Day III

“Through me is the way into the woeful city; through me is the way into eternal woe; through me is the way among the lost people. Justice moved my lofty maker: the divine Power, the supreme Wisdom and the primal Love made me. Before me were no things created, unless eternal, and I eternal last. Abandon every hope, ye who enter!”

These words of color obscure I saw written at the top of a gate; whereat I said, “Master, their meaning is dire to me.”

And he to me, like one who knew, “Here it behooves to leave every fear; it behooves that all cowardice should here be dead. We have come to the place where I have told thee that thou shalt see the woeful people, who have lost the good of understanding.”

Dante Alighieri, The Inferno - Canto III

Early in the year 2010 a curious thing happened in the oil markets—Nigeria surpassed Saudi Arabia in total monthly exports of crude oil to the United States.  Over 980 million barrels per day arrived at US terminals from Nigerian production. The Saudis sent no more than 850 million barrels per day. Few people even knew of the subtle shift, and fewer cared as the ”Great Recession” with its “Jobless Recovery” continued to dominate headlines.

Yet Nigeria’s importance in the overall US energy picture would soon gain even more prominence. America’s #2 supplier after Canada was Mexico, and PEMEX  had been unable to halt the dramatic and precipitous decline of its major field at Cantarell. Then, when Hugo Chavez signed away development and delivery contracts for Venezuela’s Orinoco heavy oil fields to China and Russia, imports from the #3 provider to the U.S. also went into decline.

Thus far the flagging demand due to a sluggish economy had kept a lid on oil prices and masked the real consequences of these underlying conditions.

But all that was about to change…

11

Delta Blues

Ben Flack peered through the Plexiglas, and didn’t like what he was seeing. Dawn was breaking in the Niger Delta, and it was not to be a quiet day. Off in the distance, obscured by the morning haze over the water, it was clear that a whole lot of trouble was heading his way. He had been on the phone for the last hour, first with Wade Hanson of Crowley & Company, yammering that one of their three Invader class tugs, the Galveston, had been boarded up river. The other two beat a hasty retreat for the delta waters and the open sea, narrowly evading the militias. Thank god the American Salvor class boat got out safely after the rig was finally set and in place in the mangrove swamp up river. But Galveston was officially his problem now, on top of fifteen other problems that would stretch from here all the way back to Bollinger Canyon in Sunny California.

The Chevron brass there did not like the news this morning either, and they let him know about it in no uncertain terms. He had been on the phone with some middle tier pencil pusher turned weather man. “The whole Gulf is shutting down for Hurricane Florence, Flack,” the man had lectured him. “This damn thing is going to make a direct hit on Houston. All the refineries will be off line, you understand? We’re losing Conoco Phillips, Valero, Exxon/Mobil, Deer Park, Premcor, Marathon Ashland—the works. Now we’ve got to make sure production stays up out there, right? This thing should hit Galveston Island in five hours. You need to clean that mess up there and get flows back up to speed ASAP. We’re looking for any loose tanker traffic we can get our hands on. I expect we’ll have something for you soon. Negotiating with a small British carrier now, in fact. You just get on top of this business and see to things. Galveston’s practically under water now, and god only knows what’s happening out at sea on the platforms and rigs. You completed that rig set in the delta, right? ”

Yes he had finished the set, and yes things looked manageable, but no he didn’t think there was adequate security in the region, and yes it really did seem like this latest flare-up was going to be worse than the last, and no he didn’t know where his numbers would be just yet, but yes he’s have readings as soon as he heard from the pump stations up river, and yes they had enough in the line to start tankering if a carrier could be found, but no he couldn’t guarantee the flow pressure just yet, and on and on it went.

So Galveston Island was going to get slammed. The thin barrier island near Houston was now under mandatory evacuation. The Feds were particularly pointed about it, saying anyone left on the island was facing almost ‘certain death.‘ Ironically, he had his own little Galveston here to worry about.  How was he going to get that damnable tug back? If the raiders parted that sucker out to the Chinese, the insurance tab would be charged to his operation. Was the crew safe? Real violence against western oil men had been rare in the Delta but, after that ominous news feed the rebels put out the night before, all bets were off. He would no doubt have to bargain for the crew’s release, and he wasn’t sure he had much to bet in that game.

As for local threats, all he had at the moment was the Rig Boss and his side arm. He squinted through his binoculars, not liking the sight of those damnable fast lighters the rebels had out on the coastline. Where was MOPOL? What the fuck were they doing? Probably running all over the Delta trying to tamp down one little incident after another. The pink dawn was starting to silhouette some of the up-river facilities. There was an unwelcome plume of smoke riding up on the hazy morning air.

He stared at the FAX he had received from San Ramon. They were already papering over the news with an official statement being readied for the press. “We are working with all appropriate government agencies and community leaders to try and restore peace and stability in the area and will resume normal business... etc., etc.”

Fat chance of this getting air time in any case, not with Florence bearing down on Houston this morning. Chevron had weathered far worse storms than this one. The oil kickback payment scandal involving Saddam had cost them damn near $30 million in settlement. It had taken some of the luster off the company, still basking in their big Gulf of Mexico discovery of September, ’06.

Some news, thought Flack. The press latched on to the story and claimed we could increase total US proven reserves by 50% with the find, but Flack knew better. It was four miles deep, and mostly gas, right in hurricane alley. Clarifications and explanations had come later, with lower revised estimates on the potential of the find, but the public never cared a whit about any of it.

Press had not been as rosy in recent months. His operation was down last May in the last militant surge in the Delta. A company man had turned up dead in Kazakhstan—never good for PR. We get one lard ass judge to throw out a suit involving alleged toxic waste dumping in our Ecuador operation, then another lard ass judge rules that Nigerian villagers can go to trial in San Francisco in a lawsuit seeking to hold the company responsible for some locals that got shot up by security during protests involving company facilities in way back in 1998. The sloth of the judicial system amazed him.

Then there was the refinery fire in August of last year that had cut production, the protestors rally the following March in Richmond by a bunch of Bay Area anti-war pansies. Ecuador was back again, this time upping the ante to a $16 billion dollar lawsuit on behalf of aggrieved “Peasants and Indians” claiming the company’s Texaco operation had soiled their little corner of nowhere in the jungle. The Chevron management called the action a “judicial farce” but hinted they were open to reaching some amicable agreement. It would just take a little more money in the right hands to shut these stooges up for good. Then the City of Richmond itself started to put the thumb screws on the company a few months back, with City Council voting to cap crude refined in the area because of “public health concerns.” What a load of crap. He’d like to see how long they hold to that line once the price of oil went ballistic again, as it certainly could with the news on the wires today. 

Oil had kissed $145 a barrel again, and all the dumb ass drivers were wringing their hands over gasoline above $4 a gallon. Imagine that! It had been well over $6 in Europe for years, but soft bellied Americans were squealing and squirming like wild pigs because it was costing them a bundle to fill up their gas guzzlers these days.

When the SEC inspectors started to crack down on futures speculators it was amazing how oil prices came falling down by leaps and bounds. They actually fell below the $100 mark for the first time since April of ’08, and closed at $101.18 after a brief rally. Dirt cheap, thought Flack. If the public knew ten percent of what it was taking to keep the fuel moving stateside, they would know how good they have it at four fucking dollars per gallon. Christ, milk was twice that price. Why weren’t all the pansy assed liberals out protesting the dairy farm industry?

The press on this little flare up was the least of his worries. What was he going to do about the Galveston, and what were those damn river lighters up to yonder? His mind invariably went to Timmermann and his Merc detachment. Where the hell were they? He’d put in the emergency call five hours ago. Company helo has been out for hours, but no mercs. How was he supposed to fend off the locals with the Rig Boss and his sidearm? How was he supposed to find the Galveston, let alone her crew. And what was this new shit about tanker traffic being routed his way? Did they think he was about to start loading operations under these conditions? He’d need security, damn it, and lots of it. Then he’d be lucky if he had any line pressure left to even get flow started.

Second quarter output for Chevron had slipped to the lowest level since 2005. Q3 was equally depressed. Flack had news for the Bollinger Boyz—it wasn’t going to get any better. Sure, the company signed that Newfoundland development deal for the Hebron field. That was 220 miles off St. John in some pretty wild seas. It was an old discovery in any case, logged way back in 1981. Nothing like trotting out the old dogs when times get tough, eh? We weren’t going to pull anything close to the 700 million ‘recoverable’ barrels out of that rat hole. Not even close. And that was going to be the new par on this course for the foreseeable future. Production was down, and Chevron was not the only company hurting right now. It was going to get worse, and it was going to get mean.

“Mudman!” Flack yelled so he would be heard over the constant iPod flow into his technician’s head.
“What’s up, Flackie?”

“That shit out east looks bad. I think we may be getting some uninvited visitors soon. Where’s the damn helo?”

“HellifIknow,” Mudman ran the words together as he chewed on another granola bar. “Nuthin’ on radio for hours.” He was distracted by the small TV set where he was watching the local news feed out of Port Harcourt.

“Well we’re missing a goddamned tug!” Flack ran a hand through his thinning hair. The sweat on his brow a fine sheen in the morning humidity.

Mudman looked at him, his jaw slack. He was pointing at his TV monitor, waving Flack over. “Think I found it,” he said with a solemn tone.

Flack was at his side, his eyes rolling with disgust the instant he saw the image on the screen. It was the Galveston, surrounded by lighters full of gunmen, and her blindfolded crew all lined up on the foredeck.

“What a load of crap,” Flack swore.

“Shot her up pretty bad,” said Mudman. There was obvious damage to all the wind screens and siding on the tug.

Someone just let loose with a Kalashnikov in the air, and the scene became a jubilant little hostage fest. “And look, isn’t that a Caverton Helo?” The Caverton Offshore Support Group had a small fleet of helos providing shore to sea lift services to any number of commercial interests in the region.

Flack squinted at the screen. “Yeah, that’s Caverton, alright. Looks like their Lagos field operation.”

“Well, shit!” Mudman pointed at the screen. “Looks like they’ve got a full scale evacuation going on.” The scene shifted in a jerky motion. The camera man was running. There was an explosion and the Caverton Helo careened onto the tarmac, its main rotor spinning wildly out of control, the craft engulfed in flame.

