Terror on Wall Street, a Financial Metafiction Novel (6 page)

CHAPTER THIRTEEN

ON THE RUN

It was slow going on the I80 as hundreds of cars jammed together to make the exodus from Chicago. Ike looked in the rearview mirror at the city, which was hard to see through all the smoke from the fires.

     “It used to remind me of the Emerald City in the Wizard of Oz.  You’d drive through miles and miles of cornfields and all of a sudden, there it would be, rising the in distance and shining just like a jewel.  Now I can hardly see it.”

     “Yes.  This must have been how they felt in 1871 during the Great Chicago Fire.”

     Ike looked at Snookie.  It was strange that she had said that in a tone so devoid of emotion.  He shook it off.

   
“
Where did you learn to fight like that?”

     “I was an MMA addict in high school.  Hung out in the gym whenever I wasn’t studying.  They teach you how to disarm an attacker.  Never thought I’d have to use it.”

     “I never thought anything like this would ever happen.” 

     “Me either, but if the pattern is correct, we should be thinking about where to get food and gas, and try to get as much of it as we can before our money becomes worthless.  You stay here.  I’m going to go find out what I can.”

     Ike left the car among the others in the traffic jam and approached a group of men who had gathered outside their vehicles.  Some of them were nervously smoking.    

     “Hey, guys, do you know where we can get something to eat and somewhere to gas up?”

     One of the men flicked his cigarette butt and said, “You can forget about gassing up, at least around here.  I’ve tried.  But there’s a guy down the road there selling stuff.  You may want to check it out.”

     “Much obliged.”

     Ike went back to tell Snookie that he was scouting for food, and she replaced him in the driver’s seat in case traffic started to move again. 

     “Be careful, Ike.”

     Ike struck a Ninja pose, winked, and then was off.

     Snookie tried her phone again.  No signal.  She fired up the car radio.  There was nothing on the FM channels except static.  The AM channels showed more promise as she surfed through them.

     “The President has declared the existence of an unusual and extraordinary threat to the national security and economy of the United States, and has invoked the powers of the International Emergency Economic Powers Act, blocking assets of groups the FBI suspects were involved in the hacking of critical transportation, energy, and food distribution systems.”

     “Congress, in a special session, has authorized the United States military reserves to be activated to help local authorities respond to the rioting that has overcome every major U.S. city.  Local authorities are warning everyone to stay inside.  Rolling blackouts have been reported in major metropolitan areas throughout the country.”

     Ike approached a huge crowd that had formed around what looked like a truck with a mobile farm stand that had parked on the shoulder of the road.

    
This must be it.  What’s so special about a farm stand?

    
The people in the crowd were pushing, each one trying to get to the front of the line first.  Ike stood up on tiptoes to look over them. 
It’s just a guy selling fruit and vegetables. 
He shouted out to him.

    
“You got any water?  Anything to drink?”

     “Yeah, I’ve got some well water here.  A hundred bucks for a five gallon drum.”

     The crowd reacted with a collective groan.

     “A hundred bucks!”

     “Take it or leave it.”

     “I’ll take one,” Ike piped up, holding out a one hundred dollar bill and barging through the line.

     “Please let the customer through, folks.”  The man took the bill and gave Ike the water drum.

     “Anything else, young man?”

     “Yes.”

     Ike picked out as much fruit and vegetables as he could hold, along with the water.  The man weighed and tallied them on his calculator.

     “That’ll be five hundred, including the water.”

     Ike handed over another four hundred dollar bills.  Once the ice was broken, more people in the crowd started asking for water and waving hundred dollar bills.

    
Neuroeconomics in action.

CHAPTER FOURTEEN

IKE AND NOAH

In his lab, Ike looked more like a zookeeper than an economist.  There were cages of rats and rabbits, birds, and two monkeys; one of which Ike had let loose and which sat next to him in the lab.

     “We have at least two of everyone, Chester.  I feel just like Noah with his ark.”  Ike laughed.

     Chester jumped up and down, reacting to Ike’s laughter, which made Ike laugh even harder.

     “Chester, we’re having visitors today, so be on your best behavior, okay?”  Ike nodded to Chester and he nodded back.

     When Carlos walked in and saw Chester, he took a step back, his arms outstretched.  Chester jumped up and down and squealed.

     “Whoa!”

     “Don’t worry, Carlos.  He’s friendly.  Smart too.  Sit down, I’ll show you.”

     “Next to him?”

     Carlos motioned with his thumb and made a face.

     “Yeah.  Right on the couch.”

     Carlos tentatively sat down on left side of the couch, trying to sit as far away from Chester as possible.

     “Don’t be scared, Carlos.  He won’t hurt you.”

     “Dude, I’m
not
scared.”

     “Chester, this is Carlos.  He’s happy to meet you.”

     Chester stuck out his hand.

     “Well?”

     “Well, what?”

     “Aren’t you going to shake his hand?”

     Carlos put out his hand and Chester took it with both of his and shook it up and down, making Carlos smile.

     “That’s cool.”

     “Who else is coming?”

     “Bob and Larry, I think.”

     “What about Snookie?”

     “She says she doesn’t understand what animals have to do with economics.”

     “Right.  Maybe if she showed up, she would understand.  Would you like some tea while you wait?”

     “Sure, thanks.”

     “Thank Chester.  Chester, would you please get Carlos a can of tea?”

     Chester jumped off the couch, went to the small refrigerator, opened it, and took out a can of tea.  He hopped over back to Carlos and presented it to him.

     “Thanks, Chester.”

     Ike gave Chester a treat for a reward.  “Very well done, Chester.”

     There was a knock on the door.

     “Come in.”

