Richard wanted to steer the discussion back to specifics of the 2008 crash. “I won’t argue history with you — this could go on all day. Why don’t you walk me through the exact mechanism that was used to crash the system this time? Because that’s what’s unclear. Let’s say I buy the idea that it was orchestrated. I understand anything can be, in theory. But how, specifically, was it done?”
“Like I said, you get all the biggest banks to create batches of mortgages — securities — and create derivatives based on their performance. They made fortunes selling the securities to the world as AAA-rated paper, so they were delighted to do it.”
“I get that. They take nice, safe mortgages and create pools of them, where they’re intermingled, then sell securities backed by the performance of those mortgages.”
“Right. So what they did was create a mechanism to create garbage loans to pour into that soup of good ones, which is step one. They had their mob-controlled lending companies stuff the pipeline full of crap nobody sane would want — but because the securities were rated investment grade, nobody cared. The pools were performing well even with the junk in them because the terms on the first few years of the loans were ludicrously easy for any borrower to pay — they basically gave borrowers free money on home values that were double their true worth. The mob set up tons of appraisers who committed fraud by inflating values and encouraged the mortgage brokerage industry to commit fraud by lying about everything, using the logic that everyone was doing it. Within a few years, the entire real estate industry was one big fraud, and property values were doubling as if by magic.”
“But how did they crash it?”
“Easy. They own the company that rated the mortgage securities. When it decided to drop the ratings one day to where the AAA paper was suddenly no longer investment grade, that triggered a massive landslide of demands for alternative collateral, and the whole dirty system collapsed in a matter of weeks, because everyone was using the same crap paper for assets and had leveraged themselves through the roof.”
“I don’t understand,” Silver said. “How do you control the rating of an entire class of holdings like mortgages?”
“Can’t you guess? Your broker buddies create an index that trades based on the value of a basket of mortgage securities. One morning your rating agency downgrades the rating of the securities, and kaboom. Instant crisis. Your rating agency decides the twenty-eight securities comprising the index are junk instead of AAA, and simultaneous to that anonymous parties start short selling the hell out of the same twenty-eight securities on the index, and within two weeks the value of all real estate securities are down thirty to forty percent. Or maybe someone at the rating agency just lets slip to you what the securities in the index are, and you short them into the ground, tanking the ratings. In the end the sequence is meaningless. It's the result that counts. The banks that used the suddenly worthless paper to collateralize all their borrowing are insolvent. Nobody wants the toxic securities, even if most are actually good. Because the ratings now say they aren’t. You know the outcome…”
Richard’s face changed. He got it.
“Oh my…That would work. If you controlled the rating agency and knew when it was going to downgrade, you could short sell like mad and take huge positions in advance with credit default swaps…”
“Or you could short the specific securities and cause the ratings to drop, creating plausible deniability. That’s exactly what happened. Did you know the index used to rate mortgage-backed securities was created in 2007 by the same broker that allowed the hedge funds to create toxic pools guaranteed to fail — just in time for the index to get established as the weighing machine for the whole market? And did you also know that the company that rated those securities is based in England, and is privately owned by nobody knows who?”
“I can’t believe you discovered all this, but nobody in law enforcement has,” Silver said.
“Now you’re sounding like me,” Howard said, leaning back in his chair.
The discussion went on another ten minutes, by which time Howard looked drawn. Richard exchanged a troubled glance with Silver, and she decided to move to their final agenda item.
“Howard. There’s one thing I don’t get here. You mentioned that you’ve killed seven people. I count six. Here’s my question. Who’s the seventh victim?”
Howard’s eyes danced with merriment. “Ah. I was wondering when you’d ask. Take down this address and get a hazmat team there as soon as possible.” He recited an address in mid-town Manhattan. “The penthouse.”
Silver stared at the note she’d scribbled. “What will we find? A body?”
Howard laughed. “Nothing that dramatic. You’ll also need to instruct the team to bring a Geiger counter and radioactive material handling equipment.”
“Radioactive material?” Silver’s mouth dropped open, and she shook her head. “Howard. What have you done?”
“Don’t worry. It’s not a suitcase nuke or anything like that. What I did was go to work at my part-time job yesterday after I shot victim number six to death — the miserable prick blubbered like a baby and pissed his pants when he saw the gun, by the way. All of these masters of the universe are the same — ruthless and brave until it’s their own asses in the balance, then they mewl like kittens about to go into the river. Anyway, I went to work, and ran a morning errand I’d been planning for a long time. Left a present for one of my favorite people.”
“What present, Howard?” Silver asked again.
“You’ll see. I waited until after the maid had finished with the bedroom, and then slipped in and left something under the master of the house’s bed. He sleeps there every weeknight. I know. I’ve been working there for almost a year. All cash under the table. Not a bad gig — maintenance and custodial work, mostly. Anyhow, by now it’s done its job, so might as well get it out of there before anyone else gets hurt.”