“Christ almighty…” Mudman just stared. “…everything living and unliving…And every other unthinkable vice…” He repeated the threat he had made light of earlier in the rebel press release, suddenly realizing they just may mean what they said this time.

“Gonna need Timmermann,” said Flack. “Where’s the damn mercs? Where’s MOPOL?”

He had a real case of the blues this morning, and the long day had just begun.
 

12

Contracts

Alberto Salase was a business contact out of Senegal, with a well developed local network in the region, aboard for a privileged visit with a potential new client.  And a privilege it was, thought Iverson as he ushered the portly black man into the dining room. Elena Fairchild was not one to allow such a face to face meeting, at least so early into a business relationship. The normal protocols would have seen Salase jumping one middle manager after another, and then proving himself before being admitted to the inner circle of the Fairchild executive offices.

But the rapidly evolving oil situation was shaking up all the old protocols. The Georgia fiasco had swept away long standing plans by any number of major producers courting operations in Central Asia. Putin had shown them just how easy it was to put his thumb on the jugular, cutting the pipelines they had vainly tried to build to flank Russian soil. And when the oil didn’t flow, the money stopped flowing as well. Fairchild was a realist at heart, he knew. The company had relied on Persian Gulf contracts for the last several years, but now she wanted out, and was keen to make new inroads in the turbulent Gold Coast of Africa. Eliminating the long trip around the cape, and leaving the dangers of the Gulf behind, offered considerable savings in but operational costs and peace of mind.

A boson’s mate smartly piped the captain’s entry and announced the guest of honor. Elena Fairchild was already seated at the executive table, and she rose to greet the two men as they approached, dressed smartly in a form fitting pants suit, pale blues, with a plain white blouse flaring open at the neck, accessorized by a gold scarf. Her dress was smart, yet more functional than anything else, the clothing loose fitting so she could breath  in the humid sub tropical climate they were sailing in.

She was a middle aged woman in her late forties, though her tall, athletic figure had held on very nicely through the years, and she still had a youthful aspect, in spite of a fleck of gray that she bravely allowed in her dark hair, when most women would have rinsed it away years ago. She could have been a marathon runner if she had had a mind for the sport—certainly had the legs for it, though her pants suit gave her a prim and almost androgynous appearance. And she was not one for the ornaments of jewelry, allowing herself a pair of white pearl earrings and a silver Claddagh ring on one hand.

The simplicity of the ring suited her well—the circular bands ending with two hands clasping a heart, and a crown above. It was not a wedding band, in the traditional sense, for she had never married, though it could be used to signal a person’s romantic availability, or lack thereof, depending on which hand it was sported, and on which direction the hands and heart were faced. The ring was one of a matched set of three, and two other people were fortunate enough to wear the remaining Fairchild bands, all three betrothed in a web of friendship and fealty. The rings were vintage, dating back to the time of Queen Mary the second, and few knew who held the other two, just one of the many veils of mystery that surrounded the woman.

Iverson often thought the crown above that heart was a fine symbol of the loyalty she had for Queen and country. Fairchild had served British interests, making a small but vital contribution to the UK’s energy position, for over twenty five years. He had signed on as Fleet Captain nine years ago, earning the trust and confidence of his CEO with diligence and due respect. The Argos was a nice little reward, a ship that any other captain in the world would be proud to sail. His relationship with ‘madame,’ as he often called her in formal situations, had been cordial, professional, and strictly business, though he had to admit a growing attraction for the woman had developed in him over the years. He admired her resolve, the constancy of her temperament, the tight control she had on her emotions in the boardroom—a woman to be reckoned with where cutting a deal required a fine edge.

But yet there was a definitely a woman behind the corporate mask she so carefully maintained, and he had become fascinated with the quiet solitude that surrounded her, pleased that he had been drawn even closer to the inner core of company operations over the years. He had to admit that the occasion of finding himself alone with her, now a close confederate and even a confidant in many ways, had meant a lot to him. With no Mr. Fairchild he even entertained a fleeting notion that he might become involved with her one day, though he had never expressed anything of the sort, or pushed that agenda in even the subtlest of ways.

Oh, there had been other suitors to her hand, in and out of her life over the years. The latest was this Filby, a royal rat out of Yorkshire, with a bit of a pedigree, a foppish manner, and a lot of investment capital. He never quite understood what she saw in the man, deciding it was that nice fat bank account in time. So now, when he noticed the change of circumstances as Ms. Fairchild extended her hand to greet Salase, he was secretly pleased. The Claddagh ring had always been worn on her left hand, signaling an unmarried status, but something was different. Now the hands, heart and crown faced outward, while before they had faced inward. The inverse had been true for the last year with Filby in the picture. Lord, was that simply for propriety’s sake or were they actually—he put that thought out of his mind. But now Elena was signaling her recent availability for romance, as least as far as the tradition was concerned. He warmed to the thought, pleased. He was about to make the introductions but, true to form, Fairchild took the matter in hand.

“Mr. Salase, how good of you to join us,” the Fairchild smile radiated her steely beauty, her dark eyes carrying genuine warmth, but an intensity that was very penetrating. Her hand seemed smallish when engulfed in Salase’s substantial palm.

“My pleasure, as always, Miss Fairchild. You do me great honor.”

“Captain,” Elena smiled and nodded in Iverson’s direction, and they were seated with little more fanfare.

“I hope you had a smooth ride over,” Elena carried the conversation forward.

“Very pleasant,” Salase returned. “Good weather. Clear skies and open seas. Perhaps a good omen, eh? Good weather for business.”

Elena smiled, for Salase was conveying more with his words than it seemed. Of course there had been a round of negotiations on lower levels before this meeting was ever agreed to. Salase clearly felt matters were now favorable for a close, she thought. She certainly could use a new angle right now. Fairchild & Company had been angling for additional business on the Ivory Coast for some time. Salase was well connected, with a good intelligence network to boot. With tensions rising in the Persian Gulf, her need to close a deal had taken a sudden, urgent turn.

Her fleet of seven commercial ships, five tankers and two large freighters, had been somewhat idled of late. Fairchild had been hauling oil from Kuwaiti terminals in the Persian Gulf, but she wanted out. There had been talk of trouble with Iran for the last several years. Israel, the only known nuclear power in the Gulf, wanted to protect her status quo. She had been chafing at the bit for an air strike on Iranian nuclear facilities for months now, put off by President Obama’s obvious reluctance to plunge the region into chaos.

As the Fairchild tankers returned, one by one on their delivery routes to Milford Haven in the UK, she held them in port instead of sending them out to sea again for the next scheduled shipments.

Recent developments, aside from the rising insurance premiums on Persian Gulf tanker traffic, had convinced her that it was time to move her traffic to safer climes. The difficulties in Georgia a couple years earlier remained a real problem. Israel had been sending advisors to Tibilisi, and providing drones and light weapons to the Georgian military for counterinsurgency operations against her two breakaway provinces, South Ossetia and Abkhazia. Israeli manned drones had been used to overfly southern Russia and Iran in recent weeks. Rumors circulated that the Israelis were setting up airfields in Georgia for use in a planned strike against Iran.

Then Saakashvili, the firebrand Georgian President, had let the cat out of the bag with a violent reaction to operations conducted by South Ossetian irregulars. The newly armed Georgian military, all of three light brigades, thought to simply decide the matter of the breakaway provinces in one quick operation. They had Israeli advisors, American good faith, lucrative oil pipeline deals involving Turkey, Israel and the US, and the nascent membership application to NATO, and they were feeling just a little cocky.

Georgian troops rolled into South Ossetia, just as then President Bush and Putin sat down in the bleachers for the opening of the 2008 Summer Olympic games in Beijing, and the heavy artillery started flying shortly thereafter. It was a rather blunt and overblown use of force on the part of Saakashvili, but the world was equally surprised by the Russian response. Putin called the flare up of violence “unfortunate,” and said a response was coming, for South Ossetia was largely populated with Russian citizens, and ethnically inclined to old mother Russia in any case.  Russian ‘Peacekeepers’ had been involved in the incident, with several dead.
The response came in like a bad storm, with the Russian 58th Army. Fairchild knew it would be a mistake to dismiss the continuing cauldron in Georgia as nothing more than another squabble in the Caucasus. There was a longstanding project to transport oil from the BTC pipeline in Georgia via the Israeli oil terminals at Ashkelon and Eilat, the money side of Israeli involvement. Russia had been intent on bringing the region back under its control for some time, and the incident provided a perfect opportunity to kill two birds with one well aimed stone—perhaps three. Russia would pre-empt Israeli preparations for their Iran operation, rescue her nationals in Georgian territory, and post a strong knight in the center of the regional board, hampering Western opportunists keen to feed on Caspian oil and gas.

With the Taliban insurgency preventing construction of pipelines through Afghanistan—after all, that was what led to the collapse of Enron just before 9/11—Georgia’s importance as an access point to the Caspian Basin increased dramatically. Old Neo-Con plans, all outlined clearly in publications by the “Project For A New American Century,” focused on the necessity of linking the strategic resources of the Caspian Basin to those of the Persian Gulf, under US or Western control, of course. To succeed, control of the transit routes for this oil and gas must be maintained, which is why the US had been cozy with many of the small Central Asian breakaway republics after the fall of the Soviet Union.

With Russian influence minimized, the US gambit under Bush and Cheney used 9/11 as a grand pretext for war. They invaded Afghanistan, establishing bases in Central Asia and flanking Iran to the north and east; then invaded Iraq, securing its vast reserves of light sweet crude, flanking Iran to the south and west and driving a wedge between Iran and its ally Syria.

The grand prize was Iran itself, of course. Anyone can go to Baghdad, but real men go to Tehran, went the Neo-Con mantra. They had been planning their return ever since the ouster of the Shah and the rise of a hostile regime there under a more radical Islamic government. All of the belligerent Bush rhetoric concerning the non-existent Iranian “nukes” had been in the service of this goal. The threats, the sanctions, the military strike options that had been discussed about Iran for years, all aimed to secure this last great prize in the eight year Neo-Con romp through history on the back of the Bush presidency.

