But all that was for later. Personally, Henry suspected Holland had approved of the Finden Holdings arrangement and the proprietary trading scheme it had facilitated as a way to save his share price. But it would serve no practical end to indulge in an airing of his views. What Henry needed was a functioning institution capable of playing its role as the situation unfolded. If Holland was the man who could deliver that, then so be it. Others would decide his fate.
“It’s a sad case, really,” Holland observed. “Doug was a bright guy. If anything, I probably promoted him too quickly. I blame myself for that. Obviously the pressure got to him. He lost his judgment. I don’t know if you heard about the other stuff … I hesitate to
mention it. But it seems he might have gotten into some trouble with this kid, a boy actually, might even have been underage, I’m not sure. Surprised the hell out of me. I’d never seen any indication of that. But I guess it fits the pattern. You deceive people in one part of your life, and if you get away with it, it just takes over.”
He paused here, trying to gauge his progress with Henry. Apparently doubtful of his headway, he pressed on.
“Off the record,” he said, “there’s a good chance this’ll make your sister’s life easier. I don’t think Doug will be out there in Finden much longer. He’ll have to pay his lawyers with something.”
This had occurred to Henry, though he had said nothing about it to Charlotte. Only a few days ago she had learned that her legal victory had been reversed. The news had struck her hard. Winning that case had at last justified her crusade, not only against Fanning and the town but against her larger enemy: that general encroachment of money and waste and display. Having it taken away had crumpled something in her. Her hectoring voice had grown subdued. When he’d once more mentioned the idea of moving, she had made none of her usual protests. Knowing that he was going to be in Boston, he’d asked Helen to set up an appointment at the assisted-living home that Cott Jr. had recommended, and he and Charlotte were scheduled for a visit there that afternoon.
What good would it do now to share the news of Fanning’s downfall? It would only give her false hope. Even if the man were forced to sell, the house itself wasn’t going anywhere.
He took a bite of lobster, letting his lack of response to Holland speak for itself.
“Fanning’s not my concern,” he said eventually. “Perhaps we could proceed to business?”
“Of course.”
“Let me start by saying that if you or your board is under the impression that Union Atlantic is too big to fail, you’re mistaken. There’s no question here of a bailout. If you go under, the markets will take a substantial hit, but with enough liquidity in the system we can cut you loose. I hope you understand that.”
This, of course, was a bluff. Henry had already begun receiving calls from the Treasury Department. The secretary was confident, his deputies said in their transparent euphemism, that the Federal Reserve shared his concern about market stability. Translation: the White House is watching this one. The administration, while opposed under free market theory to the government rescue of a failing corporation, didn’t want to see Union Atlantic fall apart. There were perfectly prudential reasons for this, many of which Henry agreed with, but the chatter coming out of the executive branch at the moment suggested another concern: the argument for the invasion of Iraq was hitting its stride now, and an event of this size could change the domestic and congressional equation. They didn’t want distractions. That was the gist of it. By all means avoid the appearance of rewarding speculators—no moral hazard—but now’s not the time for stringency.
Would he feel the satisfaction of justice done if an operator like Holland were brought to heel? Of course. Who wouldn’t? But whatever spleen the liberals liked to vent on the captains of industry, there were certain hard facts that had little to do with individual actors. Five hundred points off the Dow was one thing. Disruption of the credit markets was another. Dry up the lending system and the losses would no longer redound to the investor class alone. The man working for the Texas theme-park company that had been bought out with leveraged debt it could no longer service would lose his paycheck soon enough. As a general matter, particularly in the mouths of politicians, Henry disliked the use of personal anecdotes to illustrate the workings of the
economy. They were almost always a distortion, a falsely simple story of cause and effect. Truth lay in the aggregate numbers, not in the images of citizens the media alighted upon for a minute or two and then quickly left behind. Currency devaluations created more misery than any corporate criminal ever would. What the populist critics rarely bothered to countenance was the shape of things in the wake of real, systemic collapse. In Argentina, the middle class was picking through garbage dumps. The failure of Union Atlantic wouldn’t deliver the country there, but then again, these were uncertain times. And whose risk was that to take?
