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THE SAMURAI STRATEGY
”A financial thriller right out of the headlines.” Adam Smith

A high-finance, high-tech thriller that correctly predicted the 1987 stock
market crash. It was the first fictional treatment of a major international
concern of the Eighties. Set in locales as diverse as Wall Street and the
offices of Japan's powerful Trade Ministry, THE SAMURAI STRATEGY

describes a scenario of murder, worldwide currency manipulation, a revival
of Japan's smoldering nationalism, and is set against a background of a new
high-tech computer milieu. Matthew Walton, a freelance corporate
'takeover' lawyer is hired by a mysterious Japanese industrialist to purchase
a New York office building and begin a massive 'hedging' in the financial
markets. Two weeks later, off an island in the Inland Sea, divers working
for the industrialist's organization, recover the original Imperial Sword,
given to Japan's first Emperor by the Sun Goddess, Japan's 'Excalibur', and
lost in a sea battle in 1185. He forms an '800-Year Fund' and billions of yen
flow to his fingertips. He then dumps all the Treasuries Japan had acquired
and devastates the American economy.

As the story rushes to its stunning conclusion, Matt Walton goes to Japan
and determines that the 'Imperial Sword' is, in fact an unusual antique he
once owned himself.

BOOKS BY THOMAS HOOVER
Nonfiction
Zen Culture
The Zen Experience
Fiction
The Moghul
Caribbee
Wall Street Samurai (The Samurai Strategy)
Project Daedalus
Project Cyclops
Life Blood
Syndrome

All free as e-books at
www.thomashoover.info

Wall Street Samurai

(The Samurai Strategy)

Thomas Hoover
www.thomashoover.info

THE SAMURAI STRATEGY A Bantam Falcon Book / June 1988
All rights reserved. Copyright © 1988 by Thomas Hoover.
Bantam Books are published by Bantam Books, a division of Bantam
Doubleday Dell Publishing Group, Inc.

OPM 0 9 8 7 6 5 4

Key Words:
Author: Thomas Hoover
Title: The Samurai Strategy
Wall Street, Japanese Stock Market, Treasury bonds, Stock
Market, Imperial Sword, Emperor of Japan, Japanese History,
Supercomputer

The following story is entirely imaginary . . . I hope.

CHAPTER ONE

New York, New York. Friday, early September, dusk. Heading uptown
on Madison. Sheets of icy rain washed the pavement, heralding the
onslaught of autumn and the miserable winter to come. The city was poised
for its cruelest months, that twilight of the spirit when strangers arm-wrestle
for taxis, nobody has time to hold a door, and you cherish every fleeting
human kindness.
Bring on the blizzards, the holiday madness. This winter I was planning
something long overdue. To treat my daughter Amy, the Madame Curie of
her ninth grade, to a real vacation. Just us. We'd leave at Thanksgiving and
stay gone through the Christmas break. She got to live with me three
months a year, and December was by God going to be one of the months.
School? She'd already skipped a year; maybe she was a little too fast-track
for thirteen.
Since Joanna, my ex, had already lined up her own holiday excursion
(Amy the spy claimed it was with some divorced Tishman VP), she hadn't
bothered inventing the usual roadblocks. Clear sailing. We'd open the house
down in St. Croix and spend a month getting reacquainted. Work on the tan
and some postgraduate snorkeling, a strategic move while I still enjoyed a
small sliver of her attention, before a certain "totally terrific" skateboard
virtuoso finally got around to noticing her. Only a couple of jobs needed
finishing, but they'd be wrapped up with weeks to spare.
That night, in truth, had its moments of nostalgia. The destination was
Sotheby's auction house, a place where Matthew Walton was greeted by
name at the cashier's window. Home away from home for obsessive
collectors. I leaned back

against the vinyl seat of the Checker, letting the rhythm of the streetlight
halos glimmer past, and reflected on all those happy nights I'd made the trek
with Joanna. She'd had no real interest in my collecting hobby, Japanese
samurai swords and armor, but she was always a decent sport about it.
Besides, she had her own passions. While I was agonizing over long blades
and short blades, she'd sneak off and browse for something French and
nineteenth century and expensive. Fact is, I'd usually plan ahead and have
something of my own on the block just to pay for that little sketch, or print,
she suddenly had to have. Out of habit I'd even shipped up a couple of
mistakes for the auction this evening (a hand axe and a lacquered-metal
face guard).
Though tonight's sale had only a few odd items in my specialty, the slim
offerings actually suited the occasion. It left the evening open, time for the
real agenda—getting things rolling with a new client who'd inexplicably
handed me a job as simple as it was strange.
The man, name of Matsuo Noda, had rung all the way from Japan Friday
before last, introduced himself in generalities, then declared he had a
pressing legal matter requiring both speed and confidentiality. Inquiries had
led him to me. Would I have time to help him locate an office building to
buy? He claimed he was head of a Kyoto consulting outfit that called itself
Nippon, Inc., and he was looking for something in midtown, seventy-
million range.
Honestly I couldn't quite believe he was serious at first. Why this job
(just a little legwork, really) for somebody he'd never even met? I could
swing it, sure, but now that Japanese investors were snapping up U.S.
property right and left, who needed some ex-Texan turned New York lawyer
knocking around? There was no rational reason to engage a corporate
attorney.
"Out of curiosity, why aren't you working through one of the Tokyo
firms here in New York, say, Hiro Real Estate or KG Land? Surely they
could—"

"Mr. Walton," he interrupted smoothly but firmly, "allow me to say I
have my reasons. May I remind you I stressed confidentiality."
"Merely asking." I took a deep breath. The connection was distorted, a
high-pitched hum in the background, as though he wasn't using commercial
phone lines. "If you want, I can look around and see what's on the market . .
. and in the meantime how about sending along a prospectus, just for the
file?"
"Assuredly," he said, "and I do look forward to working with you." After
a few more polite nothings, he abruptly closed out the call.
Peculiar. That wasn't how the Japanese road show usually did business.
From what I'd seen, Tokyo invests very cautiously and deliberately,
sometimes "researching" a deal half to death. I momentarily wondered if it
wasn't just one of the jokers from my old partnership pulling my leg.
He was real enough. A brochure arrived by overnight air, bound in
leather, with a flowery covering letter. Two problems: most of the thing was
in his native tongue, and what I could read didn't tip his hand. From the
looks of its public disclosures, Nippon, Inc. was merely some kind of
money manager for Japanese investment banks; it had almost no assets of
its own. All I could find listed were a few million dollars, lunch money for a
Japanese outfit, mostly cash parked in some short-term Euroyen paper.
That, and a head office in Kyoto, was the sum of it. What's more, Noda only
worked with Japanese banks and firms. No foreign clients.
So why did this man suddenly require space in New York? An entire
building. I honestly couldn't figure it. On the other hand, with any luck the
whole deal probably could be put together with a few phone calls.
By way of introduction, let me say that I worked, technically, as a
straightforward attorney-at-law. I say "technically" because I was, in fact, a
freelance defensive back in the corporate takeover game, which these days
is anything but straight. You'd have to go back to the roaring twenties to
find so many creative screw-jobs.
Some people are drawn to power; guess I'm more attracted to the idea of
occasionally whittling it down to size. So when some hotshot raider found a

happy little company whose breakup value was worth more than the current
stock price, then decided to move in and grab it, loot the assets, and sell off
the pieces—one of the players apt to end up downfield was Matt Walton.
For reasons that go a long way back, I liked to break up the running patterns
of the fast-buck artists. It's a game where you win some and lose some. The
trick is to try and beat the odds, and I suppose I'd had my share of luck.
Give you a quick example. Back in the spring, a midsize cosmetics outfit
called me in as part of their reinforcements to fight an avaricious rape,
better known as a hostile takeover, by one of their biggest competitors.
After looking over the balance sheet and shares outstanding, I suggested
they divest a couple of unpromising consumer divisions—namely a "male
fragrance" line that made you smell like a kid leaving the barbershop, and a
"feminine hygiene" product that could have been a patent infringement on
Lysol—and use the proceeds to buy back their own common shares. We
also threw together a "poison pill" that would have practically had them
owning anybody who acquired more than twenty percent of their stock. Our
move scared hell out of the circling vultures and reinforced my reputation
on the Street (unduly harsh, I thought) as a give-no-quarter son of a bitch.
Another fact worth mentioning is that I worked without benefit of a real
office; after selling off my piece of the law partnership, I operated out of
my place downtown, with a telephone and a couple of computers. A kindly
gray-haired dynamo by the name of Emma Epstein, who had a rent-
controlled apartment down the block, dropped by afternoons and handled
correspondence, filing, matrimonial advice, and the occasional pot of
medicinal chicken soup. The only other member of my staff was a shaggy
sheepdog named Benjamin, who served as security chief, periodically
sweeping the back garden for the neighbor's cat. That was it.
Oh, yes, one other item. Crucial, as it turned out. I'd always been a
collector of something—once it was antique spurs, for chrissake—but about
ten years earlier I'd started to get interested in things Japanese and ended up
going a little overboard about old swords and such. Joanna's unscheduled
departure managed to burn out a lot of my circuits, and what had been