Russia, weakened and embittered after its internal collapse, had made a remarkable recovery of late, largely based on the strength of its energy position in the world. Gazprom, the Exxon-Mobil of Russia, was the largest extractor of natural gas in the world, with over 16% of all known reserves. It was also instrumental in providing natural gas to the Ukraine and other European countries, all through pipelines it controlled on its sovereign territory. The Russians sat on the sidelines as America flexed its military might in Afghanistan and Iraq, but all that had changed after Georgia.

Recent months had seen Russian missiles retargeted to Europe, Russian Backfire bombers positioned in the south to cover the Caspian and Persian Gulf regions, the return of Russian naval escadras to the Eastern Med, including their prize carrier Admiral Kuznetzov. And a sister ship of the Argos, Peter The Great, the fourth and last battlecruiser built in the Kirov Class, was also steaming at this very moment for naval exercises with the Venezuelan Navy. Things were all getting very strange on the geopolitical chessboard and Elena Fairchild was a bit edgy about it all. The Russian invasion of Georgia in 2008 was perhaps aimed at cutting the last Western link to Caspian Oil and Gas the US has been courting since 9/11. The entire focus of the Bush-Cheney administration had been about influence and control of the oil and gas of the Middle East and Central Asia. Russia, once out maneuvered, defeated and dismissed, was now back in the game.

But Fairchild knew things were not so simply defined in this volatile region. Israel was still aching to strike Iran, but could find no support from the new Democratic Obama administration in the U.S. The collapse of the US housing market, nationalization of Fannie and Freddie, and a host of other financial ramifications made another preemptive war of choice a path of strategic madness for America just now—and Putin was a shark that could smell the blood in the water from miles away.

When Bush and Putin chatted in the Olympic bleachers back in 2008, he already had Russian tanks moving south into Georgia. They had, in fact, been pre-positioned months prior to the crisis, for the scale of the Russian response to Georgia’s aggressive maneuvers was quite telling. Russian intelligence was still potent, and  the 58th Army had been put on alert, ordered to move rapidly to support South Ossetia with elements of the 20th Guards, 19th and 42nd Motor Rifle Divisions. These forces were joined by units of the Russian 76th and 98th Airborne Divisions and the 45th Spetsnaz, a special operations reconnaissance regiment. The three light Georgian brigades supported by a single independent T-72 tank battalion were no match for such overwhelming force, particularly considering that the Russians used extensive air support as well. A Russian version of the “Powell Doctrine” was clearly evident. They had no intention of committing lighter forces that may become embroiled in any protracted fighting in Georgia, a lesson the West should clearly note, she thought.

Damn, thought Elena, Russia was back on the high seas again, and the  two great powers were back to their
old games again, both flexing their muscles and thumping their chests with “planned” military exercises and a lot of threatening press on both sides. The stakes could not be higher. In this climate, Elena Fairchild, like any good mother, wanted all her children closer to home.

She had two freighters in Brazilian waters, now heading east to anchor briefly off Porto Grande with full holds of sugar cane before continuing on home to the UK. Of her five remaining tankers, two were home at Milford Haven getting ready for the next contracted haul. Two more were north of Porto Grande, due here tomorrow for a special mission—if all went as she hoped it would tonight. All her Persian Gulf contracts were tabled now. She was thinking about picking up something new tonight, perhaps a quick relief run to American ports if Europe had any  stores of gasoline they might release. With empty tankers already at sea, she’d be three days ahead of the competition in any such venture. She could get to the oil first, and being first on the scene, in war and in business,  had some very real advantages.

The situation in the Persian Gulf also prompted her to immediately recall her last oil tanker there, the Princess Royal. The biggest ship in her fleet, she was a Large Range 2 class vessel of 100,000 tons capable of transporting a million barrels of oil in a single haul. The ship was now outward bound to the straits of Hormuz, pregnant with crude.  It was a bad time for any shenanigans in the Gulf. She had bank notes due on the Argos refit at the end of the month. Credit was very tight on the world market, and she knew there would be no way the Bank of London would extend. She had to come up with a cool $200 million cash, and half of it, possibly more, was riding in the belly of Princess Royal.

Stupid to leave my big lady alone like that with Argos at home for replenishment, she thought to herself. Stupid not to take the intel briefings seriously on the Gulf. Israel was again flying maneuvers over Lebanon.  She wouldn’t put it past the Israelis to strike out on their own against Iran at any time now. The whole damn show over Georgia in 2008 was also about Iran, she knew. Near the end, Dick Cheney had been shuttling back and forth from Georgia to Kiev, trying to toughen up the line against Russia, but nobody paid any attention to him with Change.gov poised to take the helm just a few months later. Cheney was even dissed by the president of Turkmenistan, who refused to meet the man at the airport. He was finished, outmaneuvered by Putin and savvy Russian businessmen, his Great Game in Central Asia was finally over.

The lame duck Vice President ended his trip at the elite Ambrosetti Intelligence Forum in Italy. Elena remembered reading his general remarks just before dinner as he bravely tried to rally support against the resurgent Russians: ‘Russia cannot presume to gather up all the benefits of commerce, consultation and global prestige, while engaging in brute force, threats, or other forms of intimidation against sovereign countries... No part of this continent should leave itself vulnerable to a single country's efforts to corner supplies or control the distribution system.’

Lord, what a load of hypocrisy! That man had spent the last eight years leading invasions of sovereign countries and desperately trying to corner all the oil supplies and control related distribution systems. Now Putin was showing him the game has many moves. Russians always could play chess, she thought.

But her thoughts were now focused on the Gulf more than ever. With Black Sea ports closed, Nigeria up in arms, the North Sea fields all but dead, the importance of the Persian Gulf as a major source of oil supplies for the West was renewed. And there she had her biggest asset, loaded to the gills with light sweet crude and all but unprotected. Damn, she thought, I should have had Argos round the Cape of Good Hope weeks ago to keep watch on Princess Royal. Very stupid move on my part.

“A little bad weather south,” said Salase, smiling broadly, nose flaring. He was referring to the recent outbreak of violence in the Nigerian Delta.

“Bit of a squall?” she probed innocuously.

“Perhaps something more,” said Salase.

Elena Fairchild, simply smiled at the ante, calling her guest at once.  Salase glanced at the Captain, unaware of his status as a member of the company’s inner circle, and not knowing if he was to be privy to the information he might now disclose.

“I assure you, we are all friends here,” she said, settling the matter. Salase smiled, nodding to the Captain, who returned a polite smile as he folded his hands, listening attentively.

“In fact, let’s speak plainly, Mr. Salase,” said Fairchild, the light of the chase in her eyes. “What does the weather forecast have in it that I should be concerned about this evening?”

“Opportunity, perhaps,” said Salase.  “Lots of trouble in the Delta. Umbukiru and Kura clans rising now. A bit of the blood feud between them, but all set aside when there are so many Western interests to feed on. “

“Indeed,” said Elena. “Enlighten me.”

Salase smiled. “Contracts,” he said quietly. “Unexpected windfall in the storm, eh?”

Fairchild leaned forward, her chin resting on her palm, elbow on the table, in contravention of all good etiquette. Business was business, and they were only just starting to receive hors d'oeuvres. The main course would come in time. Salase wanted to nibble a bit, probably to see what percentages he could ferret. She would hear him out. He lowered his voice, glancing at the departing table servant .

“We heard something of interest,” he said, his accent heavy, yet engaging. “A lot of trouble in the Delta, and trouble in the Gulf as well—both Gulfs. Big storm bearing down on Houston, big trouble brewing in the straits of Hormuz as well.“

That last bit got the attention of both Fairchild and Iverson, though the doughty lady showed no emotion on her face.

“I don’t ship anything to Houston, my good man.”

“But you do ship in the straits of Hormuz. You have a ship there now, eh? Big ship in a bad place.”
She smiled, waiting for him to make more of a point. Her worries over Princess Royal were in no way evident on her face.

“Well this business down south in the Delta now,” Salase edged forward. The hurricanes have everything shut down for the Americans. Always trouble, only this year very bad. The storms pile up, yes? The refineries shut down. Going to be a lot of demand for quick deliveries to offset that shortfall. Oil supplies in Europe are very weak right now.”

“I see,” Elena was pleasantly interested, still showing no undue concern. “You’re suggesting I divert my at sea shipments to American Ports?”

“Perhaps. I can get a very good price for you—very good. You take Princess Royal home, what do you get? Fifty pounds on the barrel. Her majesty, bless her heart, is very consistent, yes? But by the time your shipment gets round the Cape of Good Hope you could get very much more in an American port. Very much.”

“No disagreement here, aside from the fact that Fairchild serves the interests of the Crown at the moment.”

“Ah…” Salase grinned, a little hesitation in his manner now. He reached for the glass of wine the waiter had just delivered, giving the moment a little air.

“The Crown has many interests,” he said. “Also many servants. Much can happen in troubled times.” He ate an olive, and a bit of cheese, dabbing his thick lips with the monogrammed table linen napkin.

“One should always remain open to the possibilities — particularly when financing is so very hard to come by, yes?”

That last remark had hit a nerve, Iverson knew. He was hinting at the big payment coming due on the Argos refit at Bank of London. Fairchild didn’t like people nosing into her banking arrangements, but her features were as placid as the bay at Porto Grande, where the sun was setting now and casting a lovely glow on the water.

“And what good fortune!” Salase smiled again. “You have lots of empty ships that need filling.”

“I didn’t know you were so privy to our shipping manifests.” It was clear that he knew a lot more than he was hinting at, the berthing status of her ships could be viewed on the Internet by any inquiring soul, but she wanted to give him a gentle nudge in the ribs just the same.

“Oh, pardon me,” he feigned an apology. “My nose is a big as my ears. I can’t help hearing things, and I’m always keen to smell out a new opportunity for profit, yes?”

“Well it’s very clear that you smell one here.” The tone of Elena’s voice shifted a few points to starboard. She was leaning into business now, the pleasantries over. “Do go on, Mr. Salase.”

“Well,” he said, also sounding a bit more serious now.  “These two tankers you have at sea…They left port three days ago, but nothing was mentioned of their destination. I couldn’t find them on any of my registry schedules for the big ports you service.”

