The Y2 Kaper

by Jim CaJacob

  “Sure. Like when they figure more people should be unemployed just after Christmas than just before Christmas because of all the temporary retail jobs, right?" Josh said.

  “Right again. Well guess how that adjustment is made,” Scott said.

  “Some kind of exponential smoothing or whatever, right?"

  “You wish. There’s a module called, get this, the X-11 Seasonal Adjustment Algorithm. It was written, his name’s right in the code, by a Dr. Julius Shiskin, Chief Statistician of the Bureau of Labor Statistics. This damn thing is written in 370 assembler!,” Scott said.

  The IBM 370 computer had been introduced about 1970. While many programs in those days were written in COBOL, Fortran or PL/1, sometimes programmers resorted to using the computer’s “assembly” language to improve speed. For most languages like COBOL or C, the same programming code can more or less run on different kinds of computers. On the other hand, assembly language is specific to each computer. An assembly language programmer has to be a specific expert for each kind of computer.

  BLS had purchased 11 IBM 370s from IBM’s Federal Systems Division in 1969. The bid had been $39 million, which would have bought two F4 Phantoms, delivered in Thailand, at going rates. Like sailors endlessly repainting every square inch of a ship, the computer operators lovingly kept the ancient systems running. The machines even still used some card readers.

  “This is some of the most arcane shit you’ve ever seen!,” Scott continued to enthuse. “I know some math, but this guy is turning these arrays inside and out. And here’s the real kicker. This code has barely been touched since 1968!”

  Josh grunted one of those “you don’t say” sounds. “How long do you think it will take to Y2K-ify, Scott?" he asked.

  “Two weeks, minimum, on this one module. Maybe three. This old guy Malcolm was showing me how the module is integrated into the overall system,” Scott said. “Why, do you need to change our time line?”

  “No, that’s about what we figured. I was just thinking of something,” Josh said.

  Chapter 5

  Scott had never met the drummer, which wasn’t unusual. He was a young guy from Atlanta who played OK but who was too loud. This was also not unusual. C. J., the bass player, had contracted the gig and hired the drummer. There was a limited supply of guys who could play at all, and by the time C.J. had booked this gig all the regulars were unavailable.

  Two young couples, about eighteen, Scott guessed, came up to the little stage and stood waiting for the quartet to finish the tune. “Let me guess. You want us to play something more modern,” Scott thought to himself. The band played its customary fade ending. Scott looked down from the stage and raised his eyebrows.

  As usual the girls had been designated as spokespersons. “You guys are really good. Could you, like, play some more modern songs?" the brunette said. “Like, stuff we can dance to?" the blonde illuminated.

  C.J. had been playing casuals since the sixties. His repertoire included three basic genres. The mainstay was Tin Pan Alley standards played in a straight “businessman’s bounce.” I Left My Heart In San Francisco was a fine example. The standards were supplemented by a group of songs designated as “Latin.” These include several bossa novas composed by Jobim, the ever-treasured More, and Tea for Two, played as a cha-cha.

  The final genre was rock - Tequila, that sort of thing. Scott thought it was amusing that all these “modern” rock songs had been recorded at least thirty years earlier. Scott had been gigging since high school. Even in that short time he had seen the wedding music power base make a tectonic shift. In his early years, the parents of young couple were of the World War II generation. They (except for a few self-consciously hip moms, usually a bit tipsy – “I love Snoop”) despised anything later than Patti Page. Elvis was a game changer, then the Beatles. All of this music through, say 1970, could be played in a recognizable form by a wedding combo (piano, bass, drums, sax) forging an uncomfortable détente between the warring factions.

  Then there was what he called “the big four.” These were slam-dunk favorites guaranteed to tame the most savage Maryland wedding reception: Bad Bad Leroy Brown, Proud Mary, Tie a Yellow Ribbon and the failsafe slow dance, last hope of geek wallflowers the world over praying for Lady’s Choice, Feelings.

  “Sure,” C.J. said. He started playing the shuffle bass line to Kansas City. The kids danced off.

