Early April 1990.
Lower Manhattan.
Fierce winds whipped dense raindrops against the entrance ramp of the Down Town Association's underground garage. Turbid rainwater rushed along the concrete gutters with a dull, constant roar.
Frank, in a perfectly tailored dark pinstripe suit, had been standing by the exclusive elevator in the VIP passage for half an hour.
He held an extremely rigid Western business stance—feet together, back straight, eyes fixed on the driveway lit by dim wall lamps.
He lifted his left hand and glanced at his watch.
The second hand ticked.
With the low growl of a V8 engine, two bright headlights cut through the rain at the garage entrance. A black armored Cadillac rolled smoothly down the ramp. Its tires splashed over the speed bumps and stopped precisely at the edge of the red carpet by the VIP elevator.
At that moment, Frank's heart hammered in his chest.
This was his first time meeting the "deity" who had given him his status, wealth, and power on Wall Street in person. For two years he had only heard that crisp voice issuing orders to harvest the globe over an encrypted line across the Pacific.
The faint mechanical click of the car unlocking sounded.
Fujita Tsuyoshi stepped out of the passenger seat first. The butler, built like an iron tower, opened a massive black umbrella and moved quickly to the rear door, pulling the heavy armored door open.
Frank stepped forward. His breath caught for half a second.
A foot in a custom black flat leather shoe stepped out. Saionji Satsuki entered the dim garage light.
Today she wore a sharply tailored deep black Savile Row women's suit with a pure white silk shirt underneath. No jewelry. Her long hair was pinned back with a dark blue tortoiseshell hairpin.
Seeing the impossibly young, unfathomable Oriental girl, Frank's mind went blank.
Wall Street discipline kicked in. He suppressed the fanatical urge to kneel on the spot. He straightened his back, stepped forward to shield the top of the car door from rain, and pressed the elevator's up button.
Out of reverence, Frank didn't dare hold eye contact. He lowered his head slightly, his gaze fixed on the tips of her black custom leather shoes and the edge of the red carpet.
"Miss Saionji. Welcome to New York."
Frank kept his voice steady.
"Our team has fully secured the club's perimeter. President Gutfreund of Salomon Brothers is waiting in the top-floor private suite."
Satsuki nodded slightly. Her gaze swept calmly over this CEO who managed tens of billions for her on Wall Street, lingering half a second on his tense jawline.
"You've done excellent work in New York these past few years, Frank."
The crisp voice echoed in the underground garage.
Frank's hands clenched at his sides almost imperceptibly. His nails dug into his palms. He used the sting to calm the fanaticism surging in his chest.
"It is my honor to serve you."
The elevator's metal doors slid open smoothly. Frank stepped aside, respectfully guiding Satsuki and Fujita Tsuyoshi inside.
The doors closed. The elevator ascended with a slight press of g-force under their feet.
The car was extremely quiet. Frank stared at the flickering red floor numbers, his brain running simulations of the confrontation about to happen with the Wall Street oligarch.
Ding.
They reached the top floor.
The doors opened to a dim corridor lined with handmade Persian wool carpet. Nineteenth-century European landscape oils hung on both walls, the gold leaf on the frames gleaming under the wall lamps.
Frank led the way. He stopped at a heavy walnut double door at the end of the corridor.
Two club waiters in black tailcoats stepped forward, gripped the brass handles, and silently pushed the doors open.
Inside the private suite.
The space was vast. No ostentatious crystal chandeliers. Light came from a massive stone fireplace in the corner and several floor lamps with soft lighting.
John Gutfreund, CEO of Salomon Brothers, sat on a dark brown Chesterfield leather sofa.
This oligarch, dubbed the "King of Wall Street" by BusinessWeek, wore an exquisite dark gray three-piece suit and held a glass of single malt whiskey with an ice sphere.
Hearing the door, Gutfreund set down his crystal glass immediately.
He stood and strode toward the door.
"Miss Saionji. It is an honor to have dinner with you."
Gutfreund stopped two steps away from Satsuki and extended his right hand.
Facing an Oriental girl young enough to be his granddaughter, Gutfreund's posture was almost excessively polite. But on Wall Street, age and gender didn't matter. Only capital and tactics did, and Satsuki had the strength to command his highest respect.
Satsuki smiled and extended her right hand, clad in a thin black leather glove.
"Mr. Gutfreund. I've heard much about you." Satsuki's tone was gentle, with the elegance of an old kazoku lady. "I am also deeply honored to receive your invitation."
Their hands met in mid-air. The pressure was moderate, the contact brief.
"Please, have a seat."
Gutfreund gestured.
Satsuki took the armchair opposite. Fujita Tsuyoshi, briefcase in hand, stood quietly in the shadows behind her. Frank sat on another sofa next to Satsuki, back straight, ready to respond to any data questions.