“Imagine that,” Elena said flatly.

“Oh, I will, imagine,” Salase came back quickly. “I’ll Imagine they might be close at hand, but when I looked for them on the flight in there was no sign. Just this beautiful vessel I am privileged to visit here now.” He waved his hand expansively. “Lots of empty tonnage out there somewhere, “ he finished. “I may have a contract for you.”

Iverson glanced at Fairchild, and she at him, ever so briefly. Salase couldn’t see it, but it was clear to the Captain that his boss was interested.

“Well,” Elena began, “assuming these ships were close by, and assuming they were still empty, or had any chamber room available to take on more product, then what would we be talking about?” Elena was holding her cards close to her trim, yet ample chest, but still ready to draw.

“It’s all in the weather,” he beamed, then lowered his voice, eyes wandering with a casual, conspiratorial glance from the Captain to his Executive in Chief.  “We picked up a communication from the American Chevron operation in the Niger Delta.” He was all business now. “They have more trouble than you’ll ever read about on the news wires. Call went out for mercenaries, but the local constabulary is preoccupied in the upper desert just now.” He was referring to the Timmermann  group, a German security firm that had been doing a brisk business along the lines of the American Blackwater organization. There was never a slackening in the demand for security these days, and it came at a premium.

“My, this is getting interesting,” Elena gave him her most engaging smile, and it had just the effect she intended. The excitement in his eyes was obvious as he continued, hoping he had a good chance of closing a lucrative deal tonight.

“More even,” he began. “We’ve received formal requests for any spare tanker capacity in the region.  They want it in the Delta, as soon as possible, eh. And here you have these ships close at hand perhaps?”
Elena Fairchild knew all about Chevron’s call for tanker support. It was, in part, the reason she had Princess Marie and Princess Angelina at sea. She also knew that her vessels represented 80% of any spare tanker capacity within 3000 miles at the moment. Her network had intercepted the Chevron radio phone call three days ago, and it was clear that the move could net her a tidy contract here.

“Close by?” She decided to tease him a bit. “We’re nearly two thousand miles from the Niger Delta.

“Four days,” Salase had calculated the distance the ships could travel at the maximum speed of 18 knots.  “May I make an informed guess that you also have a security contingent aboard? Helicopters? Why not fill both requests for your American friends?”

“Mr. Salase, there’s an American Carrier battlegroup passing north of our position even as we speak. Lots of helicopters, sailors, not to mention about a hundred lethal strike aircraft. “

“Ah, yes, one of their presidential ships, if I am not mistaken.” He addressed the remark to Captain Iverson, who nodded in the affirmative.

“CV Roosevelt,” Iverson said quietly. All the big American carriers were named for their presidents.

“Yes, yes, well I wouldn’t count on Mr. Roosevelt visiting the Niger Delta. As significant as the operations there may be, there are, how is it said… bigger fish to fry.”

“And these days fish are usually fried in oil,” Fairchild quipped, her point obvious. Then she leaned in, with even more obvious seriousness in her tone. “Alright, Mr. Salase, I have two empty tankers with a million barrel capacity between them four days north of the Niger Delta. And I have the ship you are dining on this evening, to make sure they arrive and conduct their business without any problem from the locals. And yes, I have helicopters as well. We won’t be making a purchase, you understand, just providing conveyance of the oil, and security. What’s the offer?”

“I knew you would see the opportunity inherent in the current situation,” Salase exulted. “I have a firm offer from a basket of Niger Delta operatives. All negotiations have been managed by my firm in Senegal. We can offer you a conveyance premium of twenty dollars a barrel.”

“I’ll want five dollars a barrel on top of that for the risk,” she said immediately, catching him just a bit unprepared.

Salase shrugged, feigning difficulty. “That will not leave me very much on the margins.”

“Come, come now, a good middle man has any number of ways to pad his invoice. Twenty-five a barrel for conveyance. What’s the destination?”

Salase brushed a crumb of bread from his lips, eyes wandering as he spoke. “A familiar route,” he began. “It’s why your company is just the perfect carrier—“

 “Where?” She let just a little impatience enter her tone.

“The Royal Vopak’s Banyan Terminal in Singapore.” He said it quickly, taking a sip of wine and watching her over the rim of the glass as he finished. For the first time tonight, he thought, I have my hand up the prissy little lady’s skirt—if she would but wear a skirt. She walks about in trousers and thinks it fashionable. Women in business! What is the world coming to? His smile betrayed nothing of his thoughts as he set down the wine glass.

“Singapore?” She gave Iverson a quick glance. “You mean to tell me the Americans are in a tizzy with this hurricane Florence business shutting down all their refining capacity, and they want to move the oil to Singapore?”

“Strictly business,” said Salase. We arranged a buyer in Beijing, and they’re offering a premium price. The Chinese are very cash rich these days. They can out bid virtually anyone on the market, any time they choose. And it appears this is such a time.”

“I see…” Fairchild gave herself a moment to digest this news, a bit angry that her own people didn’t have the information, the name of the buyer, the destination port, or any of this latest twist in the offer. “The almighty dollar,” she breathed, “such as it is these days. I suppose Royal Dutch Shell is in thick as thieves on this deal.” Vopak was a large independent Dutch tank terminal operator, with 78 locations in over thirty countries. They had a venerable history, dating back to 1616 when groups of weighmasters and porters began offering weighing, sorting and storage services at Dutch harbors for the cargo shipped in by the East India Trading Company.  In fact, they had received and stored the very first shipment of oil to the Netherlands, in 1862, and proudly displayed a photo of the event on their web site.

“Of course,” Salase dropped any semblance of  pretense now. It was time for the close. “So what would you like to do?” He waited, knowing that the person who spoke next would come out on the losing end of the deal. The English bitch would most likely have many more considerations, which he had all anticipated before he landed here tonight. There would be mileage, hazardous waters, not to mention that she was obviously trying to extricate herself from many of the waterways her precious tankers would now have to travel en route to Singapore.

But he knew she could only make good on 50% of the capital Bank of London was calling in next month, and that was assuming her precious Princess Royal made it safely through the straits of Hormuz. She badly needed the other 50% on that credit rollover, another hundred million dollars. With everything in the States shutting down, there would be ample business there for emergency shipments. Perhaps she could get $150 a barrel for the cargo Princess Royal held. She would still need another fifty million in that unlikely event.

The Atlantic would probably heat up very soon. Shipping orders were starting to come in at any of a number of big European ports. But the cargo they needed to deliver was nowhere at hand. It would take time, precious weeks, if she decided to work her normal channels in the Persian Gulf, and she would get no more than $15 per barrel for timely conveyance on any of those deals. Fairchild was well ahead of the game, with good shipping capacity four days north of a very motivated producer right now. She needed the deal, and he knew she could see the obvious advantages of what he was offering her. He would work it so that she would stand to earn at least $30 million on this caper, and that would get her just a little closer to solvency when she sat down with her bankers next month, assuming she would still be able to walk after the good hard fucking he was about to give her in these negotiations. Yes, he had his hand up her skirt now, in a manner of speaking, and in a minute he would have her legs open as well.

“I’ll need another two dollars for mileage,” she began predictably, and he knew he was going to close the deal.  “That’s round the Cape, all the way up the east African coast and across the Indian Ocean, very dangerous waters these days. Somali pirates and such…”

“To be sure, but you’ll have to assume some risk in the venture. “

“For another three dollars on top of mileage,” she said flatly.

“Lord almighty,” he breathed. “I’m losing all my profit!” He was lying, of course, and he knew that she was well aware of that fact, but these matters had a certain choreography about them, and he was expected to make some protest at this point, which he did. “That will come out to thirty dollars a barrel,” he said, trying to sound distressed.

“Done,” said Fairchild, “providing Captain Iverson sees no security risk that would preclude our operations in the waters described.” She gave him a quick look, knowing what his response would be.

“We’ll handle the situation well enough, I suppose.”

“Very well,” Fairchild was ready to move on to dinner.  “I suppose you brought contracts?”

“Well, this is all very sudden,” said Salase.  “I was hoping for twenty-eight a barrel but—“

“Thirty, and if we run into any trouble, at either end or any time while we’re in transit, you pay any cost that isn’t reimbursed by the insurance carrier.”

“But—”

“And if, by any God forsaken stretch we should lose a ship on this little venture, then we collect double over premiums. That’s a long term loss, and the insurance will hardly compensate me for revenue shortfall until I could replace the vessel.”

The little bitch thinks she has me by the balls, he thought, secretly amused. Now it was time for the final act. “Well…” he hesitated just long enough, appearing flustered and cleverly using his napkin to dab his brow, but he knew he had her legs open now, figuratively speaking. He had planned to give her thirty dollars a barrel, and by god that’s exactly how it played out.

“You drive a very hard bargain,” he said. “Alright, you need thirty, I’ll close for that, but not a dollar more. He extended a hand, with a sinister grin on his face. “Deal?”

“Done,” she said, shaking on it. Fairchild was disgusted by the man, presuming he could come in here and dicker with her on conveyance and security charges for an operation like this. The little surprise on the destination cost her a step in the dance, but she had made a good recovery, pushing him up another five dollars a barrel, when she might have settled at twenty-five under normal circumstances.

“If you manage to take delivery at anything close to your float,” Salase said at last, “then you might be well on your way to paying off that credit chip coming due next month, eh? How wonderful. Let me see... If I am not mistaken you say you have at least a million barrel conveyance capacity at hand. That will make this a thirty million dollar haul at the price we’ve negotiated. I’m sure you’ll find some way of coming up with the remaining seventy million you need for the Bank of London.” He smiled. “Assuming, of course, your sell what you are presently holding at current market prices.”

“I beg your pardon?” Elena shifted slightly in her chair, and for a moment it seemed that Salase might indeed have a hand on her leg, though both his well padded paws were resting comfortably on the table now.