merely an obsession grew into something a little crazy. For a year or so I
became, in my own mind at least, a sort of American ronin, a wandering
samurai.
You see, the Japanese warriors had a code that said you ought to live
every moment in full awareness of your own mortality. When you adopt
this existential outlook, so they claimed, all regrets, emotions, complaints,
can be seen as an indulgence. You're ready to meet life head-on, to risk
everything at a moment's notice. That's the only way you ever discover who
you really are, and it's supposed to make you marvelously detached.
Almost enough to make you forget how your raven-haired, brilliant, sexy
mate packed it in one New Year's Eve twenty
months past . . . when you called late from the office, again . . . after
declaring that that was the goddam last straw and apparently the only thing
you could find worthy of undivided attention came printed on goddam
computer paper and she was goddam sick of it—which she demonstrated
the next day by slamming the door on her way out.
Add to which, she used my momentary disorientation to get custody of
Amy. So while I was battling corporate Goliaths, I let her walk off with the
only thing I would have given my life for. The more time went by, the more
I wanted to kick myself. Alex Katz (of Walton, Halliday, and Katz—now
minus the Walton) read the custody agreement the day after I signed it,
sighed, glared over his smudgy half-lenses, and announced that this kind of
unconditional surrender should only be signed on the decks of battleships.
What did he have, a law partner or a fucking schlemiel?
He was right, for all the wrong reasons. Not long after, I cashed in my
piece of the firm and went independent. Win or lose, it's best to sort things
out on your own. I was then forty- three, six one, and weighed in at an even
one eighty. There were a few lines on the face and several more on the
psyche, but the sandy hair was mostly intact, and I could still swim a couple
of miles if absolutely essential. Maybe there was still time for a new start.
Part of that therapy was going to be our trip.

Perhaps I should also add that I'd had a brief "rebound" fling, for what it
was worth. The lady was Donna Austen, a name you'll recognize as
belonging to that irrepressibly cheerful "Personalities!" host on what
Channel Eight likes to term its Evening News. She'd called about a segment
on the subject of the cosmetics company takeover, then very much in the
local press, and I'd said fine. She ended up downtown, and soon thereafter
we became an item. She was the closest I'd had to a girlfriend, and at that it
was mostly an on-again, off-again thing—which terminated in an event
reminiscent of the Hindenburg’s last flight. In the aftermath I went back to
chatting with Amy every day on the phone, putting together stock buyback
packages, and collecting Japanese swords.
Anyway, while the cab waited for a light, worn-out wipers squeaking, I
fumbled around in my coat pocket and extracted the meishi, the business
card, one side in English, the other Japanese, that had been included with
Noda's letter. He'd
personalized it with a handwritten note on the side with English print. Now,
I'd kept track of the new Japanese investment heavies in town—Nomura,
Daiwa, Nikko, Sumitomo—since you never know when a corporation
might need some fast liquidity. They were starting to play hardball, and
these days (with all that cheap money back home) they would underbid a
nine-figure financing deal before Drexel Burnham could spell "junk bond."
But Nippon, Inc.? Never heard of the outfit.
Well, I thought, you'll know the story soon enough. The driver had just
hung a right on Fifty-seventh and was headed east toward York Avenue. I'd
called that afternoon to lower the reserve on one of my lots and had been
told that because of some union squabble the preview would continue till
just before the sale, now scheduled to kick off at eight-thirty. It wasn't quite
seven yet, so we would have at least an hour to run through my list of
prospective buildings.
As the cab pulled up next to the chaste glass awning, I took a deep
breath, shoved a ten through the Plexiglas panel between the seats, and
stepped out. While the battered Checker (lamented remnant of a vanishing

species) squealed into the dark, I unbuttoned my overcoat and headed up
the steps. A few grim-faced patrons milled here and there in the lobby, but
nobody looked familiar. There was even a new girl at the desk by the stairs,
ash blond and tasteful smoked pearls, pure Bryn Mawr art history. A class
act, Sotheby's.
It appeared that most of the Japanese crowd was already upstairs,
undoubtedly meditating on their bids with the meticulous precision of the
Orient. I was headed up the wide, granite steps myself when I decided to
check out the downstairs one last time.
Hold on, could be there's a possibility. Waiting over by the coat check,
thumbing the catalog, was a distinguished-looking guy, retirement age,
wearing a light, charcoal suit. Italian. Unlike the usual Japanese
businessmen, he clearly didn't assume he had to dress like an undertaker
and keep a low profile. No, probably just some Mitsubishi board member
thinking to diversify his portfolio with a few objets d'art.
Abruptly he glanced up, smiled, and headed my way. I realized I'd been
recognized.
"Mr. Walton, how good of you to come." After a quick bow he produced
his card, a formality that totally ignored the fact he'd already sent me one.
As convention required, I held it in my left hand and studied it anew while I
accepted his hearty American handshake. "It's a pleasure to meet you. At
last."
At last?
I let that puzzler pass and handed over a card of my own, which he held
politely throughout our opening ritual, then pocketed.
Noda had a mane of silver hair sculptured around a lean, tan face, and he
looked to be somewhere between sixty and seventy. Though his dark eyes
were caught in a web of wrinkles that bespoke his years, they had a sparkle
of raw energy. He moved with an easy poise, and the initial impression was
that of a man eminently self-possessed. He had that sturdy, no-nonsense
assurance usually reserved for airline pilots. If you had to entrust somebody
with your wife, or your life savings, this man would be your pick.

Well, my new client's a mover, I told myself. All the same, I accepted his
hand with a vague twinge of misgiving. What was it? Maybe something
about him was a little too precise, too calculated.
"Mr. Walton, permit me to introduce my personal consultant." He
laughed, a slight edge beneath the charm, and more wrinkles shot outward
from the corners of his eyes. "I always seek her approval of major
acquisitions, particularly those of the Heian period, her specialty." He
turned with what seemed obvious pride and gestured toward the tall
Japanese woman standing behind him. I'd been so busy sizing him up I'd
completely failed to notice her. "I must confess she is, in fact, my . . . niece.
I suppose that ages me." Another smile. "You may possibly be familiar with
her professional name, so perhaps I should use that. May I introduce Akira
Mori."
Who? I stared a second before the face clicked into place. And the name.
They both belonged to a well-known commentator on Tokyo television.
Only one slight problem: her "specialty" had nothing to do with art.
"Hajimemashite. How do you do, Mr. Walton." She bowed formally and,
I noticed, with all the warmth of an iceberg. No surprise—I knew her
opinion of Americans. She did not bother meeting my eye.
She looked just as I remembered her from the tube. A knockout. Her hair
was pulled back into a chignon, framing that classic oval face, and her age
was anybody's guess, given the ivory skin and granite chin. She was
wearing a bulky something in black and deep ocher by one of the new
Tokyo designers. For some reason I was drawn to her fingernails, long and
bronze. The parts, a mixture of classic and avant-garde, did not seem of a
piece, the kind of detail you didn't notice on the TV. But there was
something more important than her looks.
I'd been to Tokyo from time to time for various reasons, and I'd heard a
lot of stories about this lady. Fact is, you didn't have to be Japanese to know
that Akira Mori was easily Japan's most listened-to money analyst. You've
probably seen her yourself in snippets of that weekly chat show she had on
NHK, which used to get picked up by the networks here when they needed

a quick thirty seconds on "Japan This Week" or such. Her ratings had little
to do with the fact she's a looker. She was, talk had it, an unofficial source
for official government monetary policy. Akira Mori always had a lead on
exactly what was afoot, from the Bank of Japan to the Ministry of Finance,
even before the prime minister broke the news.
Miss "Mori," whoever the hell she was, had some very well placed
friends. Tell you something else, she didn't go out of her way to find
flattering things to say about how Uncle Sam handled his bankbook these
days. Her appearance here made Noda's unorthodox office plans even more
perplexing.
"We both appreciate your taking time from your schedule to meet with
us." He bowed again. "We've been looking forward to having you join us at
the sale."
While Akira Mori appeared to busy herself with a catalog, Noda and I
got things going with that standard formality preceding any serious
Japanese professional contact: meaningless chat. It's how they set up their
ningen kankei, their relationship with the other guy, and it's also the way
they fine-tune their honne, their gut feeling about a situation. Any
greenhorn foreigner who skimps on these vital niceties runs the risk of
torpedoing his whole deal.
In response to my pro forma inquiries, Matsuo Noda declared he liked
New York, had even lived here for a while once, honestly found it less
hectic than Tokyo, usually stayed these days at the Japanese hotel down on
Park but sometimes picked the Plaza when he needed to be closer to
midtown. He adored La Grenouille and thought La Tulipe overpraised.
When I pressed him, he declared his favorite Japanese place to dine was
Nippon, over in the East Fifties (maybe he merely liked the name, but it
was my pick as well).
After he had in turn solicited my own views on Sotheby's, a couple of
the galleries down Madison, and various North Italian eateries, he
suggested we go on upstairs and preview the lots.