  At quarter to two Scott was at the bar at Rusty’s, listening to Ernest. “My man, I’m just saying that Coltrane put that shit away forever. We have a responsibility as creative artists to create, not to recreate. You dig?” Scott had heard this all before.

  “I agree, Ernest. But I still don’t think that means we have to dismiss the entire harmonic and rhythmic structure on which our culture’s music is based.”

  “Man, I don’t believe you’re going to remain prisoner to some changes that the Kapellmeister in Leipzig wrote down umpty-umpt years ago.” This part of Ernest’s speech was rehearsed.

  Scott and Ernest were collaborating on a recording project, if collaborating meant having a vague plan but not getting around to actually doing anything. Ernest taught Junior High music in the inner city and, like Scott, played a lot of casuals. Most of their creative work on the project consisted of arguments like this one.

  Scott felt a tap on his shoulder. Josh was standing there with his girlfriend Mona. She was one of those girls that Scott thought of as undeniably beautiful but not attractive.

  “What brings you two down here? Slumming? Mona, did you fly down from New York?" Scott said. Josh commuted to DC every week for the BLS contract.

  “Hey, man, we like jazz,” Josh said. “You know, Kenny G, John Tesh.” This last dig was guaranteed to irk any self-respecting jazz musician alive in the 1990s. Scott ignored it.

  “So Scott, how did you and Estelle get along?" Mona asked. Against his better judgment Scott had allowed Mona to fix him up with a friend of hers. Scott knew that Mona knew exactly how they had gotten along.

  “Well, I know a lot more international banking and about the new wave of Milano designers than I did before,” Scott said.

  Mona ignored the comment, put her hand on the back of his neck and whispered in his ear “She thinks you’re hot, in a geeky way. I do too.”

  Scott felt a pulse of excitement in spite of himself.

  Josh said, “Hey man, I’ve been thinking about that Y2K stuff. I want to run an idea by you. Mona won’t mind, will you babe?”

  “Why no, I’ll just sit here and listen to the old African-American gentlemen,” she said. At least it wasn’t a major pout.

  Josh said “You know how you’re always saying if the people only knew what was going on we could really change things?”

  “Yeah,” Scott said.

  “Well, what if we could blow the whole hypocrisy of the economy sky-high, from the inside?, Josh said. “What if we did the Pentagon Papers of the economy?”

  Scott turned to ask Mona to translate but she was talking to a guy at the next table. “Help me here, Josh.”

  “What if we rigged the numbers somehow to show how phony the system is?”

  “Rigged?”

  “As in decided in advance.”

  “Are you saying change the calculation?”

  “Yes, Scott, change the calculation. You’re always giving me this neo-anarchist jive about how ideas are more powerful than bombs. Wouldn’t this throw a monkey wrench in the old capitalist machinery? And with no one getting hurt.”

  “Josh, so far I haven’t heard the part where you get rich.”

  “Scott, Scott, always the cynic. Look, I care too. Besides, I was thinking of a book deal. Look at Ellsberg. He made out all right while keeping his conscience of the government credentials intact.”

  “And because we’re locked up in Club Fed we could save all of our royalties,” Scott said.

  “Ever hear of ‘by Anonymous
’?" Josh said. “Come on, man, you’re always giving me lectures about how the people don’t understand how the system is set up against them, and if they only knew then there could be real change.”

  “Let me think about it,” Scott said. He noticed that Mona had moved over to another table where four frat boy types were shouting so they could be heard over the music.

  “Keep thinking, Butch. That’s what you’re good at,” Josh said.

  Chapter 6

  Estelle was running late, as usual. Her heels staccatoed her way through the crowds on Lex, jaywalking like a native whenever possible, apparently (but not truly) oblivious to the double takes from the men - and some of the women. The Bank definitely didn’t believe in casual Fridays, especially for women. She told herself that dressing well was important to her career and was one of the good things about living here. She budgeted heavily for it and exceeded her budget.