Elena composed herself, tamping down her annoyance at the man’s manner. “Yes, I’ve a hundred million sitting in Princess Royal, dear Mr. Salase—and that’s at current market price, as you so wisely note. I’ll expect to get closer to $150 a barrel on that oil, if not more by the time I get around to delivering it. What with all this hurricane business at Houston, the Americans will be paying top dollar. Pity they can’t get their own oil producers to stop selling to the Chinese, but that’s life, I suppose. It is also life that no hurricane has struck British shores of late, and so I may be well tempted by your suggestion that I sell to the Americans, loyal servant of the Queen that I am.” His smile had a bit of a barb to it now.

“So, if you know so much about my financial arrangements,” she continued, you can see I have my credit call well in sight. I’m wagering Princess Royal is carrying at least $150 million in her holds right this moment, and perhaps more. This little thirty I’m picking up here for simple conveyance is just a nudge in the right direction. That would put me at $180 million, and I can take the rest out of petty cash.” She smiled sweetly.  “Argos was going to set sail for the cape tomorrow in any wise. We’ll just settle this business in the Nigerian Delta first, take on cargo there when my two little princesses arrive, and then have a nice vacation in Singapore. “

“Is that so?” Salase beamed. “Then you will have need of  great hurry. Yes, I should have known you would have this deal well thought out. A very formidable businesswoman, yes? And of course your intelligence services would have the very same information that came through our network yesterday.” He let that hang a moment for effect, and could almost feel her resolve falter a bit. It was the sweetest moment in any close—the moment when you reveal that one last tidbit of information your adversary had failed to consider. Yes, her legs were wide open  at last, he thought. Now for the coup de gras.

“Information?” She raised her eyebrows, ever so slightly, “what exactly are you referring to.  I’m afraid I have to confess the destination on this little run did come as a surprise. I underestimated the greed of the Americans—sell their own damn oil to the Chinese while Houston gets slammed by a hurricane.  Can’t stack that up against my good sense for profit when I see it.“

“Of course,” said Salese, still smiling. “No, I was referring to the information on the security situation in the Gulf. It seems your Princess Royal is going to hit a mine some time tomorrow. You knew this, of course. “ The certainty of his remark was a nice sharp jab, and he could almost feel the woman jump.

Elena was taken aback by the statement. What was this bloated pig of a man talking about? Going to hit a mine? She could feel the heat rising on the back of her neck. Her people should have had this—a direct threat to a company ship? Good God, what was going on here. What did this man know that her intel service could have so blatantly missed? She fought down the anger.

“Of course,” she said at last, though her face had turned a shade paler. It was the first noticeable loss of control Iverson had ever seen her suffer in a public negotiation, and he knew she had been completely surprised by the information. There would be no rest on the Argos tonight, he realized.

Dinner was served, thankfully just at that moment, giving Elena Fairchild a brief cover to compose herself. But as Salase eyed the sumptuous fare, he could feel the woman’s discomfort, and she would sit there and take it as long as he desired. At least until dessert had been served. Oh there would be little run ups of conversation aimed at ferreting out the scope of the threat, a trip to the powder room so she could scream shrill orders over a radio and notify the Captain of Princess Royal. And then she would be begging the Americans in the Gulf for a frigate to escort her precious little princess through the Straits, based on ‘credible information from an unnamed source,’ of course. 

It was great to be a man, he thought. Women had no place in business matters like these. He was going to enjoy his dinner. The poached salmon looked particularly tasty tonight.
 

13

Maneuvers

It started like any normal day in the Gulf.  Shipping traffic was getting underway, after a long night taking on a wide range of crude and distilled oil and gas. Princess Royal was only one of a number of very large tankers scheduled to transit the straits of Hormuz. Already bloated with Kuwaiti crude, Fairchild & Company had a lot riding on her safe return. Exercising a futures contract written when crude was still well below $100 per barrel, Elena Fairchild had managed to fill her largest fleet tanker for just $70 US per barrel. The price had already doubled in the 6 months since she signed the contract, committing a major share of the company’s remaining operating capital to the deal.

She had steamed that the contract was not redeemable until October this year, when oil had kissed $145 a barrel just two months earlier. It had fallen precipitously since then, settling at $101 as Princess Royal started her final run home. The Americans were manipulating the market again to soften the collapse of their banking system. Fairchild was pulling out of the troubled Gulf region for the foreseeable future, and the message her captain had received the previous evening was ample reason for the move.

When the company owner and CEO interrupts a business dinner to make an emergency radio call to your ship, you listen very intently. Princess Royal was to be put on full alert, its modest crew to be on watch for any close approach of light craft. All four 50 caliber machine guns were to be deployed on deck, with orders to shoot first and ask questions later should any craft get within 500 yards of the giant tanker.  The captain was to launch his motorized cutter and sail it half a kilometer in front of the vessel at all times, with a party of seamen scouring all points of the compass, with particular attention to anything seen floating in the water.  She was obviously worried about mines, but had little understanding of how they really worked. He had no doubt that the Iranians had rocked assisted mines on the floor of the Gulf even now, and these could be triggered simply by the passing of a massively hulled ship like Princess Royal. They could come rocketing up from the sea floor at any time.

In spite of the hair raised by such a call, the morning voyage had been thankfully uneventful. Princess Royal had passed Abu Musa half an hour ago, a small arrowhead shaped Gulf island that had been disputed by Iran and the UAE for some years. Iran had settled the matter by simply occupying the island, along with two other little rocks north of it, Tunb as Sugrah and Tunb al Kubra. The three sat astride, or flanked, the main deep water shipping lane of the Gulf, waters the Princess Royal had to navigate as she steamed for home. Now she was just at the technical maritime boundary between Iran and Oman, on her last leg up towards the Musandam Peninsula where she would enter the southernmost shipping lane and make her dog-leg right turn around the peninsula, officially entering the Straits of Hormuz.

~ ~ ~

Abu Musa was a barren little island, with a small harbor at its western end, served by a sandbar quay. Seven small craft had been berthed there when Princess Royal made her closest approach to the Island. Six were there now. A single paved road circled the small island, which was bisected by a  single runway air strip that extended all the way across from the western harbor to the east shore. Colonel Andar, the Island’s military commandant, was not at his desk this morning either. He had taken to his armored SUV an half hour earlier, heading for the east coast.

A bit behind schedule, and with no air traffic due to land for hours, Andar decided to simply drive down the long concrete air strip rather than taking the longer coastal road. He had just arrived at the far end of the strip, ending just yards from the eastern shore of the island, and was sitting in his vehicle listening to Radio Teheran while he watched the sumptuous rear end of the British flagged Princess Royal through his binoculars as she headed into her turn in the distance.

He checked his watch, knowing the seventh patrol boat would be coming round the sharp southeastern tip of the island at any moment. Officially he no longer commanded seven patrol boats. One had been sent home to the Iranian mainland three days ago for scheduled maintenance, or so the files would read now. Officially, this boat was never even in his harbor, and the fuel and munitions she loaded the previous evening were never in his inventory bunkers as well. It was amazing how unknowing and oblivious the government could be, he thought with a wry smile.

He was here to witness the event that would change the world in a way that few could imagine just now.  9/11 had been called a day that changed everything.  The anniversary of that event had just passed uneventfully, with nary a word from Osama bin Ladin. His second in command, Zawahiri, had chided the Islamic fighters the world over for not striking harder against the infidel occupiers. He had claimed they were in league with the devil Americans now, fearful of Iran as well. They should be fearful, Andar thought. And the Americans should be fearful as well. They had the impudence to threaten Iran, and lecture her as to what she might or might not do. Their lap dog Israel was always yammering, straining at the leash. But the era of Bush and Cheney was long ago finished, and this new president had no stomach for war, in spite of his foolish preoccupation in Afghanistan.

The operation today had been carefully planned. The American carrier group, headed by CV Lincoln had steamed into the North Arabian Sea on the final leg of her six month tour some days ago. The rotation cycle saw her relieved by the Ronald Reagan there, and Lincoln was already well across the Indian ocean, sailing for Pearl Harbor.  The new ship was still in the North Arabian Sea, supporting operations in Afghanistan, which had been heated up on schedule to draw American interest there. Fighters in Iraq had been ordered to quiet down for the very same reason. Teheran had dictated the pace of activity and the Afghanistan theater was brought to a high boil. Reagan would stay in the Arabian Sea. It was all planned.

He smiled as the patrol craft, which he knew nothing officially about, came into sight on schedule to his right. It was making a gradual approach to the lumbering supertanker, soon to cross the fading remnant of its wake, but never to get close enough to raise any alarm.

The Americans and the British—meddlers, thieves, bullies, brigands, would soon see what their adventurism may cost them. Princess Royal was about to have a few problems. Their man aboard, worked onto the crew eight months ago, should be active now, and ready to create the diversion necessary to make the impending attack a great success. It was only a matter of time.

~ ~ ~

The problem started in the central cooling lubrication system for the 911 engine on the Princess Royal. It was a small problem at first, because that was the way it was intended. But, like all small problems, it grew like bad yeast until the engine driving the bloated tanker ship was critically hot, and about to seize up under the strain.
The bridge crew on the Princess Royal noted the problem while it was small, and reported it in the sterile language of command protocol as required.

“System variance on propulsion.” An Ensign noted the yellow light on his status board and went on with his report. “Engine is too hot. Fault indications on cooling control relay number seven.”

“Compensate.” Captain Durkin was busy with other thoughts, his eyes always ahead, watching his cutter leading the ship carefully into the Straits of Hormuz, and the narrow shipping lane he had to traverse. He gave the order that should have corrected the problem under normal circumstances—but sabotage was not a normal circumstance.

“Switching to number seven backup.” The Ensign toggled a switch on his panel and waited, noting the readouts. “Temperature variance is now within normal range. I will tag unit one for maintenance.”

“Very well.” The captain heard what he expected out of the corner of his ear, and moved his concentration back to the shipping channel map he was focusing on.

But things were not well at all. A small device attached to the comm-lines feeding the engine system monitor, intercepted the corrective signal and chopped off its head. It sent a facsimile of the messenger back to the central status board on the bridge, and told a lie. The signal indicated that failing systems were all in order. The Ensign on the bridge believed his eyes and did not think it necessary to run a diagnostic on the relay. It was a small lapse, and not one he would ever be faulted for.

