This time we don’t. But we still need to sit down. And yes, this is the start of something that goes on and on. I don’t know exactly what it looks like, I don’t know exactly where it leads, but I do know we need to make a start, because the alternative just won’t work. A wise man said to me a little while back that he couldn’t always necessarily see to the end of the road, but he could tell a dead end when he saw one. If I had to choose between the two, I’d rather be on a road that leads somewhere, even if it’s going to take us a little while to find out where it goes, even if there’s going to be a little uncertainty, than heading into the dead end we’re all familiar with. As president of the United States, I owe it to the American people to take us on a road that leads us somewhere. As president of the People’s Republic of China, I’m sure that President Zhang feels that he owes that same thing to the Chinese people. So I’m saying to you, President Zhang, let’s take that first step together.
‘This is a new year. Let’s make sure that at the end of it, it doesn’t look like the last.’
The president paused. He surveyed the journalists sitting in front of him. Some were writing in their notebooks or tapping on tablets, others were watching him.
‘Now,’ he said, and he glanced briefly over his shoulder towards the back of the room, ‘before I conclude, I have one more announcement to make.’
ED GREY HAD missed the start of the White House press conference, caught up on the phone with a client who was trying to get his money out of Red River. Grey had been forced to shut down redemptions from the fund and was spending half his days cajoling clients who swore they would take out every last cent of their investments the minute redemptions opened again. They might do it, they might not. When the dust settled they might realize they would be hard put to find another fund manager who hadn’t done the same thing. Either way he had no choice but to stop them now.
When he finally managed to get off the phone and come out into the trading room, the president was talking about the importance of cooperation with China. All eyes in the room were on a screen showing the press conference. The only sound was the president’s voice.
The trading room wasn’t the same as it had been before the crisis. Somehow it was a sadder, smaller place. A couple of faces were missing, people who had gone home for Christmas and decided they didn’t want to come back. There would be more, Ed knew. He could see four or five who would drop away over the next few weeks. You could tell by their faces, by the look in their eyes. Something had gone. The fire was extinguished.
Boris Malevsky was going to be one of them. He was listless, mechanical. Fidelian had burned him up.
Grey turned his attention back to the screen. The president made his appeal to Zhang to join him in a summit to solve the economic crisis, then said he had one more announcement to make.
Grey folded his arms as the president continued speaking. It was a bold step, he thought, to call for a summit. Or a desperate one.
The president didn’t look desperate, thought Grey, watching him carefully. What was Knowles expecting Zhang to say to the idea of a summit? He must have had an expectation of Zhang’s response to make that suggestion. More than just an expectation.
On the screen, a tall woman in a blue pant suit was coming forward from the group of officials who had been standing behind the president.
Grey had been momentarily lost in his thoughts. ‘Who’s that?’ he asked.
‘Marion Ellman,’ replied one of the portfolio managers. ‘She’s the UN ambassador. Knowles just said he’s naming her as his nominee to be the new secretary of state.’
The president shook her hand and stepped away from the lectern. Ed Grey listened as she began to speak.
‘Mr President, I’d like to thank you for this great honor. Before I say anything else, I’d like to pay tribute to my predecessor, Bob Livingstone. Bob was a truly …’
Grey grunted. One secretary of state was bound to be much like another. The president’s choice was going to make no difference to his life.
There were more important things for him to think about. He went back to his office.
Tony Evangelou followed him in.
‘Interesting, huh?’ said Grey.
Evangelou nodded. He took a seat.
Grey pulled up some market indices on a screen. There was a slight bounce going on.
‘You think this might be the start of something?’ said Evangelou.
‘You want to be careful of wishful thinking in these situations.’
‘I know. Still, if they get something together …’
Grey nodded. The response from the Chinese president would be the thing that really moved the market. If he was negative – if he was even only lukewarm – the market would be right back where it had started. If he was positive, there’d be a kick.
‘Ed, do you think we really started it?’
It was a question Ed Grey had been asking himself for weeks. Was he a pawn or was he a player? The idea that this whole crisis was the result of his decision to short Fidelian was somehow unbelievable and yet there was nothing to say that it was impossible. If he hadn’t started shorting Fidelian, would the market have stumped up the twenty-three billion when Fidelian came looking for cash? Maybe it would have. Was it conceivable that one fund, with one well-timed set of trades, had triggered a series of events that had sent the world’s markets from New York to Tokyo plunging in panic? The possibility was both terrifying and awe-inspiring. Ed Grey didn’t know if he even wanted it to be true. Part of him did for the sheer rush of being able to boast – or even merely to know – that he was the man who had moved the markets. Part of him feared it for the vulnerability it revealed of how the markets could be moved by the right set of trades at the right psychological moment.
‘I don’t know.’ He shrugged. ‘Who cares, right?’
None of that really mattered. It was twelve weeks since Ed Grey had made the decision to short the stock of Fidelian Bank, and in that twelve weeks he had seen the value of Red River fall by twenty-four billion. The fund would have collapsed entirely under the margin calls of the banks if the accounting rules hadn’t been suspended. All that mattered to him now was what position the fund was going to be in when the accounting rules were reimposed, and how he was going to make that twenty-four billion dollars back. And then some.
You could lose money fast. But get in ahead of the market, make the right set of bets, and you could make it back again just as fast.
If the Chinese president said yes to Knowles’ suggestion, bond prices were going to rocket. Equities too.
Ed Grey thought about what Knowles had said. Whatever the president claimed, he couldn’t possibly make a public proposal for a summit without knowing that Zhang would agree. There must have been a deal. In Ed Grey’s mind, an idea rapidly formed of what that deal looked like. Zhang must have agreed to get the Sudanese to hand over the helicopter pilots in return for having Knowles ask him to a summit. It made perfect sense. A deal like that would play to the constant Chinese gripe that they didn’t have enough say in international financial affairs.
And whatever Knowles said, however tentatively he presented it, neither man, thought Grey, would go to a summit if there wasn’t at least the outline of an agreement already worked out. That wasn’t how politics worked.
Tony Evangelou was thinking exactly the same thing.
As was every trader in every DIV, bank and brokerage around the world.
Evangelou raised an eyebrow questioningly.
‘We still got that cash?’ asked Grey.
Evangelou nodded. Red River had close to a billion in cash from assets they had liquidated in the last hours before the mark-to-market rules were suspended. The money had been destined for their banks to meet margin calls, but with the suspension of the rules, the margin calls had been suspended as well.
Evangelou was still watching him.
Ed Grey looked at the screen for a moment. Then he turned back to Tony Evangelou.
For the first time in weeks, he had a smile on his face. He was about to say something he had thought, in the darkest of the dark days in the past few weeks, that he might never say again.
‘Let’s get in there and buy.’