All the while Miss Mori appeared to ignore us, standing there like a
statue of some Shinto goddess, except for the occasional tug at her dark
hair. Maybe she didn't give a damn about this obligatory small talk, thought
it was old-fashioned. Or possibly she liked the idea of being the only one
not to show a hand. And as Noda led the way up toward the exhibition
rooms, she trailed behind like a dutiful Japanese woman—while we,
naturally, continued to talk of everything except, God forbid, why we were
there.
In the first room we were suddenly in my arena—samurai swords and
battle gear.
"This is your special interest, is it not, Mr. Walton?" Noda smiled, then
turned to admire the row of shining steel tachi, three-foot-long razors, now
being watched over by a trio of nervous guards. Sotheby's didn't need some
amateur Toshiro Mifune accidentally carving up the clientele. "I understand
you have a notable collection yourself."
What? What else did he know about me?
Easy, Walton. Play the game. I knew what a Japanese would expect in
reply.
"Matter of fact, I've lucked onto a couple of items over the years." Then
the standard disclaimers. My own painstaking collection was merely a grab
bag of knickknacks, the fumbling mistakes of a dabbler, etc., etc.
Noda monitored this culturally correct blarney with satisfaction. "As it
happens, Mr. Walton, I was in Nagoya last year when several of your pieces
were on loan for the show at the Tokugawa Museum. I still recall certain
ones, particularly that fine fifteenth-century katana, attributed to the Mizuno
clan. Unusual steel. No date or mark of the swordsmith, but a remarkable
piece all the same." A split-second pause. "Your reluctance to part with it
was most understandable."
This man had done his homework! Or maybe he'd been the one who had
tried to buy it. The steel was unusual, too heavy on copper. I'd even had a
little metallurgical testing done on it down at Princeton, just to prove that
hunch. But it was no big

deal, merely an oddity that had fallen my way via an estate sale. There was
an anonymous inquiry shortly after the exhibition opened, with an insistent
offer, but I'd turned it down.
Poker time. "I was honored. Your figure was more than generous."
He laughed—bull's-eye. I watched as he glanced back at Miss Mori,
maybe a bit nervously. Then he returned his attention. "Merely a small
gesture for the museum. I felt it should be back in Japanese hands." He
continued, his voice now sober. "You do understand?"
"Certainly." I just stared.
"Good. I see I was right." He had paused to examine a large
monochrome screen. It was eighteenth century and he inspected it with only
mild interest, then moved on.
I was still knocked over. Could that be why he'd retained me as his U.S.
legal counsel? Because of some damned antique sword? Okay, I was
already getting the idea Matsuo Noda might be a trifle eccentric, but all the
same . . .
"Interesting." He was pointing at a long picture, part of a series locked in
a wide glass case. "Honto ni omoshiroi, desu ne?'
Miss Mori was already there. In a voice scarcely above a whisper she
proceeded to give him a rundown of pros and cons. It was the first time I'd
noticed any enthusiasm out of the woman all night.
I checked my catalogue. The piece was a Heian hand scroll, said to be
"exceedingly rare." After a few moments Noda motioned me over. "Perhaps
you could give us your opinion. What do you think?" He pointed down.
"The subject is intriguing. These are ladies-in-waiting for the emperor,
Fujiwara. Notice the delicate refinement of the coloring, the matched
fabrics, each enhancing the other like flowers in a bouquet. That was eight
centuries ago, just before the rise of the first shogun, the first 'generalissimo'
who would rule in the emperor's name."
When he said "shogun," niece Mori shot him a quick admonitory glance.
There was some kind of unmistakable electricity passing. Something left
unspoken.

"The Heian era ended with the great conflict between the Heike and
Genji clans that led to the death of the ruling emperor in 1185 and the loss
of the imperial sword at sea." Next he said something in guttural Japanese
to Mori, obviously very intent, and indicated one corner of the painting,
where the emperor sat. Her reply was quick and curt. Now, I only know a
little of the language, maybe a couple of cuts above Berlitz level, but I did
manage to pick up she wasn't talking about the painting. Something to do
with the emperor himself, though I missed the rapid-fire delivery.
In response to Noda's question I tried to sound intelligent, saying the ink
coloring looked well preserved, or some such auction house mumbo jumbo.
It wasn't my thing really, which the man surely knew. He seemed to know
everything else about me. After he listened politely, they switched back to
Japanese and finally settled on a bid. I watched as she marked it in the
catalogue—low six figures.
Walton, I thought, you're dealing with a pair of heavyweights.
By then I'd decided not to bother bidding on anything. There were too
many curious twists, not to mention the building deal. Surely the ritual had
gone far enough, the samurai negotiating ploy of making your adversary be
first to reveal his game plan.
Why not bring up why we were there, just for the hell of it?
When I did, Noda betrayed a fleeting smile. "But of course, the
building." He made it sound like some kind of trivial annoyance, a nuisance
to get out of the way so we could all get back to the serious work of
admiring the pretty pictures.
Touche, I thought. Round one to Noda, on points. "I assume you've had a
look at the package of materials I messengered up to your hotel yesterday?"
A broker friend had put together some listings for office buildings
around midtown—it turned out the market was softening a touch due to the
latest construction binge—and I'd hoped that maybe something would catch
Noda's eye. Matter of fact, there were a couple of real bargains over near
Sixth.

"My people have examined it in detail. We would like to move forward
on the twenty-story building on Third Avenue."
For a second I thought he was joking. Sure we'd tossed in the write-up,
because it fit his profile, but it was a crazy all- cash deal, and they wanted
ninety million, firm.
"Did you read the terms on that one? It's all—"
"There is a vacant floor, is there not? Available immediately?"
"Well, yes, but—"
"There may be a few items to clarify—we would like your legal opinion
concerning the leases of the existing tenants—but nothing major. If the
seller is prepared, I think we could even go to contract early next week,
while I'm here. I would like very much to close as soon as possible. If some
of my staff can meet with the seller's attorneys over the weekend, perhaps
we can start work."
Over the weekend? No counter bid, no haggling? Now, you didn't have
to be a brain surgeon to realize this was a fast-track deal; Matsuo Noda was
a man in a hurry. "Looks like you just may have yourself a piece of
property. I'll try and get hold of them in the morning, if I can, and start the
ball rolling."
"Excellent." He hesitated a moment, as though framing his words, then
continued, "But in fact, Mr. Walton, we'd actually wanted to meet you
tonight for an entirely different purpose. I'd hoped we might be working
together on, well, some additional matters."
"Something else?"
"As you might surmise, we are not enlarging our presence here to no
purpose. Tonight I wanted to tell you something about the objectives of
Nippon, Inc. And then let you decide if what we propose merits your
participation. Your financial expertise could make you a great asset to us."
Hang on, I thought. This thing is starting to go a little fast.
"What do you have in mind?"
"First let me say you are a man I have long admired. Your style is not
unlike my own. We both understand the importance of moving cautiously,

of keeping our adversaries off guard. Most of all, there is a rigorous
discipline about your work. That is the style of bushido, the way of the
warrior." He smiled, and his tone lightened. "I think we could cooperate
very effectively."
Already I was wondering whether I really wanted to "cooperate" any
further with Matsuo Noda. Something about the man, and Miss Mori, made
me very nervous. Besides, I was trying to finish off work now, not begin
more. But he'd found out the one line that would keep me listening. He'd
somehow discovered I was a deep admirer of the old-time military
strategists of the East—such as Sun Tzu and Miyamoto Musashi.
Like a hostile takeover bid, the ancient Japanese way of
combat was ritualized, as mounted warriors rode out, announced their
lineage (to the SEC?), then matched up with men of equal renown. The
samurai prized flexibility over brute strength; they had steel swords that
handled like scalpels and body armor that was a woven mesh of lacquered-
iron scales laced together in rows to create a "fabric" of metal. Those
weapons and armor made for agile movement, easy feints, fast changes in
strategy—all trademarks of mine on the corporate takeover battlefield.
As a result, I fancied myself some kind of samurai too. . . .
The question was, how did Noda know this?
For some reason just then I glanced over toward Akira Mori. She
appeared to be studying a scroll with the detachment of a Zen monk in
zazen meditation, but she wasn't missing a syllable.
"Care to run through whatever it is you have in mind?" I indicated one of
the ottomans along the side of the room, now clearing as bidders rose to go
inside. I watched as the dark- suited Japanese businessmen filed past, none
with Noda's sense of style, and noticed that several seemed acquainted with
him, pausing to offer obsequious bows.
"With pleasure." He settled himself. Mori, now looking over some
screens, still didn't elect to join us. "First, may I presume you already know
something of Nippon, Inc.?"