Five decks below, a man was moving quickly through the lower levels of the ship. His heavy shod footfalls echoed in the dark and then came to a sudden halt. There was no one else in the corridor with him. No one came this way when they could avoid it, particularly if they were in a hurry. The route he was taking was normally used for maintenance and repairs to the outer hull. There were manifolds and gratings of scored metal stored away here, like the scales of a dragon waiting to be welded into place to heal any wound that pierced the outer shell of the vessel. Now he stood before an oval hatch painted a musty gray and branded with a band of red letters.

EMERGENCY EXIT  -  909

Exit nine, Deck nine, well below decks and aft of the pump room where he had just placed his plastic explosive. It was essential that this unit be disabled if the plan were to have its greatest success. The pump was capable of moving 3,000 cubic meters of product off the ship per hour. It must never be permitted to begin such an operation.

This exit would now lead him to an outer hull hatch, where a welded steel ladder reached down to the sea. That was just where the man wanted to be,  but he had one last task to perform. He reached a gloved hand and opened a maintenance wall cabinet to expose rows of grinning terminals and a tangle of color coded electrical  nodes. The computer module he had just installed was activated with a touch of his thumb. He keyed in a series of instructions on the rudimentary number pad, and then pulled a small cable from the unit and attached it to one of the nodes inside the wall cabinet. The KGB was still useful for some things. They had been willing to program and deliver the device so his cell could carry out this mission.  Now, when he opened the outer hatch, no report would reach the Bridge. It would operate just as the device he installed to sabotage the engine cooling readout.

He rotated the access clamp and the hatch opened with a dry rasp. Exit 909 was one of many escape routes positioned at regular intervals on the ship. He doubted that any of the others would be used this morning. And if, for any reason, he was prevented from making a safe exit here now, he would gladly sacrifice his life for the mission at hand. The Princess Royal was only a few minutes from her dog-leg hard right turn, well into the southern sea lane now, and in the bowels of the Strait. God willing, it was a day that was about to become an eternity.

Time was ticking off in the man’s mind as he slipped through the hatch and started down ladder 909. Time was ticking...

~ ~ ~

“Engineering to Bridge.” The Bridge PA crackled to life, diverting the captain from his map work. He reached for his hand set, flicking the send button and speaking into the mike.

“Durkin here. What is it, Mister Connors?”

“I have major system failure in the primary engine monitors. Engine temperatures are way out of line, sir.”

Durkin looked at his Ensign. “I thought you said that problem was corrected now, Ensign.”

“Aye, sir. Monitor reads cool and green.”

The captain raised an eyebrow. “We have no readings here on the monitors,” he said into the phone.

“That’s just it, sir, I have no readings here either, but I can feel it. The damn engine is hotter than a hornet’s nest. I’m advising a shutdown at once, Captain.”

“A shutdown? We’re just about to come right in the channel. Get a hold on yourself, Mister Connors. We need more than your intuition for an engine shutdown. Have you checked this out?”

“I can’t get through the access panel, sir. It’s been welded shut!”

That got Durkin’s attention at once. “Welded shut?”

~ ~ ~

That was a nice bit of work. The man on exit ladder 909 was listening to music on a ear plug now as he completed the last few moments of his service on the Princess Royal. He forgave himself for the weakness he had for Western music, but it was a trait that fit well in his charade here these last eight months. Devout Muslims, at least those of his stripe,  do not listen to the Beatles, but he indulged himself this morning.

He thought of the four tiny welds on the corners of the engine diagnostic access panel—a nice quiet job that would cause just the delay needed. The diagnostics panel would stay shut long enough to prevent the crew in engineering from realizing the full nature of their growing problem. In a few seconds it would be too late. Just the time he needed to transit this ladder and make good his escape. The light weight breathing apparatus would allow him to enter the warm Gulf waters and remain submerged just long enough to rendezvous with the patrol boat.  They were the other half of the mission team, following quietly in the wake of the lumbering tanker with yet another big surprise.

He secured his face mask and turned up the volume on his ear bud. A simple ten count was all the time left to him now. Perhaps he would hear the blast when his detonation exploded in the pump room. Everything was going as he expected.

Far aft of the ship, the crew of the fast patrol boat, still well out of range of the meager machine guns they saw manned on her after decking, were ready. The missile they fired at Princess Royal was soon streaking away toward ship, now a massive target as she turned abeam to present the full length of her hull.  It had a long way to go before it would reach the tanker, but  a few minutes later the target was shaken with a fatal convulsion.

At zero-nine-hundred hours, the temperature in the engine reached critical levels. By that time the engineer had hold of a welder and had burned away three of the four welds on his diagnostic access panel. He threw the equipment down with impatience and grunted as he wedged the panel aside with his hands to get at the system monitors.

“Oh my God!” He uttered a fitting prayer to the deity, but no one was listening. The engine seized up, and seconds later he heard another explosion near the engine in the pump room. What the hell was going on here? He ran for the comm-link, but was shaken from his feet when the third explosion happened. The missile fired by the patrol boat had struck Princess Royal amidships, in her centermost tanker compartment, and exploded in a blazing red fireball, igniting the petroleum there and creating a massive fire. The crew on the decking rigs just above the impact point died within seconds as a corona of fire and smoke flared up in a massive immolating cloud. A hail of debris, the twisted remnants of the seared tanker hull, went tumbling away in the wake of the blast and joined the flotsam of the Gulf.

The three men on the phantom patrol craft passed a moment of jubilation, the fire of the explosion reflected in their their eyes. Then they quietly slipped their SCUBA mouthpieces in place and lowered themselves over the side. When they had reached a safe distance the team leader would ignite the small charge in place beneath the patrol boat’s hull. It was just enough to open the hull and sink the vessel, and a second, larger charge would go off fifteen minutes later, when she was well beneath the turbulent surface of the Gulf, obliterating all trace of the boat.

Aboard Princess Royal, the man on the escape ladder did not even wince when the shock wave rocked the great tanker. He simply smiled, eyes rolling to heaven in gracious thanks. The job was done, like any other assignment, and now he bent himself to the next task at hand. He reached the bottom ladder rung, five feet above the water line, and dropped quietly into the turbu lent sea.  He was a very strong swimmer, and would easily reach the nearby shores of Abu Musa where he would join his jubilant comrades in just a few hours time. Until then, he had only his prayers, and the music in his waterproof ear bud, a special song he had selected, just for this moment.

“Said you’re traveling on the one after 909...”

The Beatles seemed to have words for almost any occasion.

~ ~ ~

On the bridge of Irene Reliance, a Greek flagged 40,000 ton container ship moving up the Gulf, the Watch Commander leaned forward of the wheel to make certain his eyes had not deceived him. His jaw hung open in disbelief. The Duty Officer had just reported a fireball where The tanker Princess Royal was making its hard right into the shipping channel in the straits.

“What happened? Did you see what I think I saw?”

 The duty officer pointed to the video imaging system, recording the forward arc of the ship as it navigated the constricted waters. It was a protocol now required by the tanker insurance industry, as a way of documenting any potential collision at sea.

“Activate camera two and then play number one back again!” The Watch Commander wanted to be absolutely convinced before he took any action, but the playback did nothing to ease the sickly feeling in his gut. He saw the streaking shadow lance at the heart of Princess Royal and watched the fireball envelop the vessel amidships, expanding out in a massive explosion. The Watch Commander rubbed that spot on his left elbow that always started to throb when the world went topsy-turvy on him.

“Signal the Director’s Office,” he said slowly. “Tell him we think the Princess Royal has had some kind of accident. No…tell them we think she was deliberately attacked. Indications are there was a major explosion aboard, but we think she was struck by a missile.” He raised his voice. “Traffic control!”

“Sir?”

“Anything ready for immediate launch?”

“We have one cutter ready on 15 minute notice sir. “

“Notify the Captain. We may be involved in rescue operations. Helmsman!”

“Aye?”

“Slow to 5 knots.” With a sinking feeling he realized he wasn’t going to follow Princess Royal into the straits any time soon. He would need a course plot to the nearest port, most likely Port Rashid at Dubai. They had shut down most commercial traffic there in March to favor newer facilities at Jebel Ali, but the port was still there, damn it, and this was going to be an emergency situation. Who had fired the missile? Was his ship next? But for now, the law of the sea tugged at him. He would see what he might do to help the stricken ship ahead, but his decks were stacked high with over a hundred steel shipping containers, and the safety of this vessel would have to come first.   Princess Royal was on fire and blocking the channel ahead. If she sunk the channel would be closed indefinitely. He would need an emergency berthing at a local port, and that quickly.

“Order the lighter to be ready to make way. Mission is search and rescue—Full medical team! I want complete video documentation on this console from now on. No tape rotation. You save every inch of footage. Understood?”

“Aye, aye, sir.” The Duty Officer fed the orders down to the Launch Bay. Then the Watch Officer reached for the handset to call the captain. All their lives were about to become very complicated now.

14

ASPRON-4

Arkansas Anchorage, was established 80 miles from Dubai in the Persian Gulf to support US military operations in the region. It was home to ASPRON-4, the Military Sealift Command's fourth “Afloat Prepositioning Ship Squadron Four,” though officially she did not exist. The squadron was de-listed from the service rolls once the major movement of equipment to the Gulf had been officially completed. Unofficially, she still had a number of vessels at anchor, for contingencies that came up more often than bad weather in the volatile Persian Gulf. And with the Ronald Reagan group on the other side of the Straits of Hormuz, in the North Arabian Sea, ASPRON-4 was one of the few remaining navy units still available to quickly respond to the theater commander once reactivated. This was not a combat outfit, but the unit had four large, medium-speed, roll-on/roll-off ships, each one packed to the gills with pre-positioned military equipment, munitions and supplies for the US Marines.

They were going to be needing them soon.

Al Dhafra Air Base, located about an hour outside of Abu Dhabi, was one of the first US facilities to receive word on the incident involving Princess Royal.  It had been home to the Air Force's 763rd Expeditionary Air Refueling Squadron in support of Operation Southern Watch during the pre-war years of containment for Saddam. At that time it used U-2s and Global Hawk spy planes to keep an eye on the Iraqis. Now, ten years later, nearly 300 US personnel were still deployed at Al Dhafra facility, though she had no teeth.