Gutfreund sat back down. He didn't call a waiter. He personally took ice from a sterling silver bucket on the coffee table and dropped it into a clean Baccarat crystal glass.
"Miss Saionji, you've just gotten off a plane. How about some plain water?"
"Thank you."
Gutfreund poured a glass of pure water and slid it gently toward Satsuki. Then he picked up his own whiskey.
"Thirty-five billion dollars in book profit."
Gutfreund went straight to the point. He leaned against the back of the Chesterfield, swirling the crystal glass in his hand. The ice sphere clinked dully against the glass.
"To be honest, Miss Saionji. When Williams first put the clearing center's anomaly report on my desk, I thought some old friend in Europe was playing tricks."
He shook his head and gave a self-deprecating chuckle.
"Hmm... using hundreds or thousands of offshore accounts to shred millions of long-term put options into tiny pieces. Right under our noses, you quietly moved a mountain of gold."
"That order-splitting program you call 'Ghost' gave us quite a headache. But it really is a charming work of art, isn't it? Especially the timing of the entry... perfect, squeezed right into that policy gap from the Bank of Japan's rate hike."
He paused and raised his single malt, giving Satsuki a slight nod.
"Beautifully done. Clean, crisp concealment. Those arrogant boys in the Salomon trading room admire you to no end."
It was all laid bare. Every cover the Saionji Family had set up was transparent before Wall Street.
But no one present was surprised.
There are no perfect concealments in this world. If the other side is fooled long enough, the method worked.
And being discovered was part of the plan. As mentioned before, the Saionji Family's overseas funds were meant to return to Japan as foreign investment.
"You flatter me, Mr. Gutfreund. It was merely some shallow calculation models."
Satsuki picked up the crystal glass and took a small sip of ice water.
"I've always believed every market fluctuation paves the way for its ultimate return to value. We merely conformed to that inevitable trend."
Gutfreund looked at the girl who kept a gentle smile throughout. A sharp glint flashed in his eyes.
He set down his glass. From his suit's inner pocket he pulled a document and a copy of a freeze fax from the North American Clearing House.
He laid both flat on the marble coffee table.
"The trend is indeed as you say. But in this market, moving this much capital through the clearing center's underlying routing is simply too conspicuous."
Gutfreund's speech slowed. He tossed out his real bargaining chip for the night.
"Miss Satsuki, you should be aware. In the international financial system, any cross-border cash settlement over one billion dollars triggers anti-money laundering alerts from the SWIFT system and the U.S. Securities and Exchange Commission. Once federal agencies intervene and that long compliance review begins, realizing this thirty-five billion will be indefinitely delayed."
He extended his index finger and tapped the cover of the "Exclusive Prime Broker and OTC Derivatives Clearing Agreement" on top.
"As one of the world's largest market makers, Salomon Brothers is willing to provide you with this key to compliance."
"If these thirty-five billion in option contracts are all transferred to Salomon Brothers' proprietary trading desk for internal hedging and settlement, this massive amount of capital will look to regulators like normal, legitimate institutional transaction flow."
Gutfreund leaned slightly forward, elbows on his knees.
"We will bear all administrative risk and compliance pressure for you. We will ensure every cent is safely and legally settled and wired to any offshore account you designate."
"As consideration for providing this exclusive clearing service and channel cover."
Gutfreund looked directly at Satsuki.
"Salomon Brothers requires a twenty percent cut of the total profit from these options as a channel commission."
Across the coffee table, Frank's jaw tightened instantly.
Twenty percent. A full seven billion dollars.
This was daylight robbery. Frank's brain scrambled for legal countermeasures, but like when Williams visited days ago, the compliance blockade they played was impeccable under existing federal law.
If she rejected this agreement, SEC investigators would be here tomorrow with the clearing center's alarm records and freeze those Cayman Islands accounts completely.
The private room went briefly silent. Only the firewood in the fireplace crackled.
Gutfreund waited quietly for her counter-offer. Faced with a seven-billion-dollar cut, any capitalist would slam the table, or at least dig in for several rounds of cold, grinding negotiation.
But Satsuki, sitting across from him, showed no indignation at being extorted. She didn't even frown.
On the contrary, the corners of her mouth lifted. Her cheeks bloomed with an extremely gentle, almost relieved and grateful smile.
Satsuki picked up the glass of pure water in front of her and raised it slightly in a toast to the old man.
"To receive such professional compliance protection from Salomon Brothers, this commission is a very fair price."
In the softest tone, Satsuki accepted the astronomical bill.
"Mr. Gutfreund, the Saionji Family is very happy to pay this fee."
Gutfreund's fingers holding the whiskey paused slightly.