"No more than what I gleaned from that package you forwarded. Almost
nothing, really."
He laughed, a flash of even teeth. "Perhaps I should be pleased. These
days too much visibility in the U.S. can sometimes stir up 'friction’."
"Your prospectus indicated you help banks manage capital, so I assume
you're looking to enter the financial picture here."
That was the funny part, recall? There was no indication of any U.S.
action in his prospectus. Yet I knew that, overall, Japan's U.S. investment,
private and public, was in the tens and hundreds of billions. Pension funds
and industries were building factories, financing corporations, snapping up
Treasury paper. Japan had become a major source of fresh money for the
U.S. and for the world. But Nippon, Inc. wasn't one of the players.
"Yes, we intend to be concerned, initially, with the position of Japanese
capital in the U.S. We are particularly interested in the matter of Treasury
debentures."
That was what anybody would have figured. Just that week the Journal
had noted that Japanese investors were expected to cover half of our
Treasury overdrafts for the year. They were advancing us the bucks to keep
up that spending spree known as the national deficit. They sold us Toyotas;
we sold them federal IOUs, using the proceeds to buy more Toyotas. In
effect they were financing the good life, supplying us the "revolving credit"
to buy their cars and DVDs and semiconductors.
"Treasuries always make a lot of sense." I picked up the thread. "Full
faith and credit of the U.S. government, all the rest."
"Quite so, Mr. Walton, but since all things are theoretically possible, over
the past few months I've undertaken a small program through subsidiaries
of Nippon, Inc. to begin cushioning Japan's exposure in your Treasury
market somewhat." He paused. "Now that my effort may be expanding
significantly, I was wondering if perhaps you might consent to serve as our
American agent in that endeavor."
For a second I didn't grasp what he was driving at, probably because my
involvement seemed totally unnecessary. Surely he realized Treasuries were

bought and sold here every day on the open market through dealer banks?
No big deal. Why bother hiring a middleman?
"I can make this quick. Why don't you just contact some of the
authorized Japanese brokers here in New York? You must have used them
before. Nomura Securities is well respected. There's also Nikko Securities.
And Daiwa Securities America. They're all primary dealers in Treasury
paper now. Buy or sell whatever you like."
Noda nodded. "Of course. But we both know the financial markets can
be very delicate. Impressions count for much, which is why I have chosen
to keep a low profile. Consequently, I would prefer to continue to operate
for a time outside normal channels. And in that regard, I now believe it
would be desirable to have an experienced American financial specialist
assist us. You, in particular, would be ideal."
I studied him. "Let me make sure I understand this. You're asking me to
step in and begin fronting for you here in the Treasury market?"
"That is correct, Mr. Walton." He rose and strolled over to the row of
tachi swords, where Miss Mori was still standing. They were lying on a
spread of dark velvet, and she was scrutinizing them with a connoisseur's
eye.
Now, I'd like to think I was a quick study of a situation, but this one was
definitely out of whack somehow. If all Noda wanted was to roll over a
little government paper, why the hush-hush? More to the point, why a
whole building in midtown? He could easily do it from Tokyo. The scenario
didn't compute.
"Before this conversation goes any further, I'd like a better idea of the
kind of activity you're talking about. Selling Treasuries? Moving the funds
into corporate bonds or munis? Commercial paper, equities."
"Sell?" He abruptly paused to watch as the staff began carefully
assembling the weapons to take inside for the sale, and his mind seemed to
wander. "You know, Mr. Walton, the sword always has held the greatest
fascination for me. To make one of these, layers of steel of different
hardnesses were hammered together like a sandwich, then reheated,

hammered out, folded, again and again, until there were perhaps a million
paper-thin layers." He pointed to one of the long blades now glistening in
the light. "You cannot see it, of course, but they used a laminate of soft steel
for the core, harder grades for the cutting edge. And whereas the edge was
tempered quickly to preserve its sharpness, the core was made to cool very
slowly, leaving it pliant." He suddenly smiled with what seemed
embarrassment and turned back. "I take great inspiration from the sword,
Mr. Walton. The man holding one must learn to meld with the spirit in the
steel. He must become like it. What better than to meet the world with your
hardest surface, yet maintain an inner flexibility, able to bend to
circumstance as the need may arise?"
He stood a moment as though lost in some reverie then chuckled.
"Sometimes I do tend to go on and on. I believe it was selling you asked
about. The fact is you would not be actually selling Treasury obligations."
"Then what . . . ?"
"Are you familiar with interest-rate futures?"
"Of course." The question was so unexpected I answered almost before I
thought. Futures contracts were part of the big new game on Wall Street,
although most of the action was still out in Chicago, places like the Merc
and the Board of Trade, left over from the old days when farmers sold their
crops in advance at an agreed-upon price. The farmer "sold" his grain
harvest to a speculator while it was still nothing but green sprouts. He was
worried the price might drop before he got it to market; the speculator was
praying it would head up. The farmer, interestingly, was selling something
he didn't yet have. But even if the price of wheat suddenly tanked, he was
covered.
These days futures contracts were traded for all kinds of things whose
value might change with time. High on that list were financial instruments
such as Treasury notes and bonds, whose resale worth could drop if interest
rates unexpectedly rose. If you owned a bond and were worried it might go
down in value, you could hedge your exposure with a futures contract, in

effect "selling" it in advance at the current price and letting somebody else
assume the risk of future market uncertainty.
Modern finance being the marvel it is, you could even sell bonds you
didn't own, just like the farmer's nonexistent grain. The Wall Street crowd
called this a "naked" contract, since you were obligated to go out and
acquire that bond in the open market on the day you'd agreed to deliver it,
even if the price had skyrocketed in the meantime. Or you had to try and
buy back the contract. Of course, you were betting that price would go
down, letting you pocket the difference.
Pious spirits on the futures exchanges called these deals high finance and
risk hedging. They operated, however, remarkably like legalized gambling.
Dabbling in interest-rate futures was not for those with a dicey heart.
"Our objective," Noda went on, "is to cushion Japan's exposure
somewhat."
"With futures contracts?"
"Precisely. U.S. Treasury obligations are held by a variety of investors in
Japan, but up until now we have made very little use of the protection
possible in your futures markets. Nippon, Inc. will concern itself with that."
I listened thoughtfully. "So you're saying you want to create an insurance
program for Japanese investors in case the price of Treasuries weakens?"
It made sense. If interest rates went up here, reducing the value of their
government paper, then the price of his futures contracts would rise to offset
the loss.
I glanced over at Japan's monetary guru, Akira Mori, who
was carefully examining her bronze fingernails. Was she the one behind all
this sudden nervousness about America's financial health? What could these
two know that we didn't, I wondered. It was all a bit mysterious.
One thing was no mystery, though. Whatever was going on with Matsuo
Noda and Akira Mori gave me a very unsettled feeling.
"I'm flattered." I looked him over. "But afraid I'll have to pass. This fall I
plan to take off for a while and . . . catch up on some personal matters that
—"