For that the ball was quickly passed to Balad airfield in Iraq, where the flight controller inside “Kingpin,” the base control tower, was monitoring at least 100 aircraft in flight over the battlespace at that very moment.  The base had seen a quiet ‘surge’ of its own in recent months, as the Air force beefed up its presence and operations in Iraq. The big B-1s had returned, as well as fresh squadrons of F-16C fighters, the first of the advanced ‘Block 50’ version, equipped with a high-tech cockpit helmet allowing the pilot to aim and fire his weapons at a target with a simple head movement. The base had also doubled its ISR component in the last two months, an acronym that stood for Intelligence, Surveillance, Reconnaissance.

When the word came in that a tanker was on fire in the Straits of Hormuz, Balad went to red alert at once. The Air Force would be calling on all these services, and then some, in a matter of minutes. The Kingpin tower commander immediately diverted a pair of F-16s to overfly the scene, and a Global hawk was on the tarmac in ten minutes, ready to take a high resolution look at anything happening in the vicinity of the incident.

Further east, at the main port of Jebel Ali, the light helo carrier Iwo Jima was already slipping her moorings and getting ready to put to sea. Aboard were elements of the 26th Marine Expeditionary Unit, with ten helicopters of varying types along with a squadron of five AV-8 Harrier type jump jets. The Marines had everything they would need to perform their signature mission—take and hold enemy ground by amphibious assault. And if anything was lacking, or needed by way of replenishment, ASPRON-4 would serve it up on a platter when the leathernecks called.

The Americans were quick to react to the situation. Carrier Strike Group Ronald Reagan was already alerted to the trouble, and the Navy was revving up operations in the Arabian Sea. First and foremost on their minds was the safety of other shipping now using the Straits of Hormuz. If this was a terrorist attack, aimed at shutting down the vital channel, the US Navy was well equipped to respond.  The guided-missile cruiser USS Chancellorsville, and  destroyer USS Gridley were steaming in the van and ordered to the Straits at once. Additional support was nearby. The USS Ardent, an avenger-class Mine Countermeasure Ship, would accompany the two fighting ships into the narrow waters.  Planes and helos from the big carrier provided a thick top cover for the operation.

The situation was quickly confirmed as a deliberate attack. Already major media stations like CNN had picked up Al Jazirrah video feeds of the wounded Princess Royal, which was now breaking news. The question that hung in the air like the darkened pall of thick black smoke over the stricken tanker, was whether or not she was in any danger of sinking, and thus blocking the channel. She was not, but that information was known only to Fairchild & Company personnel at the moment.

The navy acted as though the viability of the shipping channel was under immediate threat. They called Port Fujairah in the UAE for quick tug support when reconnaissance  indicated the ship was in no immediate danger of sinking. Intel had a line on a patrol boat that had been picked up by  cameras on  a container ship following some ways behind Princess Royal when she was attacked.

US Intelligence was quick to put two and two together. They scoured satellite imagery on the Gulf Islands they had been monitoring for some time. Last week’s archive showed seven boats in the harbor on Iranian occupied Abu Musa, the island closest to the point of the attack. Photo specialists at Navy Intel were quick to match the satellite imagery with the video footage obtained from the container ship. They had found their smoking gun.
The information was routed directly to the office of the Vice President, and then on to the White House. The briefing to the President would indicate, with a high reliability, that this was a deliberate, and state sponsored attack on a British registered oil tanker, and no mere incident of simple terrorism. Within minutes, US forces in the Persian Gulf were brought to an elevated state of readiness, and the phone was ringing in the quay bunker at ASPRON-4.

Her Majesty’s ship Ark Royal was happily en-route to the Eastern Med at the time, sailing to rejoin the US Roosevelt battlegroup. She had participated in “Operation Firestone,” a naval exercise held off the Carolina coast a month ago, sailed home briefly, and then put out to sea again with a new commanding officer.  A light aircraft carrier, the flagship of the fleet, she was the fifth ship of the Royal Navy named after the ship that led the English against the Spanish Armada.  And she was about to ‘stand to’ in defense of the flag yet again.

Events were now taking on a momentum of their own, and intelligence chatter began to burn up the airways. If the Americans wanted a pretext for a swipe at Iran, the attack on Princess Royal had given it to them. For years there had been talk of a planned attack to impede Iran’s nuclear ambitions, yet nothing ever materialized. The incident in Georgia near the end of the Bush Presidency had thrown all the careful Neocon planning off kilter. The airfields that had been prepared for possible use there had been nearly stripped bare by the Russians, and their 58th Army, officially out of South Ossetia by now, was nonetheless close at hand.

Israel’s request for a thousand more GBU-39 bunker busters had finally been approved and put on the fast track, but the Pentagon would have to move heaven and earth to get them delivered. Russia quickly countered by announcing the sale of their advanced S-300 anti-aircraft missile system, a fearsome deterrent, even for the capable air forces of Israel and the US. All along the US eastern seaboard the Navy was thrumming with activity, and this very same week the Russians decided to send the US yet another message by ordering one of their newest Delphin class nuclear ballistic missile subs out for test firing in the North Atlantic. There were too many military assets, on all sides, standing on their toes and looking for a brawl. The attack on Princess Royal had set more in motion than anyone realized at the time, even the company senior executives on board the Argos in the South Atlantic.

It was the worst possible time for military chest thumping, given the fragile state of affairs in the West. That same afternoon, while Princess Royal burned in the Straits of Hormuz, oil futures began to spike up in an unusual trading session that should have never been called by the Boyz on Wall Street. They were just trying to apply the most basic rule of plunder when it comes to financial dealings – cover your ass. But when bad news hit the trading pits, bad things could happen very quickly.
 

15

Dark Matter

Houston was dark, power down after a direct hit from the Hurricane, plunging over three million people in America’s 4th largest city into darkness. Galveston Island was inundated, with 5 feet of water filling the garages and lower floors of many neighborhoods there. There was talk that 100,000 homes could be ruined by the storm. Over a million had fled the scene in the days prior to landfall, but most of Houston hunkered down, and was now watching the first columns of national guard convoys arrive to enforce a 9pm to 6am curfew on the oil metropolis. But these were only the outward signs of the damage being done to the nation that weekend.

Helicopters were only now arriving at the hundred off shore rigs and platforms that had been in the direct path of the storm, offloading crews to assess damage at the drilling and production end of the supply chain. The refineries that ringed the city were already shut down, and with them 26% of all US oil and gasoline was effectively ‘shut in’ for the next several weeks. Like a heart that had stopped beating, the great arterial pipelines extending out from the region were also dormant, their dark energy flows idled for lack of refined product. The big Colonial pipeline serving the ten southeastern states from Louisiana to Virginia and Maryland was also offline. Gasoline, diesel and jet fuel shortages would spike up days later as the inventories in the system were quickly drawn down.  By late September there were gas lines in Atlanta, Decatur, Nashville, Murfreesboro, Franklin, with a 5 gallon limit at some stations.

The wave rippling out from the point of landfall would affect both the trucking and airline industries in a few weeks time. The threat was systemic now, unlike the virtual threat to United Airlines when a massive fifteen million share sell off was created after a reputable US news agency picked up a dated story predicting its imminent bankruptcy six years ago and published it as breaking news. Share value plummeted before the mistake was corrected, and the airline recovered, but the hair-trigger rumor mill reflex on a very jittery Wall Street was evident.

When these industries slowed, the whole distribution chain for food and retail products would slow with them, along with the incomes of truck drivers, and all the travel and tourism industry that depended on middle class America always being ‘free to move about the country.’ The real fragility of the nation’s energy system was never more apparent.

Beyond this, other dark matter was being discussed that weekend. The Treasury Secretary was huddling with bankers again, only days after another massive fund infusion supporting half the nation’s housing industry. This time it was Wall Street investment house Goldman Sachs, the maestros of the market who had heretofore navigated the roiling waters of the financial tempest with uncanny skill. They had made a killing in 2008-2009, selling investors bogusly rated AAA securities at one desk while aggressively hedging this with a raft of shorts on those same securities at another desk.  When Lehman failed and AIG was on the ropes, they were able to extract 100 cents on the dollar for their swap deals. Then they deftly morphed into a “bank” in a few days time and went merrily on with yet  more government bailout money that almost directly equaled their enormous bonus payouts that year.

But this time something had happened in the wine dark sea of derivatives, where Goldman’s exposure was astronomical. Word was that the Chinese had finally had enough of the wheeling and dealing, and the long unfulfilled promises made by American financial gurus. They were backing out of derivatives contracts, en masse, simply ordering their people to default and describing the whole scheme  in the clearest possible terms—fraud.

One by one other counterparties to the extensive web of derivatives agreements began to follow suit, emboldened by the statements emanating from Beijing. For years these trades had been accomplished in “dark pools” where pricing, transparency and reporting requirements were virtually nonexistent. As long as the right hand did not know what the left hand was doing, the Goldman magic act could continue unabated. But now someone had called them on the sham they had made of securities trading, and the game was over.

Goldman was in trouble. Puts became calls, and razor thin margins melted away. They needed cash to offset their leverage and staunch the gaping wounds in their trading schemes. The firm was teetering at the edge of the abyss and desperately seeking a financial support. And since they basically ran the U.S. government as it was, Uncle Sam was being called in once more as the patsy buyer of last resort. 

A run on other independent broker dealers like Morgan Stanley or even majors like Citigroup was now a distinct possibility as the shadow banking system, the other dark energy supply driving the nation, was also effectively ‘shut in’ with a paralysis gripping the derivatives trading desks.  The dark pools had gone cold and stagnant. The financial system had relied on these unregulated trades to keep the wheels turning. Many investment houses were leveraged at impossible ratios, some as high as 80 to 1, but Goldman’s position was far worse. As these positions became more and more untenable, the unwinding was ravaging the meager real capital base that supported the shadow trades.