“What is it, Howard?” Richard asked.
“Cobalt, Richard. Radioactive material. Prolonged exposure is lethal for humans. It’s in an open lead box I made myself. Put the lid back on, and there should be no leakage.”
“Cobalt. Where did you get cobalt in New York?” Silver demanded.
Howard chuckled. “Don’t be silly. You can’t get cobalt in New York.” He coughed twice. “I had to go to Jersey for that.”
“What are you talking about?”
“There’s a hospital in New Jersey that I read about closing down a year ago. Then I saw a few months back that they were auctioning off the equipment and furniture, so I went during the preview days and look around. I got to talking to one of the security guards from the auction company and asked him about the machines in the basement — big machines. Linear accelerators. CT scanners. An MRI. And some other goodies. He said that they would be sold off separately, but that some of the systems required special handling because they had radioactive material in them. Which was music to my ears.”
“Music? Why?”
“I’d been trying to figure out how to kill the final victim — the head of one of the big banks that created the crisis and profited. I couldn’t imagine any sort of death that was bad enough. Then, coincidentally, at my last exam, the doctor told me what my final weeks and days would be like, and a light went on. I knew whose death to use as the model for his.” Howard shifted his gaze to Silver. “Mine.”
“What did you do, Howard?”
“Theodore Dendt, the chairman and CEO of Grisham Caldren, spent last night sleeping the untroubled sleep of the all-powerful on his sumptuous, custom-made, king-size bed, which exposed him to enough radiation so that he’ll be dead within three days, tops. There’s nothing he can do to stop it. No cure. Money won’t help. Nothing anyone can do will slow it. He’s already as dead as if I’d blown his head off. Only now, like me, he has to get up each remaining day and spend every second thinking about how little time he has left. How his life has been terminated by someone he’s never met, for no other rea
son than because he was accessible. A target of convenience, you might say. Kind of a ‘shit happens’ thing, just like shit happened to me. It seemed fitting.”
Both Richard and Silver stared at him in horror.
Richard leapt up and pounded on the door. A second later it opened, and he disappeared, clutching Silver’s note as a guard entered the cell in his place.
Howard yawned. “How’s the head?”
“How do you think?” She slipped her pen into her jacket pocket. “You’re…you’re acting like you’re a monster. But you’re completely logical and aware of what you’re doing. I don’t understand it. How can a decent man do such things?” she asked, as much to herself as to him.
“Silver, Silver. I’m not a monster. That’s the worst part about this. I’m not insane — at least, not in the textbook way. I don’t hear voices. I don’t believe I’m pursuing God’s hidden plan. I’m not delusional. I’m simply a man without much time to live, who identified a way he could spend the remainder of his life doing some good.”
“Doing good?”
“Yes. I’ve rid the world of seven parasites who brought with them misery and sadness and suffering. Their actions, and the actions of their like-minded colleagues, have ensured that the quality of life for countless people who never did anything wrong will be diminished. I simply did what the government and the law refuse to do. I brought accountability into the equation.”
Richard returned, dismissed the guard, and resumed his position at her side.
Silver glanced at the mirror along the far wall and exhaled with frustration and fatigue.
She looked at Richard. “Do we have enough?”
“I’d say so.”
She turned back to Howard. “What are you going to do now? You keep saying you had a reason for doing all this that goes beyond revenge. What’s the grand plan, Howard?”
“I’m writing a book. I’ll have to write fast, I know. But I figure that the memoirs of The Regulator will be interesting reading to a public with a short attention span, and I can document what was done and name the names of those even more deeply responsible than the few I exterminated — then perhaps there will be sufficient awareness so more action takes place. At the very least, it will be impossible for the system to pretend it doesn’t know what was done, or by whom. That’s my final gift. My legacy.”
“Then this was all a publicity stunt for the book?”
“I suppose if you were cynical you could say so. I prefer to say this was a way of ensuring people were interested in receiving a message they need to hear.”
The interrogation lasted another fifteen minutes. After it had concluded, Howard was taken away, leaving Silver and Richard alone.
“You hungry?” he asked her.
“Not really. I think I lost my appetite for the rest of my life.”
“Want to watch me eat? I’m sloppy, and I make noise.”
“You do know how to lure the ladies in.”
“I hear my belching is irresistible.”
“Then lead the way.”
“They sent a team to the penthouse. We both know what they’ll find,” Richard said as he scanned the menu of a little Italian place two blocks from headquarters.
“Can you imagine what it would be like to find out you’re going to die in another two or three days? In agony?”
“I’d say that’s what Howard is looking forward to, only in another few months. I don’t know which is worse.”
“He’s so calm. Do you think he’s a sociopath?” Silver asked.
“You know, I really don’t. He shows regret and obviously cared about others. He even seems to care how you’re doing. It could all be an act, but I don’t think so. I think Howard is something different. I’m not sure there’s a word for it. He’s a man who’s simply seen too much.”