He looked at the smiling young girl across from him. Undisguised astonishment crossed his eyes.
She agreed too quickly. Giving up seven billion in profit sounded, from her, like leaving an insignificant restaurant tip.
Could there be a trap?
This decisive act of cutting flesh made the King of Wall Street frown slightly. In capital, no resistance often means a bigger scheme. He realized she didn't care about this bridge fee at all.
What she was after was far bigger than thirty-five billion.
Then why signal that to him? Revealing her true purpose shouldn't help her...
Could it be?
"Miss Satsuki's generosity is admirable." Gutfreund set down his glass and sat up slightly. "It seems the Saionji Family's game in the Far East is even grander than I imagined."
Satsuki set down her water glass.
With the gentle demeanor of a junior discussing business with an elder, she laid out her real trump card for the night.
"Mr. Gutfreund. Has Salomon Brothers' actuarial team recently re-evaluated the capital adequacy ratios of Japan's major commercial banks?"
Gutfreund's eyes narrowed slightly.
"Japan's banking system has always been quite massive." He responded cautiously. "Their book assets are sufficient to handle routine bad debt fluctuations."
"Indeed massive."
Satsuki's fingers tapped lightly on the leather armrest twice.
"But Japanese banks have always counted unrealized gains from cross-shareholdings between enterprises as the eight percent core capital required by the Basel Accord."
Satsuki looked at the oligarch across from her. The smile at her mouth deepened.
"Now the Nikkei has fallen below thirty thousand. This portion of unrealized gains is vanishing into thin air."
Gutfreund's pupils contracted almost imperceptibly for a split second.
"The 'total volume regulation' the Ministry of Finance issued a few days ago has completely cut off new credit flowing into real estate." Satsuki's voice stayed soft, like telling a bedtime story. "The banks' capital adequacy ratios are about to fall below the international red line. To protect themselves and comply with international clearing standards, their only solution is to frantically, indiscriminately call in loans from underlying enterprises, healthy or not."
"Once a wave of loan withdrawals forms."
"Trillions of dollars in non-performing loans and mountains of bankrupt businesses will appear on the streets of Tokyo."
The private room was dead silent.
Gutfreund sat upright in the leather sofa. In seconds, using the data points Satsuki gave him, his brain ran a brutal financial deduction.
Stock market crashes lead to shrinking bank capital. To replenish capital, banks must call in loans by any means. Then real-economy enterprises collapse en masse the moment their capital chains break.
A perfect, irredeemable death spiral.
"This is just a theoretical model, Miss Satsuki."
Gutfreund didn't show he was convinced yet.
"The Ministry of Finance still has extremely strong administrative intervention capability. They might relax standards to prevent large-scale hemorrhaging."
"You may certainly remain skeptical, Mr. Gutfreund."
Satsuki smiled, eyes calm.
"You can have your risk control department run a stress test on the Bank of Japan system tomorrow morning. See how long that country's bottom-level defenses can hold under the dual strangulation of falling stocks and loan withdrawals."
She glanced toward the clearing agreement on the marble coffee table with the twenty percent cut.
"I'm paying this seven billion dollars tonight not merely to exchange for an offshore transfer of funds."
Satsuki looked at Gutfreund. A light flickered in her eyes that was extremely dangerous yet irresistibly charming.
"This money is a deposit paid in advance by the Saionji Family."
"The Japanese zaibatsu's cross-shareholding model and the Ministry of Finance's exclusionary reviews are an iron curtain that foreign capital can't break through. But the Saionji Family has the SPV matrix and local political cover to pierce that iron curtain. What we lack is a compliance fortress that can withstand administrative intervention from Washington, and a reliable capital dispatch channel."
"If my deduction becomes reality in the next few months."
Satsuki slightly raised the water in front of her.
"I hope Salomon Brothers can use your lobbying machine and clearing channels on Wall Street to become the Saionji Family's exclusive ally in this feast of carving up the world's second-largest economy."
Gutfreund stared at the young girl before him.
She didn't need him to believe her immediately. She used seven billion in cash as a chip to forcibly buy a seat at the table with Salomon Brothers to gamble on the future.
Faced with this open and lethal strategy, and the terrifying prospect of profits large enough to buy half of Japan, this King of Wall Street dropped the last of his reservations.
Gutfreund reached out and picked up his glass of amber whiskey.
He raised it slightly and very solemnly toward Satsuki.
"I look forward to my actuaries bringing me an interesting test report tomorrow."
Satsuki picked up the glass of pure water and gently touched it against the whiskey glass in mid-air.
Clink.
The glass made an extremely crisp sound.
Outside the window, Manhattan's spring thunder rolled over the Hudson River.
Lightning tore through the pitch-black rain curtain of New York.