"Mr. Walton," he cut in. "I would urge you not to lightly dismiss my
proposal." He was staring back at me intensely. "I can only say for now that
issues are involved . . . well, they encompass matters of grave international
consequence." Another pause, followed by a noticeable hardening of tone.
"Your other obligations cannot possibly be as important. It would be in your
best interest to hear me out."
Want the truth? At that moment all my negative vibes about Matsuo
Noda crystallized. He wasn't threatening me exactly. Or maybe he was. The
large viewing room was all but empty now. Maybe he'd deliberately waited
before getting down to his real agenda.
"My other 'obligations' happen to be very important to me just now."
"Then please consider rearranging them."
"Besides, my fees can be substantial." They weren't all that substantial,
but I was looking to slow him down.
"Your fees do not present a problem." He continued, "This afternoon a
retainer of one hundred thousand dollars was deposited in your personal
account at Chase."
"What in hell . . .!"
"Money is of no consequence in this matter, Mr. Walton. Time is."
"You seem awfully sure I'll agree."
"We expect your involvement to begin immediately. I cannot stress too
strongly the urgency of what you will undertake." He smiled thinly. "I also
feel confident a man who enjoys a challenge as much as you do will find
our undertaking . . . intellectually rewarding."
Seems I was hired and I hadn't even said yes.
This guy had another think coming. Besides, he could get anybody to do
what he wanted. He didn't need me. As I stood
there, I started trying to guess the dimensions of Matsuo Noda's financial
hedge. Taken all together, Japan probably had roughly a hundred billion and
change tied up in U.S. government paper. No way could he be thinking of
covering more than a fraction of that. I knew plenty of law clerks who could

do it, for godsake. A few phone calls to a couple of floor traders in Chicago
...
"Look, the most I can do for you is recommend some very competent
brokers I know to help you out. There shouldn't be too much to it. You'll
just have to go easy. You can't hit the market makers in Chicago with too
much action all at once. Prices get out of kilter. Then, too, there are
exchange limits. . . ."
"That is why we will be trading worldwide." Noda withdrew a folded
sheet of paper from his breast pocket. "Perhaps you'd like to glance over our
program. These are cumulative totals, which include our activity to date, but
we will begin moving much more rapidly as soon as I've completed all the
financial arrangements with our institutional managers at home. Perhaps
you will see why we need a monetary professional."
I was still chewing on the "financial arrangements" part as I took the
paper, opened it, and scanned the schedule of contracts. While I stood there,
the room around us sort of blurred out. I had to sit down again. All his talk
about samurai and nerves of steel was for real.
Matsuo Noda had a program underway to sell futures on a pile of U.S.
Treasury bills, notes, and bonds he didn't own, "naked," in an amount I had
trouble grasping. I knew one thing, though: if interest rates headed down,
raising the value of those presold obligations, he'd be forced to cover
awesome losses. He'd be in a financial pickle that would make Brazil look
flush. On the other hand, if some disaster occurred and U.S. interest rates
suddenly shot sky high . . .
Numbers? The CBOT's long-interest contracts, notes and bonds, are in
denominations of a hundred thousand each; the Merc's short paper, bills and
CDs, are in units of a million per. Finally I did some quick arithmetic and
toted up the zeros. Something had to be wrong here. Nobody had balls that
big. I decided to run through the figures again, just to be sure.
It was along about then that I realized all Noda's pious talk about
sheltering Japanese widows and orphans had been purest bullshit. Resting
there in my hand was the biggest wager slip in world history. Assuming

enough players could be found worldwide to take his action, he was
planning to advance-sell U.S. Treasury IOUs in the amount of five hundred
billion dollars. A full quarter of our national debt.
His bet: something or somebody was about to push America over the
brink.

CHAPTER TWO

"Yo, counselor. Get thy butt over here and buy me a drink."
I was standing in the smoky entry of Martell’s, on the way back
downtown from Sotheby's, when I heard the voice, a Georgia drawl known
from Wall Street to Washington. And sure enough, leaning against the long
mahogany bar, the usual Glenfiddich on the rocks in hand, was none other
than Bill Henderson.
Long time, no see. I'd actually stopped by for a little ninety proof nerve
medicine myself, not to pass the time with America's foremost cowboy
market-player. But the idea of bringing in a Wall Street pro was most
welcome. If anybody could dissect Noda's game, Bill was the man.
What was I going to do? I'd stalled on giving Matsuo Noda a final
answer, telling him I needed time to think. Then just to make sure the whole
thing hadn't been some sort of macabre hoax, I'd checked at a Chase bank
machine on Lex. He hadn't been kidding. A retainer had been deposited all
right, presumably by certified check, since it had already cleared. I was on
the payroll, ready or not.
Noda was right about one thing. What he planned to do had grave
international consequences. The problem was, his game had just one payoff.
The way I figured it, he won if, and only if, the U.S. suddenly went broke.
As international consequences go, that seemed reasonably grave.
Henderson was the perfect guru to take apart the scenario. Assuming he
was sober. Tell the truth, at first glance I wasn't entirely sure. The guy
looked a mess. I assumed he was holding some sort of private celebration,
or maybe it was a wake. What was the occasion?
"William H., welcome back to town. Thought you'd decamped
permanently down to D.C."
"Packed it in. Back to start making a living again. Could be I've just set
some kind of new world record for the briefest tenure ever seen on the

Council." He eased over to make room, while the jukebox began some
Bobby Short standard about incomparable NY. "So where's your TV star
tonight? Sure love that gal." He toasted Donna's memory. "If tits were
brains, she'd be a genius."
Sexist? Tasteless? That was merely Henderson warming up.
I hadn't actually set eyes on Bill since an ill-fated birthday dinner Donna
had thrown for him in midsummer, a favor to a producer friend of hers at
the station who'd wanted to try vamping a real live millionaire. That
evening he'd arrived with a serious head start on the whiskey, his meditation
on the concept of birthdays, and then proceeded to regale those assembled
with his encyclopedic repertoire of farmer's-daughter and traveling-
salesman vignettes. In the aftermath, Donna swore she'd kill him if he ever
set foot in her place again. When I made the mistake of speaking in his
defense, she critiqued a few of my character defects as well, then added me
to the list.
"Friend, no small thanks to you and that sordid evening, I haven't seen
Donna since."
"That was a dark moment in my history. After listening half the night to
that air-head producer she put next to me, I was in mourning for the hearts
and minds of America." He revolved back to the bar. "What're you
drinking?"
"Something serious." I pointed toward the single malt. Laphroaig neat.
Just then Bill paused to watch as two women in bulky raincoats brushed
past. They receded toward the other end of the bar, settled their coats across
an empty stool, and ordered drinks. One was a youngish blonde, a bit
nervous, having some tall, colored potion that looked as if it could use a cut
of pineapple and a plastic monkey on the glass. But the other one, brunette,
was a different story. Pained eyes, with a psychic armor that could only be
called battle-weary New York. Joanna, all over again. Tanqueray martini.
Straight up.
"Hot damn, sure is good to be back in this town." He was trying, without
conspicuous success, to catch the younger woman's eye.

"Henderson, you're standing next to a man with some news that could
well alarm you considerably."
"Like maybe this dump might run low on booze?"
"Not likely." I reached for my new drink. "I've got to make a decision,
fast. So try to keep a clear head and see if you can help me out."
In my estimation Henderson was a phenomenon—sober or loaded. He'd
emerged from the red clay hills somewhere in north Georgia, former
football All-State ("I only did it for the pussy"), and ended up at Yale Law
—where we shared an apartment for three whole years. By the time we'd
finished our degrees, I figured I was ready to tackle real life, but Bill had
hung in and gone for a Ph.D. in economics. Although his athlete's physique
hadn't survived Yale—an early casualty of the single malt and the Dunhills
—Henderson still had the delusion he was twenty-five. Easter before last
he'd arrived at my place down in the islands with some leggy print model
half his age and a case of Jack Daniel's Black. Did the redneck routine
bamboozle the cautious hearts of his admiring ladies? Probably. Right under
the radar.
All that notwithstanding, it was a commonly accepted fact that Bill was
the sharpest private currency-trader on the East Coast. If tomorrow the
dollar was about to dive, the guy who'd already sold it short tonight from
Hong Kong to Zurich was invariably Henderson. That part of his life had
been all over the papers the previous spring, after he got tapped for the
President's Council of Economic Advisers. I guess some genius on the
White House staff—urged on by that wily senator from New York, our
mutual friend Jack O'Donnell—concluded the Council needed a pet
"contrarian" on board for appearances, and Henderson looked to be a
sufficiently pro-business prospect. Wrong. After a couple of interviews he
was forbidden to make any more public statements. He'd failed to grasp that
the national interest required fantasy forecasts just before elections. Bill
may have been a master of subtlety when he was trading, but otherwise he
tended to call a spade a spade, or worse.
"What's up?" He was about to punt with the blonde after one last try.