  She used the car she kept in a garage down the street from her condo (monthly fee - $400!) about once a month, mostly to go antiquing in Connecticut. Estelle figured that the volume of antiques sold each year in Connecticut was several times greater than the actual volume of furniture produced in those years. Someone told her if you added all the supposed relics of the Holy Cross you could fill the forests of Europe.

  She was meeting Josh Calder at this little bistro on Third where she went sometimes. She figured it would be easy to get to from Penn Station when he got off the Metroliner. God knows what language the cabby would understand. The one time Estelle had used her college French was to give a Haitian cabby directions from the lower Village to LaGuardia.

  The maître-de had his French thing together, although Estelle guessed he was actually Brazilian. He was just rude enough to be authentic without totally alienating his clientele. Because of the competition in the theater district, small places like this depended on locals. He only made a small fuss about her being tardy and for arriving alone, then led her to a small table. She waited for Josh, hoping that there hadn’t been another derailment in Delaware or something.

  “Estelle, you look, well, you look the way you pay all that money to look,” Josh said. “Mona said to give you a kiss.” He gave her a chaste kiss on the cheek, trying not to commit makeup mayhem. According to Mona he never seemed to employ the appropriate level of kissing intensity.

  “I’m sure that’s exactly the kind of kiss she had in mind,” Estelle said. “I can’t believe she’s letting her little lamb chop off his leash in the wicked city. Where is she?”

  “I told her it was both important and boring,” Josh said. “Then, and only then, did I beg. Seriously, I need to pick your brain about something. It’s kind of urgent.”

  “Can we order?" she asked. The captain was eyeing their table with a worried frown, as though there was a line around the block.

  With the help temporarily assuaged, Josh got down to business. “Your bank is big in currency trading, right?.”

  “Unbelievable. Something like twenty billion a day.”

  “How does it work?" he asked.

  “It’s all done by computer,” she said. “The currency people set parameters for the relative values of the currencies. The nanny whatever you call it second that the ratio hits one of those parameters the computer automatically buys or sells a predetermined large amount.”

  “And how do the people forecast the ratios?" he asked.

  “That’s where the real mumbo-jumbo happens,” she said. The bank pays these gurus some unbelievable retainer to analyze the economies. “Like we say, ‘every Ph.D. has an equal and opposite Ph.D.’.”

  “Analyze the economies?”

  “You know, decide how many goods and services you can buy in America for a buck versus buying the same stuff in Spain, or wherever. I’m not an economist. Do you know the definition of an economist, by the way?" she said.

  “Tell me.”

  “Someone who is good with numbers, but who doesn’t have the interpersonal skills to be an accountant.” She looked pleased with herself.

  “I can’t believe it. A banker joke.” Josh said. “So, tell me how these gurus decide how the relative value of an economy changes.”

  “It’s apparently pretty simple. They start with the premise that a country has a certain amount of stuff, assuming they don’t suddenly strike oil or have a coup or something. Remember, we’re talking about big numbers here. Then they monitor key economic indicators like unemployment, gross national product, investments, inflation. Then they apply their formulas.”

  “Inflation, huh?" Josh asked. “How do they figure that?”

  “They don’t have to. At the exact time of day of the exact day of the every month the government releases all these statistics. Different ones on different days of course,” she said.

  “Like the unemployment figures and so on,” he said.

  “Right. You mentioned inflation. The main inflation measurement is the Consumer Price Index,” she said.

  Estelle had let Josh pick the wine, although she was pretty sure she knew more about French whites than he did. A girl who didn’t learn how to avoid bruising male egos would not do well in this city in her line of work. She was feeling a pleasant flush. Josh’s cell phone rang.

  “Calder,” he said. “Hey. Good. Right on time. Sure, she’s right here.” He handed over the phone and said “it’s Mona.”

  “Oh really?" she said, rolling her eyes. She took the phone. Apparently Mona made some small talk about letting Josh take Estelle to dinner without her. Estelle and Mona had the kind of relationship where they trusted each other because they both understood that they couldn’t, when it came to men. Estelle said “don’t wait up”, hung up and gave Josh the phone. “I love her to death, but I swear,” he said.