“That’s what creeps me out. He’s so normal. And he makes it sound so rational.”
Richard didn’t say anything. The waiter came, and he ordered cannelloni. She opted for a salad.
“It’s a hard one, Silver. I have to say I’m glad I’m not going to be on the jury.”
“We both know he’ll never live long enough for this to go to a jury.”
“It’s really the perfect crime.”
“You sound like you…like you understand him.”
“I sort of do,” Richard admitted.
“But you can’t condone what he’s done. It’s wrong. You can’t just kill everyone you think has been bad. That’s what the law is for. The system.”
“Yes. I know. But he does raise an interesting question. What do you do when the system is broken?”
“Obviously, you need to work within the system to change it.”
“Sure. But if your research has shown that change is impossible? That the bad guys are just going to get away with it because the system itself is so flawed meaningful change is impossible?”
“I don’t know, Richard.”
“If someone broke into your house and raped Kennedy, and then you discovered that it was the mayor’s son, and because it was him, that he’d never be prosecuted…what would you do? No, even better, if you discovered that he did it all the time and had never been stopped and never would be?”
“I don’t like that kind of question.”
“I know. But that’s the question he’s forcing us to consider. It’s very much like that. We know who committed the crime, we know they’ve done it before, we know they’ll do it again, and we know nobody is ever going to stop them. So what’s your responsibility in that case?”
Their food came, and they ate in silence.
After a while Silver said, “I suddenly don’t like the world I’m living in.”
“I know. Me neither.”
“Then what’s the solution? What’s the right answer?” Silver asked, putting her fork down disgustedly.
“I don’t think there is one. I think there’s just a right answer for you. I think the hard part is when you remove all the rules and have to decide what’s right, not because you’re afraid of being punished or caught, but because of what you’ve decided. For me, I think all we can do is try to be happy and be glad we’re not in Howard’s position.” Richard took another bite of pasta.
“That’s it? Try to be happy? That’s your solution?”
“I didn’t say it was a complete solution. But it’s the only one I’ve come up with. So I’ll keep going to work every day, put one foot in front of the other, put a bad guy in jail every now and then, and try to focus on the good in my life — of which you are one of the big things at the moment.”
“The good?”
He nodded. “The best.”
“Is this where we talk about us?”
“I think we just did. You want a chocolaty dessert?”
Chapter 27
The guards moved with Rob through the prison corridor, his feet shuffling due to the hobbling from the restraints around his ankles. His wrists were likewise bound, and the two huge guards escorting him towered over his lanky frame.
He had been pulled out of his cell at seven a.m. with no warning or explanation other than that he was being transferred to a new facility. No reason had been given, but he knew when he heard the words super max that his life was about to change for the worse.
The larger of the two guards grinned his enjoyment of Rob’s predicament. “Hey, buddy, I hear you’re headed to Southport. That should be fun, huh? Rest of your life in an eight by twelve box. If you’re good, you get one hour a day in the yard. Rest of the time you’re in solitary.”
“I’ll be back before you know it. They got no grounds to move me to super max,” Rob said with confidence.
“I won’t be putting any money into that pool. I hear you pissed off the wrong people.”
Rob struggled vainly against the four point restraint system as he was led to the prison loading dock, where a truck much like an armored car waited to ferry him to his new home. Three guards stood impassively by as he was ma
nhandled into the back of the truck, which was a specially constructed vault designed for prisoner transport. The driver signed a sheaf of forms, and the back slammed shut with a heavy thud. A few moments later, they were moving.
After several hours on the road, the truck lurched to a halt, and the door opened. Four guards stood waiting, and a fifth signed the paperwork, taking receipt of the former motorcycle gang chief. He glared at them. The guard that had signed for him moved into his field of vision. Rob noted that part of his face had burn scars on it.
“Hello, douchebag. Welcome to Southport. This is your new home until the end of time. There are some rules you’ll need to learn, and I’ll let the boys fill you in about them. But I’m here to let you know about the only ones you need to remember. You are not here to be rehabilitated. You are not here to improve your mental health. You are not here to operate a criminal enterprise, or network with others, or piss anyone here off, or you will find yourself in an absolute world of hurt. Contrary to what you might believe, you have no rights. You have no expectation of fair treatment. You live and you will die by however I feel, and I’m usually pissed-off that my life consists of looking after scum like you. That makes me very angry on a good day. You do not want to test that anger. It is sudden and swift, and it will land on you like a piano dropped from a twenty-story building if I even imagine you’re giving me problems. I’m the head of the day shift on your block. The night guy is not as patient or compassionate as I am. You will sit in your cell and rot until you die, which for me can’t happen soon enough. I won’t bother asking you if you have any questions because I don’t care. You are nothing. A zero. So begins the rest of your miserable life, which my sole aim is to make as unpleasant as humanly possible.”
Silver Justice Page 27