     Bob and Larry entered the lab. Both pointed at the monkey, who pointed back at them, comically.

     “Hey guys, meet Chester.  Chester, this is Bob, and this is Larry.”

     Chester shook Larry’s hand, then Bob’s hand, and Ike gave him a treat.

     “Thanks for coming to the lab, guys.  Here we study which areas of the brain are responsible for which types of decision processes.”

     “So you’re really a scientist as well as an economist, right?”

     “I guess so, yeah.  You can’t really study an investor’s decision-making process without considering the brain.  Chester here is going to show us an experiment with his partner, the lovely Lolita.  Chester, bring Lolita out, would you please?”

     Chester opened the door of Lolita’s cage and she came out and stood before them.  Unlike Chester, who was in his birthday suit, she was dressed for the students’ visit in a red skirt with white polka dots.

     Ike fitted Chester and Lolita with a special electrode-equipped helmet, hooked them up to the instrument panel, and gave them each a reward.

     “Neuroeconomics studies the parts of the brain that help us to make decisions.  To study risk, we’re going to examine the firing rates of the neurons in the orbitofrontal cortex of these monkeys.  This was an experiment originated by Padoa-Schioppa & Assad in 2006.

     “Frank Knight, an economist, defined risk in the 1920s as 'a quantity with known outcome values and known outcome probabilities', and ambiguity as 'a quantity with known outcomes and unknown probabilities.'  He said that risk was a measurable quantity of uncertainty that is distinct from ambiguity, which is an unmeasurable uncertainty.

     “We’ve inserted electrodes in both Chester and Lolita’s orbitofrontal cortex, which is the part of the brain associated with decision making.  That’s this part of the brain.”  Ike pointed to a diagram of the brain on the wall, where a highlighted portion of the frontal lobe was located just behind the eyes.

     Ike positioned Chester and Lolita on a chair in front of two separate computer screens.

     “Watch the monkeys make their choices by pointing to choices on what risks to take.  The higher the risk, the more juice they get.”

     “How do they make their choices?”

     “There are two kinds of juice.  Each juice is represented by the colored squares that appear on the monitor.  The more colored squares, the greater amount of juice they get.  They make their choices with eye movements, and the computer disperses the juice they choose through these tubes.”

     “Then why don’t they just pick the highest number of squares each time?”

     “Because sometimes, when they do, the computer doesn’t deliver any juice.  Picking the lower amount gets them juice every time, but in a smaller amount.”

     They watched as Ike and the monkeys performed the experiment.

     “See, they’re taking a risk on whether or not the juice will be delivered.”

     “They’re choosing to get the most juice, whether the risk is higher or not.”

     “That’s right, Carlos.”

     “They’re greedy.”

     “No, Bob, they’re taking a risk to get the highest return.”

     Ike showed them a graph printout from the experiment. 

     “This is a printout of a longer experimental period.  They have consistently taken a greater risk to receive a bigger reward.”

     Bob stared at the graphs.  “Fascinating.”

     “With humans, our studies show that we would rather not lose a certain amount of money more than we relish earning the same amount of money.  We also learn that, over time, our decision making changes.  People who choose one candy bar today over two tomorrow are making an impulsive choice.  But give them the same decision over 1 candy bar in 100 days or 2 candy bars in 101 days, and they opt for two.”

     “Interesting.  So, all this monkey business explains how brokers cheat their clients by offering them investments with higher returns and greater risks.”

     “Watch it, Larry, we don’t all cheat clients,” said Bob. 

CHAPTER FIFTEEN

THE LONG AND WINDING ROAD

Ike got back to the car just as things started moving on the interstate. Snookie popped the trunk and Ike threw the water in the back and jumped into the passenger’s seat with the bags of fruit just as the motorists behind him started to honk their horns in protest.       

     “I was getting worried.”

     “Thanks, Snook.  It’s good to know that someone cares.”

     “It’s very scary.  The phones still don’t work, so I can’t call my parents.  The radio works, but it’s all bad news – they’re talking about the military being authorized to help quell social disturbances in all major cities.”

     “Sounds like martial law.”

     “Isn’t that unconstitutional?”

     “Yup.  It’s a complete suspension of the Constitution.  But there is precedent for it.  Lincoln was the first president to use it during the Civil War.  You heard anything about the bank runs?”

     “They’re being silent on that.”

     “That’s no surprise.  I heard some of the people out there saying that they went to their banks to get out their money and the banks refused to give it to them.”

     “That’s because it’s not their money.”

     “You sound just like Harry.”

     “Once you deposit that money into your checking account, it becomes the bank’s money and you’re just another one of their creditors.  That’s why they have been going digital with money. Credit cards, debit cards, wiring money – it’s all digital.  There is no cash to cover all those transactions.”

     “And that’s why Harry told us to have at least a six-month supply of cash on hand.”

     “And to use about 10% of your investing money to buy gold.”

     “I’m beginning to see that his course was really worth the tuition.”

     “Where should I go, Ike?”

     “Just keep going, as long as traffic is flowing.  When we reach the countryside, we can get off and look for gas.”

     “It’s only a twelve hour drive.”

     “It could be longer than that.  And once we run out of gas, it’s game over.”

     Snookie and Ike crawled along the interstate, watching plumes of smoke in the distance as Chicago burned.

***

Carlos’s plane finally took off, and Harry looked down at the burning city with sadness.  He squeezed Jennifer’s hand.

     “Look at that.  I always loved that place.  I thought it would have been climate change that killed it, not citizens burning their own city down.”

     “Climate change?”

     “Yeah.  They didn’t have a plan for that any more than they did for the economy.  Just a lot of talk.”

     “And the economy did us in first.”

     “Let’s not give up hope, Mr. Rodriguez.”