"Maybe you'd better go first." I took a sip, savoring the peaty aroma. Let
Henderson decompress in his own good time, then sound him out on Noda's
chilling proposition. "What are you doing here?"
"Call it modesty and discretion." He turned back.
These were not, as you might infer, the first descriptors that leapt to
mind whenever I thought of Bill.
"Care to expand?"
He slid his hand across the bar, extracted another Dunhill from its red
pack, and launched a disjointed monologue starting with the goddam traffic
in D.C., then proceeding to ditto coming in from LaGuardia.
All this time his cigarette had been poised in readiness. Finally he
flicked a sterling silver lighter, the old-fashioned kind, and watched the
orange flame glisten off the mirror at our right. "So, old buddy, that's it. All
the news that's fit to print. History will record this as the moment yours
truly bailed out. I figure it like this. If I can't read the signals myself these
days, what in hell am I doing giving advice? Time to hit the silk. Get back
to making a living. Don't know how long this circus is going to last, but I
figure we'd all better be saddled up and ready to ride, just in case."
As it happens, self-proclaimed ignorance was a crucial ingredient in
Henderson's deliberate "country boy" camouflage, designed to disarm the
city slickers. I estimated the professional dirt farmer next to me, Armani
double-breasted and gold Piaget timepiece, was now worth about forty
million, including a chunk of an offshore bank. Yet for it all, he still liked to
come across as though he'd just moseyed in and wished somebody would
help him through all this fine print.
"Don't bullshit me, Bill." I toyed with my drink. "What you're really
saying is you couldn't get anybody else to agree with you."
"Have to admit there were a few trifling differences of opinion about the
direction things are headed." He positioned his Dunhill in the ashtray and
washed his throat with more Scotch. "You can't cover up the fundamentals
with cosmetics. Things like a megabillion trade shortfall, a debt nobody can
even count, and a dollar that don't know whether to fish or cut bait. Worst of

all, we're still selling the suckers of the world more funny-colored paper
than czarist Russia did. There ain't no quick fix for this one." He took
another sip, then turned back. "But fuck it. Remember that old saying I used
to have about being a lover, not a fighter. I always know when it's time to
call in the huntin' dogs and piss on the fire. I'm back in town to stay. I got
hold of my boys and they're coming in tomorrow to start getting everything
out of mothballs. We're going back on-line."
As anybody who knew Bill was aware, he'd installed a massive
computer bank in the converted "maid's quarters" of his Fifth Avenue
apartment, hooked to the major futures exchanges and financial markets
around the world. Running his operation on a moment-to-moment basis
were a couple of young fireballs, his "Georgia Mafia," who did nothing but
watch green numbers blink on a CRT screen and buy and sell all day. He
and his boys talked a language that had very little to do with English—
jargon about comparing the "implied volatility" of options on this currency
against the "theoretical volatility" for that one, etc. On any given day they
were placing "straddles" on yen options, "butterfly spreads" on pound
sterling futures, "reverse option hedges" on deutsche marks, and on and on.
Half the time, Einstein couldn't have tracked what they were doing. Add to
that, they leveraged the whole thing with breathtaking margins. To stay
alive in Henderson's game, you had to be part oracle, part Jimmy the Greek.
You also had to have ice water in your veins. It wasn't money to him, it was
a video game where the points just happened to have dollar signs in front.
The day I dropped in to watch, he was down two million by lunch, after
which we casually strolled over to some shit-kicker place on Third Avenue
for barbecued ribs and a beer, came back at three, and by happy-hour time
he was ahead half a million. In the trade Henderson was part of the breed
known as a shooter. Up a million here, down a million there—just your
typical day in the salt mines. A week of that and I'd have had an ulcer the
size of the San Andreas fault.
He liked to characterize his little trading operation as "a sideline to cover
the rent." I happened to know what it really paid was the incidental costs of

a lot of expensive ladies. Could be Bill's entertainment fund was in need of
a transfusion.
"Back to business?" I asked. "Like the good old days?"
"Bright and early Monday morning. Got a strong hunch the
Ruskies'll be in the market buying dollars to cover their September shorts
on Australian wheat futures. Might as well bid up the greenback and make
the comrades work for their daily bread. Then round about eleven, I figure
to unwind that and go long sterling, just before London central figures out
what's happening, shits a brick, and has to hit the market for a few hundred
million pounds to steady the boat."
Well, I thought, Henderson the Fearless hasn't lost his touch.
"Bill, I want to run a small scenario by you." I sipped at my drink. "Say
somebody'd just told you he was taking a massive position in interest-rate
futures? What would that suggest?"
"Tells me the man's getting nervous. If he was holding a lot of Treasury
paper, for instance, he'd probably figured rates were about to head up and
he didn't want to get creamed. See, if you're holding a bond that pays, say,
eight percent, and all of a sudden interest rates scoot up to ten, the resale
value of that instrument is gonna go down the sewer. But if you've already
'sold' it using a futures contract, whoever bought that contract is the one
who's got to eat the loss. You're covered."
"I'm not talking about standard hedging." I was wondering how to
approach the specifics. "Say somebody started selling a load of bond futures
naked. Nothing underlying."
"Well, thing about that is, the man'd be taking one hell of a risk." He
swirled the cubes in his glass. "Anybody does that's bettin' big on
something we don't even want to think about. Some kind of panic that'd
cause folks to start dumping American debt paper."
I just stood there in silence, examining my glass. That was precisely my
reading of Matsuo Noda's move. "But I can't think of any reason why
anything like that's in the cards, can you?"

"You tell me. It's hard to imagine. The economy's like a supertanker.
Takes it a long time to turn around. But if you want a special Henderson
shit-hits-the-fan scenario, then I can give it a shot. Say, for instance, some
Monday morning a bunch of those hardworking folks around the world
who've been emptying their piggy banks to finance our deficit suddenly up
and decided they'd like their money shipped back home. That'd create
what's known as a liquidity crisis, which is a fancy way of saying you don't
have enough loose quarters in the cookie jar that morning to pay the
milkman and the paperboy both. The Federal Reserve would have to jack
up interest rates fast to attract some cash. Else roll the printing presses. Or
of course"—he grinned—"we could just default, declare bankruptcy, and
tell the world to go fuck itself."
"Nobody would possibly let it go that far, right?" I toyed with my
Scotch. "Particularly Japan. We owe them more money than anybody."
"Wouldn't look for it to happen. Remember though, right now the U.S.
Treasury's out there with a tin cup begging the money to cover its interest
payments. If the national debt was on MasterCharge, they'd take back our
card. So let some of those Japanese pension funds who're shoveling in
money start getting edgy, or the dollar all of a sudden look weak, and you
could have a run on the greenback that'd make the bank lines in '29 look
like Christmas Club week."
"That's thinking the unthinkable."
"Damned well better be. But don't ever forget, paper money is an act of
faith, and we're in uncharted territory here. Never before has the world's
reserve currency, the one everybody uses to buy oil and grain and what have
you, belonged to its biggest debtor nation. We're bankers for the world and
we're ass over elbow in hock. Everybody starts gettin' nervous the same
day, and the bankers on this planet could be back to swapping shells and
colored beads."
"Offhand I'd say that's pretty implausible."
"And I agree. The system got a pretty good shakeout in the October
Massacre of '87 and things held together, if just barely. Stocks crashed but

the dollar and the debt markets weathered the storm. Nobody dumped.
Japan doesn't want its prime customer to go belly up. Who else is gonna
buy all that shiny crap?"
I studied my glass again. If Henderson, who had pulse- feelers around
the globe, wasn't worried, then maybe Matsuo Noda was just a nervous,
spaced-out old guy. A loony-tune with an itch to gamble. Funny, though, he
appeared the very essence of a coolheaded banker.
About then, the two women across the bar waved for their check and
began rummaging their purses. Sadly enough, the brunette had done
everything but send over an engraved invitation for us to join them. She and
I had looked each other over, and we both knew what we saw. The walking
wounded.
It made me pensive. More and more lately I'd begun to wonder about the
roads not taken, the options that never were. What if all our lives had started
out differently? Where would you be? Where would I be—playing lawyer
now, or maybe driving a cab? It was the kind of woolgathering that drove
Donna Austen insane.
It was on my mind that first afternoon I met her, when she brought her
sound guy down to record some "voice-overs" to use with shots of the
house. She made the mistake of asking for a little background, so I decided
to go way back and give her the big picture. It turned out to be a little kinky
for the six- o'clock news.
I suited the tale by telling her about my father, once a rig foreman in the
oil patch out around Midland, Texas. I was still a kid when he started
tinkering around weekends with drill bits out in his shop, and I was no more
than about ten when he came up with a new kind of tip. Turned out it could
double the life expectancy of a bit, not to mention the life expectancy of a
lot of roughnecks who had to change them every few hours. He patented the
thing, and next thing you knew, he was "president" of Permian Basin
Petroleum.
"Your father was a successful inventor?" She'd set her Tab down on the
living room table and perked up. Here was some "color" for her profile.

