So when Jerry Brighton started complaining that Matsuo
Noda's action was growing too rich for his blood, I knew we were in the big time. It took a lot to impress a pro like him.
The thing was getting scary, but it was still perfectly legal. Let me summarize roughly what had happened over the three weeks since I had decided to play along with Matsuo Noda. First were the physical arrangements. To accommodate my new calling, I'd enlarged my operating space--the back room of the brownstone's parlor floor, looking out over the garden-- into a makeshift brokerage office complete with a multi- lined telephone and quote services from S-tron and Telerate. I'd also installed a direct tie-line to the T-bill pit of the Chicago Mercantile Exchange, ditto the Note and Bond action at the Chicago Board of Trade. And because of all the computer hardware, I had to move Emma's desk out into the parlor. Consequently she could no longer listen in on my calls, which she did not take kindly. However, I was no longer forced to listen in on hers. I figure that sort of made us even.
In addition, I'd set up accounts at every futures brokerage house in the land, both coasts, to spread out the orders. We were moving a lot of contracts, and the big-time outfits like Salomon Brothers were scrambling to make a market for us. Once again, therefore, nagging questions began to arise. Anybody who'd thought about it for more than a minute would have realized you can't make a play like Noda's without being noticed. There's no bigger rumor mill than the financial arena. The very idea of shorting the bond market to the tune of billions and remaining obscure and anonymous for any length of time was absurd. After all, there're two sides to every bet. But since I was supposed to be fronting his move specifically to throw sand in everybody's eyes, all this attention presented something of a quandary. Although we were trying to keep the lid on, buying small batches of Treasuries even as we were shorting them, the price was softening and margin calls were starting to loom on the horizon. None of this made any sense. Noda wasn't hedging or even speculating in the normal sense; he was playing a giant game of cat and mouse with the markets. This told me once again he wasn't showing all the cards in his hand. He had something major, and unexpected, in the pipeline.
Which brought forth the next insight: Matsuo Noda didn't hire me merely because he wanted some innocent-seeming outsider to do his bidding in the futures market; any number of players in this town could have handled that action as well or better. No, he'd sucked me into his operation for some entirely different purpose, at the moment known only to him.
But what? More to the point, why?
Welcome to Friday, and my rather disturbed life. Want to know what really disturbed me the most? Seeing my new employer on CNN's Prime News, standing there right next to the Emperor of Japan. Seemed as though I wasn't the only one now under Noda's spell. All of a sudden my mild-mannered client had become a world-class Japanese mover and shaker. And that made me very nervous.
Needing a little perspective, I decided to invite down Dr. William J. Henderson, respected thinker and booze hound. As it happened, he had a little time to kill that Friday before his "late date" with some advertising exec who was flying in from an assignment on the coast. Since three weeks had gone by since our talk up at Martell's, it seemed like a good occasion to get together and compare notes.
True to his word, he had formally resigned from the President's Council of Economic Advisers, though he'd reluctantly agreed to serve as a forecasting consultant for Wharton Econometrics. He'd also caused some unsettling rumors in the world markets by putting on some very heavy "straddles" in December gold futures and oil. He called it insurance, predicting he'd be covered no matter what happened. Looked at another way, though, Bill Henderson was quietly shifting out of paper money and into commodities. And when Henderson started hedging, you knew the weather forecast was unsettled to stormy.
It turned out he'd also uncovered a few stray elements of what might well be a much bigger game. Nothing solid at that point, but enough to stir him up.
"Know who runs that outfit you've taken on as a client?" He leaned back in one of the leather chairs in the upstairs parlor, new pair of Gucci's glistening, and sampled his third drink. "Guy by the name of Matsuo Noda."
"Henderson, who do you think I was talking to up at Sotheby's the other night?"
"You check your wallet afterward? We're talking heavy guns, my friend." He snubbed out what must have been his tenth Dunhill in the last hour. "You didn't tell me he was the honcho behind all this."
"You didn't ask. Know anything about him?"
"Not till last week. I started to do a little checking and first thing I know I'm stumbling across his name everywhere I look." He studied the glass in his hand. "Tell you something about this Noda. The man drops a quarter, you let him pick it up himself. He'll nail you where the sun don't shine. Definitely a bad news mother."
"You mean that business with the sword?"
"Nah, what in hell do I know about swords? That's your toy box. I'm talking about the real world, friend. Turns out Matsuo Noda was the prime mover in one of the biggest takeover plays of the century."
"What takeover? They don't screw around with corporate takeovers in Japan."
"They don't take each other over. They take other businesses over. Washington may think that war back in the forties is over, but somebody neglected to pass the word to MITI. Seems they've got the idea it was just the opening skirmish--the only folks who surrendered were the army and navy." Henderson grew ominously serious for a change. "Question is, where's this thing headed? Is the idea of turning our industrial base into a packaging operation for imports some kind of conspiracy, or is it just nature takin' its course?"
Conspiracy? That wasn't a word Henderson threw around lightly. In fact, he tended to scoff at conspiracy theories, claiming they were a substitute for hardheaded analysis. I agreed. So what was he driving at? I pressed him.
He paused to light a cigarette. "I bring up this unsavory possibility because I'm beginning to detect a little operation code-named 'eat an industry.'"
"Henderson, that's my game. I pitch in to help the little fish fend off the big ones."
"No offense, friend, but you probably couldn't even get into the ball park where Noda and his boys are playing. We're talking the very big leagues here."
"Now hold on a second. Noda's not interested in companies. He's just shooting a little craps. From what I've seen so far, the guy seems to be completely on the up-and-up. In fact, looked at from the long view, you might even say he's putting money into this country, never mind it's just the Wall Street casino."
"Sure he is. It's like he first kicks the shit out of you, then hands you a Coke so's you'll feel refreshed."
"What in hell are you talking about?"
"Well, let's back up a notch. Since I don't want to bad-mouth your new client, why don't you let me give you what I'll call a purely hypothetical case." He sipped at his Scotch. "Let's suppose you were a Japanese guy, like Matsuo Noda for instance, and you wanted to take over some strategic American industry and ship it to Japan. How'd you go about it?"
"Well . . ."
"Have a drink, counselor." He plunged forward. "And let me tell you a little fairy tale. About how Matsuo Noda ate the American semiconductor industry."
"Noda?"
"It was MITI actually. But Noda was running the Ministry when they did it, and he was the guy who set up the play."
"Noda ran MITI?" This was news to me.
"Yep. Vice minister. Then he went on to greener pastures, being the Japan Development Bank, and left the details to another MITI honcho by the name of Kenji Asano. According to my sources, though, it was Noda who handled the tricky part, the money, after he went over to the bank. Got it together, laundered it, and dispensed it."
"Laundered it?"
"Can't think of a better word. MITI carefully made sure the kickoff funding from the Japan Development Bank got passed through a shell organization called the Japan Electronic Computer Company, hoping nobody would trace it back to the government."
"I think you're starting to see things, but I'd like to hear this little fantasy."
"Okay, off we go to the land of make-believe. Once upon a time not too long ago and not too far away, a few guys at Intel or Bell Labs or some damn place got the mind-boggling idea you could shrink down a computer's memory and put it onto a little sliver of silicon no bigger'n a horsefly's ass. Various outfits tinkered around with the concept and eventually it got commercialized. Lo and behold, Silicon Valley was born, where they start turning 'em out by the bucketful. By '78 we're talking a five-billion-dollar industry. Kids barely old enough to drink legal got so rich they just gave up counting the money."