  “Take it as a compliment, sweetie,” Estelle said. “Where were we?.”

  “So the way these guys make or lose money is based on how well they guess how these factors are going to change, right?" he said.

  “Right. They’re pretty good in the long run, or they don’t last for the long run,” she said.

  “If a person knew how one of these factors was going to change in advance would they know which way the currency would move?" he said.

  “Not exactly, maybe, but certainly at least the direction. Are you and the brilliant Mr. Crane working on a cyber-ouija board? And why is ‘O U I J A’ pronounced "wee-jee", now that you mention it?” She was definitely feeling the wine.

  “Nah. Scott’s trying too hard to be the next, the next, you know, I don’t even know the names of any of the people Scott wants to be the next of,” he said. “Who are these people that do this trading?" he continued.

  “It’s a pretty small group of hot shots in the big central and international banks. The big players know each other,” she said.

  “Do you know any of the overseas people personally?" he said.

  “Sure. I probably get three dinners a month schmoozing various international people. Full service banking, I call it,” she said. “Well, not exactly full service. They wish.”

  “Estelle, you know me. I’m going to ask you something that I don’t want you take in the wrong way, OK?" he said.

  “Why Josh, I know how your devious little mind works. That’s one of the reasons why I, I mean why everybody loves you,” she said.

  “Thanks, I guess. You’re right, I’ve got something up my sleeve. We have a shot at making some real money, totally on the up and up, of course.”

  “Of course,” she said.

  “Seriously, Scott has one of his ideas. But we need to talk to one of these traders who is, shall we say, a creative thinker,” he said.

  “You mean greedy,” she said. “I know just the guy. Hansi. Hansi from Zurich. The one the girls call ‘Handsy’.”

  “Sounds like just the guy,” he said.

  Josh paid the check. Estelle furtively glanced at the tip and decided it was withi
n the acceptable range, if not exorbitant. The maître-de gave the customary disappointed eyebrow-raise in any case.

  It was a clear night so they got a cab right away. Estelle pulled Josh in by the hand, holding on a second longer than necessary. “Downtown,” she said.

  Chapter 7

  Hansi Renggli took the S-Bahn from his home to the airport because he was Swiss. He flew first class to New York because he was allowed to. He stopped at Sprüngli and picked up a half kilo of sweets, then spent the rest of the 90 minutes until boarding time in the first class lounge. The same faces were sneering at the same buffet of canapés.

  Several of his fellow first class passengers wore jogging suits and shoes, as though they might get in a game of tennis in mid-ocean. Hansi wore slacks, a blazer and his brown Bally loafers.

  The westbound flight was much more civilized than the red-eye back: breakfast at home, a passable lunch on the flight, dinner in New York, and a good night’s sleep. Or, if he was lucky, a better night of not enough sleep.

  Once again first class was mostly full of American tourists cashing in frequent flyer miles. He ignored any attempts at conversation and took a series of short naps.

  The very thought of taking the bus and subway from Kennedy to Manhattan was an entirely different matter. He got in a cab driven by the customarily unpleasant little man from somewhere on the subcontinent. The drive to the Plaza took 35 minutes. In spite of everything he had heard for the past few years, New York always looked to him like an Italian dustbin.

  After a shower and a change of clothes he felt fine. He went to the lobby bar, where Whit and the girl were waiting.

  “Hans! Wellkommen,” Whit said. He pronounced the ‘w’ as a ‘w’, not a ‘v’. J. Whitmarsh Lodge was a senior trader at the age of 31. With him was a tall, good-looking brunette in a suit. Hansi was pleased to note that the trend in hemlines continued upward this month.

  Hans did his best not to wince at the boy’s frightful German.

  “Hans, I’m sure you remember Estelle,” Whit said.

  To be honest, he didn’t. Hansi saw no reason at all to be honest.

  “Of course. How nice to see you again, my dear,” Hansi said.

  “I hope you don’t mind if Estelle joins us this evening,” Whit said.

  “Quite the contrary.” Hansi said, staring at Estelle’s smirk.