"More than that. The man was a believing capitalist." Was she really
going to understand the significance of what happened? "You see, since no
banker would risk loaning out venture capital back in those days, he had to
take PBP public. He needed money so badly he sold off sixty percent of the
company."
"Like those entrepreneurs who created home computers in their garage?"
She brushed at her carefully groomed auburn hair. Maybe here was her
hook, the grabber.
"Close. He took the money, several million, and started production. And
guess what? The bit he'd invented was too good. Next thing you know,
another outfit that will remain nameless here came along and infringed on
the patent, saying 'sue us'—which he began trying to do. But since they
were already tooled up to manufacture, they undercut his prices and drove
PBP's stock down to zip. Then came the kill. They staged a hostile takeover
and—since PBP now owned the patents, not him—axed the lawsuit. Bye,
bye, company."
"How does this story relate to what you do today?" She was checking
her watch, no longer overly engaged.
"Well, by the time all this happened, I was off studying engineering at
the University of Texas. But when I graduated, I decided to do something
else. I headed for Yale Law."
"If you can't lick 'em, join 'em? Something like that, Mr. Walton?"
"Not exactly, Ms. Austen. I wanted to find out if the Bible's right: that
guys who live by the sword better be ready to die by the sword. After the
sheepskin, I shopped around and found the Manhattan law firm that handled
the biggest oil-field-service outfit in the country, then applied to that firm's
corporate department. A couple of years and a lot of memos later, our oil-
field client somehow got the idea they ought to go vertical, acquire their
own source of equipment. Next I ran some numbers and showed them how
profitable it would be to acquire a certain tool company that now owned the
patent on a terrific drill bit. Of course, it would require a hostile buyout, but
with a little restructuring they could swing it financially."

"And?"
"I worked nights and weekends for six months and personally devised
the takeover. By oddest coincidence, when we were through we decided to
strip all that company's overpaid executives of their 'golden parachutes' and
dump them on the street. My graduation present to the old man."
She rolled her eyes and waved at her sound man to shut off the mike.
"Mr. Walton, I think our viewers would be more interested in personal
stories."
What did she want, I wondered. This was the most "personal" story I
had.
"What do you mean? What I eat for breakfast?"
"I do personalities." She looked around the living room. "Are you
married?"
"I was."
On came the tape. But she didn't get what she wanted. Joanna wouldn't
appreciate being critiqued on Channel Eight's evening news. And Amy
would have killed me. So I just plunged ahead and finished off the other
saga.
"There's a bit more to this intimate bio. Guess I'd seen enough quick
money in the oil business that I'd forgotten you were supposed to be
impressed by it. Or maybe I'd just never mastered the art of kissing my
elders' asses convincingly. You'll find, Ms. Austen, that those are two
attitudes whose rewards are largely intangible; Wall Street compatibility
definitely not being on the list. After five years the Management Committee
offered a partnership, but by then I'd decided to go out and try making it on
my own. Be my own man."
She waved the sound man off again. "You mean you quit?"
"Couldn't have said it better. I hung up a shingle . . . and started playing
the other side of the scrimmage line."
"I understand you've been in quite a few takeover fights."
"Let's say I've fought a lot of takeovers, Ms. Austen. There's a subtle but
important distinction."

Donna Austen turned out to be more interested in my marital status than
in anecdotes about corporate mayhem. Thing was, beneath all that glitz I
found her a challenging woman. Amy, on the other hand, despised her. But
then she never likes anybody I bring home. The real problem, however, was
that I kept thinking more about Joanna than I did about Donna. As witness
this evening, when that sadder-but-wiser brunette headed out the door
reminded me of her more than a little. . . .
"Hate to see that young specimen depart without a good-faith offer of
condolence." Henderson was wistfully eyeing the young blonde. Definitely
his type. "Trouble is, I couldn't locate the equipment tonight with a compass
and a search warrant." He hoisted his glass, then turned back and reached
for another Dunhill. "So tell me what brings you uptown. Never knew you
to venture this far into civilization just to stand a drink for your oldest and
wisest confidant."
Back to reality. "William H., you will undoubtedly find this difficult to
accept, but I just got asked to front some Treasury action for a new client.
Selling futures."
"Where do you find your suckers?" He grinned. “That's never been your
game."
"Hey, at least I know the rules. Corporations have been known to hedge
their debt offerings, my friend. But what I've done up to now's been strictly
bush league compared to this."
"So what's the play?"
"A foreign outfit that wants low profile. And P.S., they're talking
substantial numbers."
"What do you mean, 'substantial'?" Suddenly Henderson's input file was
on red alert.
"Probably wouldn't impress a high roller like you, Bill." I paused. "Half
a trillion dollars."
"Jeezus." He went pale. "Who's putting up the earnest
money for this shot? Let interest rates head the wrong way, you couldn't
cover the margin calls on a position that size with the GNP of South

America."
"What if it happened to be some of our friends from across the Pacific?
An outfit that calls itself Nippon, Inc." I looked at him. "Ever hear of it?"
"Nope." He just stood there, examining his drink as though it suddenly
had acquired an enormous insect. "But you've got a surefire knack for really
messin' up an evening."
"I guess this is what's meant when people talk about the big time."
"Christ Almighty. Tell you one thing, that's a hell of a number to put on
the table. I'd sure like to see those boys' hand."
"Maybe somebody's paying to see ours." I finished off my drink and
signaled for another. The more I thought about Matsuo Noda, the more I
realized I needed it. "You know, this half scares the crap out of me."
"Matt, old buddy, do yourself a favor. Stand clear. Just back away." He
was getting more sober by the second. "You'd be lifting up some kind of big
rock when you don't know what's under it. I never do that. Ironclad rule.
Same as I always cut losses at ten percent and never let a long position ride
over a weekend. And I'll tell you something else. Nobody lays down a bet
like that unless he knows the casino's fixed." He paused. "I wonder if
maybe we oughtn't to give Jack a call?"
"O'Donnell?"
"Low-key. Just touch base. Inside word is his Finance Committee's going
to be holding hearings on foreign investment, maybe in a couple of months.
Besides, I know for a fact he owes you a few."
That was true. Senator Jack O'Donnell was headed for reelection
headaches. He was America's corporate nightmare— a former professor of
labor law at Columbia who'd gone out and bought some tailored suits, shed
thirty pounds, dyed his hair, and actually gotten elected to the U.S. Senate.
He was despised on Wall Street for good reason. O'Donnell was the Grand
Inquisitor of the corporate scene, hauling CEOs in front of his committee
every time he sniffed some new scam to shortchange stockholders. Since
we saw eye to eye a lot, I'd made it a point to lean on a few of my clients
and come up with some campaign bucks for him, telling them it was good

"insurance money." Still, if I leaked this to Jack, I'd probably be reading it
tomorrow in The Washington Post.
"Henderson, I can't bring him in. Nobody's talking anything illegal. Still,
I'm beginning to think I ought to keep an eye on this from the inside."
"Matt, you haven't been listening. Let me pass along a major working
principle on how to keep your ass intact in this world. Write it down and
tape it to your phone: Staying on the sidelines is a position too. That applies
to Wall Street, and it damned sure applies to life." He stretched for a
Dunhill, then leaned back. "Ever tell you about that feisty 'coon hound I
used to have, redtick I called by the name of Red?"
"Only about a hundred times." Red was his favorite sermon text.
"Well, ol’ Red somehow conceived the idea he was just about the
meanest fucker in the county, and he was always out to prove it. Then one
night he made the mistake of treeing a big old mama 'coon, up in this little
sycamore we had down by the creek. I heard him barking and raising hell
and I knew I wouldn't get a wink if I didn't go down and see about it."
"Henderson, Christ, I've already heard this."
"Well, I'm gonna finish it anyhow, by God. Sounds like you could use a
refresher course." He took a drink. "Now then, after I made it through the
copperheads and briers and got down there, naturally the first thing I did
was shine that tree with my light and count the eyes. Turns out that mama
raccoon had a bunch of her little ones up there too. So she was in a real
disagreeable frame of mind. Her eyes were bright red and I could tell she
was thinking she just might eat herself a smartass hound for supper. I tried
to explain this to Red, call him off, and get him to come on back up the
house, but no, sirree, nothing would do but he had to take her on. So I
figured it was time he had a little reality contact. I chunked a couple of
rocks, got lucky, and down she tumbled. Next thing ol’ Red knew, he
thought he had his ass caught in a brand-new John Deere hay baler. I finally
had to kick her off him and get her back up the tree before she really got
mad."
"Henderson, I hear you."