“I don’t think anyone’s talking about a bailout,” Holland said. “We’re talking about capital injections. I think you’d agree, the brand has value, not to mention assets. All we’re looking for is a way to reassure potential investors.”
“You’re talking to the Emirates?”
“Among others, yes. We’ve got some interest in Singapore as well. The issue is the timing. I’ve got seventy-two hours to make a margin call. That’s not very long to roll out a sales pitch. If Citi or Morgan or someone of that scale were to come on board, even in a symbolic way, it would make a big difference.”
Holland dipped his head to one side and gave a slight roll of the eyes, a gesture that combined genuflection with a modicum of fatalism. He was nothing if not a good actor. His fellow CEOs, who thrived on their relative appeal in the eyes of various corporate boards, were circling to watch the kill, despite what would be in the enlightened self-interest of their own companies—that is, to prevent a broader crisis. Meanwhile, the big foreign investors sensed opportunity but didn’t want to be taken for fools. What Holland needed was Henry’s back-channel cajoling and if not the Fed’s cash, at least its imprimatur on
the deal to save the bank. The loan he wanted was one of gravitas and prestige.
“And what if we say no?” Henry said, setting his silverware down on his plate. “What if I get on the phone and instead of suggesting the ‘community’ rally around to protect one of its own, what if I tell them you’re an awfully bad bet and that in the end the market will do its job and decide what you’re really worth? And if that’s a dollar a share then so be it. What then?”
For the first time since they had sat down, Holland’s big politician’s guile fell away and he leveled at Henry a cold stare, his act of forthrightness and contrition gone.
Henry’s instinct had been right: Fanning was too close to this man for Holland not to have been involved. He had been Holland’s instrument.
“What then?” Holland echoed, in a slower, more deliberate voice. “Well, I guess I’d wonder if that was the outcome our government actually wanted.”
“Really? Are you suggesting the Fed lacks independence? Are you suggesting we take our marching orders from the political branches?”
Holland leaned back from the table. “Come off it, Henry. I’ve spoken to Senator Grassley’s people. I know what you’re hearing from Treasury. So what’s with the civics lesson?”
In his mouth, the phrase sounded almost dirty. Incredible, Henry thought. Here he was, Henry Graves, the gray pragmatist, accused of naïveté. It made him wonder. Could it be that despite all the legalized venality he’d witnessed over the years, despite even what he would have said of himself not ten minutes ago, that he actually was naïve? That some kernel of protest had survived in him? What would that even mean? That after forty years he should stand up and say to the system
he’d spent his life protecting, I disagree? Stability doesn’t save anyone. Regulation is just a ruse to cover up organized theft and it convinces no one but the public. He didn’t believe this. And yet like some wide-eyed undergrad, like the philosophy major he’d once been, he felt an urge. A longing even. One he barely recognized.
A secretary appeared and handed Holland a note. He read it in a single glance and then crushed the paper in his fist.
“Make that forty-eight hours,” he said, shoving his plate aside. “Singapore wants its margin Thursday morning.”
Holland stood and signaled for the waiter to clear the table.
“Is that really what you want, Henry? You want to see us fail?”
I
N THE CAR
on the way out to Finden, Helen phoned to update Henry on the calls he’d missed during his meeting: two from the FDIC, an agency terrified of a bank the size of Union Atlantic winding up on its books; another from the Office of the Comptroller, whose examiners had been caught flat-footed; and two more from Treasury.
“And the chairman phoned,” Helen said. “He spoke to the chief of staff over at the White House about an hour ago.”
“I’m sure he did.”
“What am I supposed to tell him? That you’re unavailable? It’s rather implausible, under the circumstances.”
“Just buy me a few hours. I’ll be on a plane by four.”
He directed his driver through the center of Finden and out Winthrop Street to the house. As they came up the driveway he saw his sister wielding her clippers on a fallen branch of the old apple tree in the front yard. She didn’t notice the car at first and turned only when she heard his door closing. Fragments of leaves covered the front of her fleece sweater and some had caught in the strands of her hair.
“What on earth are you doing here?”
“I called you about it—our appointment. Over at Larch Brook. I told you I’d be coming.”