So as Houston sat in the dark, the Fed once again convened emergency meetings with the heads of all major Wall Street firms trying to find a way to prevent the avalanche of default that threatened to tear the system apart. The counterparties had to be persuaded to keep their stakes in the firm at all cost, but that cost would soon be seen to be beyond the means of all of Wall Street’s most venerable names, beyond even the power of the government itself to forestall the inevitable collapse. As with the Lehman Brothers crisis, the Fed looked for a buyer or merger partner, courting overseas banks like Barklays, who shunned the offer to acquire any significant position in Goldman Sachs at 9am that Sunday. Another large potential source of support, Bank Of America, pulled out by noon. J.P. Morgan Chase would not even come to the table. Prospects for a rescue were not good, and the whole system shuddered, like financial pipelines shutting down, one after another.

The dark matter of derivatives comprising the shadow banking system amounted to over  $680 trillion dollars, a sum exceeding the gross domestic product of the entire nation for the next 60 years. The energy flows had come to a near complete halt, with nervous investors unwilling to risk capital. Banks stopped lending to other banks. Loans became almost impossible to arrange. It was a freezing deflationary scenario, potentially much worse than the Great Depression, but no one really knew what the consequences would be.

The massive derivatives market opened in a rare Sunday session to allow investors to try and limit their exposure to damage should Goldman fall into bankruptcy the following morning. Good money was scrambling after bad money, in a desperate effort to stop the losses.

The average person on the street knew little of the real danger. They had been dazzled by the summer Olympics in London, and now were distracted by the naming of an ex-beauty queen, ex VP candidate, ex Fox news analyst to the Republican field of hopefuls for the 2012 election in a pathetic effort to convince voters that a new host Republican “mavericks” were out to change Washington once and for all. They had thrown everything they could think of at Barak Obama to try and derail his chances for re-election, leaning on his middle name, Hussein, hammering at his lackluster record over the first term, where the financial mess he had inherited continued to stagnate with no real change. Was this the change you could believe in, they harped, and with good reason. People all across the nation could feel it in their bones, read it in their credit card statements, see it in the lonesome foreclosure sale signs still sprouting like weeds all through their neighborhoods.

So the new Republicans simply decided to steal Obama’s thunder. Now they were suddenly posturing as the party of change, out to shake up Washington and clean up the mess the Democrats had made of the situation. Of course, this had been the plan all along. Carl Rove returned to the political scene and once again pulled the cupie doll Sarah Palin out of his basket of tricks as he started rolling out the big lies. Meanwhile the real work that would decide the election began again in earnest, in the western most precincts of Ohio where Rove had decided he would lever the state into the Republican camp again this year. Few were watching as the vote counting systems were quietly put in place, the voter rolls quietly pruned, for Rove knew what Stalin knew at heart—it’s not who votes that counts, but who counts the votes.

Robert read the news intently that weekend, wondering if he should act immediately to protect his own meager investment portfolio. He had a substantial slice of Goldman, and sent in a sell order to an old pit buddy, hoping to get out the back door in cash just before the building collapsed.

Another huge institution caught up in the dark matter that weekend was AIG, the big American International Group had been the recipient of over $160 billion in federal aid, but the cascade of collapsing derivatives saw their insurance swaps on the block once again, and they were awash with a tsunami of new claims. They can let that one go down, he thought. He clicked on his favorites, pulling up an article by LA Times reporter Mark Fritz entitled: ‘The secret (Insurance) Agent Men.’ Apparently AIG had roots in the sludge of dark matter as far back as WWII. It had been heavily involved in covert operations by the OSS, who used insurance company records as an intelligence source during the war. He skimmed the article, drawn to a passage he had highlighted for future reference:

“The men behind the insurance unit were OSS head William ‘Wild Bill’ Donovan and California-born insurance magnate Cornelius V. Starr. Starr had started out selling insurance to Chinese in Shanghai in 1919 and, over the next 50 years, would build what is now American International Group, one of the biggest insurance companies in the world.

Starr sent insurance agents into Asia and Europe even before the bombs stopped falling and built what eventually became AIG, which today has its world headquarters in the same downtown New York building where the tiny OSS unit toiled in the deepest secrecy.”

He shook his head in disgust, but the news didn’t surprise him. He had long ago come to realize that business could be used as a geopolitical weapon. John Perkins had laid it all out in his tell all book “Confessions of an Economic Hit Man.”  Hell, the Walker-Bush family had been thick as thieves in the arms trade, with Nazi Germany as a client back in the late 30s. Bush senior had come straight from the CIA, and the family itself was deeply connected to oil, arms and intelligence. There was no way they would let AIG go down for good, he knew. Like Fannie and Freddie, some animals were simply more equal than other animals. As for Goldman, he was worried. In spite of the fact that ex-Goldman employees now ran the S.E.C. and most of the Treasury Department, the news about China defaulting on its derivatives agreements was deeply unsettling. Could the firm go the way of their old nemesis Lehman Brothers and actually collapse?

Somehow, images of those few survivors coming down the stairwells in the World Trade Center just before the first tower fell played on a haunting canvass in the back of his mind. What a metaphor, carved in reality now, he thought. But Jimmy, his contact in the trading pits this morning, wouldn’t let him down.

When the call came in from the trading desk, he answered his cell phone quickly.

“Jimmy, my main man! I hope you’ve got some good news for me.”

“Hey, Robert. Things are really dicey down here, brother. I’ve got sell orders stacked up from here to Cleveland, and no buyers in sight.”

“But you got me out, right? You sell it all?”

“That’s just it,” there was a harried edge to the other man’s voice. “I can’t move shit right now.  Fat cats are three rungs ahead of me on the trading ladder. I’ve got banks, insurance companies and fund managers hogging the wire. Every time I key something I get a bounce. These buggers have the whole system damn near locked up. And this is just a two hour special trading session. The big Boyz have the inside track. Goldman is front running like crazy.”

“What do you mean locked up? Come on Jimmy, I‘ve got too much riding on this. I need to unwind this shit right now!”

“Hey, man. I’ll do whatever I can, but this is some serious fuckin’ shit going down here this afternoon. Never seen anything like it, not even with Lehman. Gotta go, man. Somethin’s up!”

Robert heard a chorus of pit shouting just before the line went dead. He sat there staring at the screen on his Blackberry, stunned. If he couldn’t unwind this position he was definitely going to crash and burn. His option ARM on the vacation rental he bought two years ago was due to reset next week, damn near doubling in payment now to a budget choking $3,850 per month, and that was on top of the mortgage here, which was another $3000. He had secured the ARM on the second house by surrendering a lien on his primary residence, If he defaulted on either payment then both properties would be lost. The combined household income for he and his wife amounted to just a little over $8000. With $6850 being sucked away on mortgage payments, and over a $1000 per month just to make minimums on the credit cards, that left him $150 for everything else, and the payment on his SUV was $350, along with another $50 each time he tried to top off his gas tank.

There was no way he was going to put food on the table or gasoline in the car, unless he managed to liquidate this stock position and roll it into something he could spend over the next year or so.  He ran through his options…He could pull another couple thousand out of his 401K to hold things together for a while, and he still had some room on the plastic. He’d be swiping the cards at Ralph’s Market and putting all the gas on his Mobile card for the foreseeable future—that is, if the banks didn’t decapitate the credit lines. The post office always managed to get his bills late to someone once or twice a year, even if he mailed out everything five days in advance, as was his clockwork habit. His FICO score had slipped well below the 680 line months ago, and he was shocked with the realization that he was now “sub-prime.”

Sub-prime meant sub-human in this economic climate.  There was no way a bank would extend his credit lines on the cards these days. And he was no longer receiving four or five new credit card offers per week either. The last time he used one, hoping to pick up a new card and use the teaser rate interval to move some debt around, he was shocked when the application was declined. He needed the money he had sunk in the market now, and his position in Goldman, once thought completely invincible, was over 70% of everything he had there.

“Christ almighty,” he breathed, hoping the Fed would find some way to save Goldman for a few more days. “I should have dumped that shit months ago! What’s wrong with me?”

Depression chased the optimism he had started the day with. He had no idea what to do, and hung on the financial news all afternoon. Tonight he would join his wife in the Quantum Sleeper, he thought. Safer there with shit like this going on.

The following morning Goldman would die and the market would tank on the news, losing over 500 points on the DOW. An anemic rally would follow, then another massive drop across all markets. The NASDQ, S&P and Russell all losing over 4% of their net worth in a single session. The ripples were far reaching, with Russia halting trading on its markets for three days after a massive 25% sell off. All across the nation, mutual funds, bonds and a myriad of other related investments were being decimated.

Treasury Secretary Geither was as culpable as any man in the event. For years, as former head of the New York Fed, he had ignored the amazing fact that most derivatives trades were settled by hand, over the counter as it were, and not on a regulated exchange. Done on paper, the backlog of unresolved trades would stack up until many deals took months to settle instead of the mandatory three days required on a regulated exchange. It was a convenient way for banks to hide billions “off balance sheet” but it contributed greatly to the credit crisis in that they often did not know the extent of their real exposure to these shady trading firms like Goldman Sachs. Days later, ex-Goldman executive and continuing Treasury Commissar Geithner would pull a Paulson. He would shock congress and ask for yet another a revolving line of credit, at taxpayer expense, to buy the toxic sludge on the balance sheets of the failing firm.

As before, the legislation was to be rushed through, just like the Patriot Act while congress was under threat of anthrax attack. A key provision—the decisions of the Commissar in this matter were final, and not subject to review by any agency or the courts. Geithner could appoint private banks as official agents of the US government, and enter into any contract without regard to existing contract law. The “Troubled Asset Relief Program” was returning, now scaled out to the trillion dollar mark, staggering in its scope, asking both the legislative and judicial branches to relinquish oversight and stand aside. Geithner, and a group of advisors from Bernanke’s Fed, would effectively be running the country, as far as any significant decisions being made, from that point on. The consumer society, running of fast food and easy credit, had long ago died in the frost of the ongoing recession. The free market system that America was built on was now officially to be declared “dead” as well.

They had to destroy it to save it.

 

Day III Continues soon! Thanks for reading and please visit again.

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“I Am The Way
Into The City Of Woe . . .”

CHAPTER INDEX

Day Three
11~Delta Blues
12~ Contracts
13~ Maneuvers
14~ ASPRON-4
15~ Dark Matter
 

All material is:
Copyright, © John Schettler, 2010

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