The dogs trotted over and sniffed at Henry’s waist.
“We had a tremendous rain last night,” she said. “This all came down in the wind. Sounded like a shotgun being fired. Woke me right up. You used to climb this tree, do you remember?”
“Charlotte. We’re supposed to be there in twenty minutes. Wouldn’t you like to change first?”
She set her clippers down. Crushed and rotting apples lay all about her on the grass.
“This was the tree you wanted to build your fort in, but Mommy thought it would be an eyesore. Which is why you built it down by the river. Did I tell you there were still planks of it left when they cut down the woods? The dogs and I went by it every morning.”
“No, you didn’t mention it,” he said. “We really should be going. I’ve got the car here waiting.”
“I have an idea. Why don’t we go for a walk? There’s something I want to show you.”
“We don’t have time.”
“It’ll only take a minute.”
Closing his eyes momentarily, he tried to marshal his patience. Every hour counted at this stage of the crisis. The markets were relentless, the system more fragile than most people imagined. Duty called now more than ever. But Charlotte … she had something to show him.
And so he followed her, around the far corner of the house, past the woodshed and into the garden. For years, she’d maintained the bushes and flower beds and small trees that their grandparents had planted. Recently, however, her attention had wandered. Thistle had
taken root along the foot of the evergreen hedge and the beds were covered in ground ivy. A bench where his father used to sit and read the paper on August evenings rotted at the edge of the path down which they walked now toward the rear of the garden.
Henry wanted to be gone from here, once and for all. To be done, at long last, with the decay of this place. How Charlotte could stand living here all these years, he’d never understood.
When they reached the field at the back, Charlotte led him down the far side of the hedge, through the dead grass, and came to a stop in front of a skeletal bush six or seven feet high and quite wide, a collection of upright, arching branches, its leaves and flowers long since gone.
“What is it?”
“It’s a lilac,” she said. “The funny thing is, after all this time, I only discovered it a few years ago. It had been hiding here behind the hedge. It’s the same shape as the one we had at home in the yard. In the springtime, don’t you remember? You used to love to play inside it. To chase me. To listen to me sing.”
How insupportable, he thought, to remember in the way she did. The present didn’t stand a chance against such a perfectly recollected world.
Just then, to his shock, Charlotte stepped toward him and taking his face in her chapped hands touched her lips to his. Smiling, her watery gray eyes impossibly close, she said, “I’m not going to visit that place, Henry.”
He tried to speak but she put a finger to his lips. “Listen. My life here, it’s not your fault. And I want you to know, I don’t regret it. None of it. I want you to understand that. I know I haven’t made it easy on you. That I’ve been a burden at times. But I’m all right. And listen … Daddy, he would have been proud of you. Strange to say that after all this time, but it’s true. He would have been proud.”
“There’s no need to be maudlin,” he said, stilling a tremble in his throat.
“You sound like me … We’ve done all right, the two of us,” she said, squeezing his arm. “We have.”
His phone rang in his jacket pocket.
“It’s okay,” she said. “These people—they need you. Go ahead.”
“This is not the end of this. You can’t stay here.”
“I know,” she said, turning them back toward the garden. “I know.”
A
T JUST AFTER
six o’clock that evening, Henry stepped from his cab onto Liberty Street and passed through the black gates of the New York Fed. Upstairs, in a conference room, his team had assembled and were already well into discussions with the exchange authorities in Hong Kong and Osaka. On Henry’s instructions, the Bank of Japan and the Japanese Ministry of Finance had been notified of the likely sell-off of Atlantic Securities’ massive position in Nikkei futures. Meanwhile, the head of open-market operations in New York was reviewing plans for the coordinated provision of domestic and international liquidity in the event it was needed in the days ahead.
“You decided yet what you’re going to recommend?” Sid Brenner asked, as Henry took a seat at the back of the room and pulled out the notes he’d written on the flight into LaGuardia. At his imploring, the assistant U.S. attorney assigned to the case had seen to it that Fanning and McTeague had been taken into custody as quietly as possible, but news of the arrests had begun to get out, shortening his time for maneuver.