"Listen up, friend. There's a moral. You see, ol’ Red didn't have enough
expertise that night to know when to stand off. But I'll tell you one thing: he
learned real fast. Next time he chased that particular mama up that
sycamore, he took one sniff and just trotted right on back to the house." He
sipped again. "Every time I come across a tree full of something I don't
know about, I remember old Red and just turn around and walk away."
"I'm taking your warning under advisement." I threw down a fifty,
glanced at the soundless Mets game on the TV over the bar, and reached for
my coat.
"You'd damned well better."
"Henderson, get some sleep. As a friend and colleague, I must in all
honesty advise you, you look like absolute hell."
"I've always valued your candor." He waved for another drink. "But I've
got some heavy thinking to do."
"Okay, get home safe. Let's keep in touch."
He saluted with his glass. "Tell you what, Matt, maybe I'll just do a little
sniffing around myself, see if I can't get a fix on what's up the tree."
"Okay." I was putting on my coat, checking through the window to see if
the rain had stopped. Looked like it had. "Let's both sleep on it."
"You do that." He wasn't smiling as I headed out the door.
Henderson, who could slumber like a baby when he was down a million
for the day, didn't look like he had much rest ahead that night. For all my
brave talk, I didn't either. Now that the rain was over, I wandered over to
Fifth to look at the trees sparkling in the streetlights. And to think. If you're
from West Texas, you love to see green things wet.
Then I hailed a cab downtown, still with lots of unanswered questions on
the subject of Matsuo Noda. What had happened to my country that could
make it so vulnerable to the financial shenanigans of a single white-haired
foreign banker? Was this what people meant when they talked about the
tides of history? Was the free ride over?
Back when I was a kid, I'd accepted as an article of faith that America
was the greatest, that we were destined to lead the world forever. Was that

hubris? Now I had this sinking feeling we were about to begin learning a
little modesty. Maybe Amy didn't know it yet, but her America was going to
end up being a lot different from mine. All of a sudden folks all over the
world were about to be richer than we were. It was going to take some
painful adjustment.
That's when I finally decided. Yes, by God, I would track this one. And
when I figured out what Noda had up his sleeve. I'd blow the whistle.
Somebody needed to stand guard over this country, and if not me, who?
Matt Walton vs. Matsuo Noda.
As it turned out, the evening still wasn't over. Things continued to go off
track, beginning with when I walked in my front door. I guess by now
everybody's pretty blase about urban crime, but it's still always a shock
when it happens to you. I also think it's getting worse. I can remember five
years ago when Joanna and I never bothered even to latch the street
windows. These days they have bars—a small precaution following an
evening on the town during which everything we owned with an electric
cord attached walked out into the bracing Manhattan night. That was my
first experience with the hollow feeling in your gut when you realize your
sanctum has been plundered. It's not the lost toys, it's the violation that
gnaws at your karma.
This time, though, it appeared to be minor. No forcible entry. Somebody
had actually picked the front-door lock, a fact I only established to my
satisfaction after every other possibility had been considered and dismissed.
Truthfully, I probably wouldn't have noticed anything at all that night if not
for a wayward train of thought on the way home.
I'd been meditating on a particular sword in my collection, a katana,
which was totally without distinction except for a little oral history.
Reportedly the blade once tasted blood in a rather arcane episode. Noda
probably would have approved. The story was, the samurai who'd
commissioned it decided he liked it so much he didn't want the swordsmith
telling anybody how he'd forged it. So after he'd thanked the guy graciously,
deep bows and all the rest, he picked up the sword, bowed one more time,

and then hauled back and sliced him in half, clean as a whistle. The kesa
stroke, left collarbone straight through the right hip. It's said a samurai
could do things such as that in the old days.
My meeting with Noda had made me want to look it over, to refresh my
memory concerning that Japanese capacity for the unexpected. So after I let
myself in through the front foyer, I tossed my raincoat over a banister,
headed down to the kitchen to pour myself a nightcap, and proceeded
upstairs to the "office."
I clicked on the light and then . . .
Jesus! The place had been trashed. Drawers open, files
tipped over, piles of paper askew. After the first numbing shock, that
perception-delay your senses impose before you can actually accept what
you're seeing, I quickly started taking inventory. Okay, what did they get
this time?
Well, the computer and printer were both intact, cordless phone was
there still, the little nine-inch Sony in the corner was untouched. . . . Hey,
could it be they hadn't actually lifted anything?
Then I remembered why I'd come upstairs. Off to the side, under the
back stair, was a big walk-in closet I called my sword room, always kept
under lock and key. I glanced over at the door.
Hold on. It was hanging open slightly. I strolled over and checked it
more closely. The mechanism had been jimmied, professionally, but with
enough force that the metal frame around the door was askew. Not a blatant
entry, but a determined one.
My heart skipped a beat. That's why they didn't bother with TVs. These
guys knew where the real action was, the lightweight, very expensive loot. I
opened the door, took a deep breath, and felt for the light.
You could have heard my sigh of relief all the way out in the street.
From the looks of it, nothing was missing here either.
Be sure now. I quickly glanced down the racks, mentally cataloging the
pieces. Everything had a place, and all the places were still full. Strange.
This stuff was worth thousands. Burglars break in to steal. So what

happened? Maybe something scared them off. My sheepdog Benjamin, the
fearless terror of the streets? He was now snoring at the foot of the stairs,
but who knows . . .
Walton, you lucky stiff, this could have been a major hit. I cursed at the
thought of having to have the door and lock repaired, made a mental note to
remember to call the locksmith over by Sheridan Square in the morning,
and pushed the damaged door closed.
What a hell of a night. I pulled the Sotheby's catalogue out of my pocket,
recalling the auction that had inaugurated this fateful evening, and turned to
chuck it in the file cabinet where I kept all the records for my hobby: prices,
news clippings, correspondence, the rest.
The cabinet, one of those cheap tin jobs you buy at discount office-
supply places, was slightly askew. What's this? I yanked open the top
drawer and saw chaos.
Uh, oh. I went down the row, checking. Tell you one thing, my intruders
had been thorough. Every drawer was a mess, just like the office. Then I got
to the bottom, the one with backup data on the collection. Appraisals,
provenance of the pieces, that kind of thing.
It was empty.
But of course! Any pro would know that half the value of a collection
such as this would be in all the documentation. Which meant my
methodical thieves were no dummies; they'd started with the paperwork, the
valuations and authenticity info . . . which meant they weren't through. I
must have interrupted their . . .
My God! They could still be here.
I edged for the phone and punched 911, the police emergency number.
Next I went back and pulled down a sword, just for protection, and swept
the empty house. It was all nice and tidy.
Finally New York's men in blue showed, an overweight Irishman and his
Puerto Rican partner, both with mustaches. I actually knew them, having
once received a ticket for walking Ben off the leash. We went through the
formalities, lots of questions with no answers worth writing down, and then

they offered to send around a fingerprint squad in the morning. Sure, why
not. And you'd better get new locks for this place, Mr. . . . Walton. Right.
We all thanked each other and I saw them out.
Then I headed back down to the kitchen. What was this all about?
Stealing files? Papers? Those documents, lovingly and painstakingly
assembled, were what made the swords somehow uniquely a part of my
life. Something that actually wasn't going to decide to take a hike the next
week. The stuff had no value to anybody except Matt Walton.
Or so I thought.

CHAPTER THREE

Some people will swear life runs on coincidence. Is it true? If so, here's
one for the history books. It's the tale of an old flame. Before my ex-wife
Joanna, before my later ill-starred adventure with Donna Austen. The lady's
name was Tamara Richardson, and she was a professor at New York
University. When I knew her, though, she was merely an assistant prof with
a shiny new Ph.D. At any rate, she was fresh out of Columbia's graduate
school and very much starting out. I was too. Best I can remember, we met
shopping for green groceries at Balducci's, just up Sixth Avenue from my
place, and we saw each other a few times. It had to be at least fifteen years
(how time flies) since our brief episode.
Tam Richardson, however, was not easy to forget. There was a kind of
under-the-surface intensity about the woman that seemed always close to
the ignition point. When you were around her, you were always worried
somebody might accidentally light a match. However, she had no shortage

of men in her life, and eventually we each went our own way. Ships that
passed in the night. I never expected to hear of her again.
Things didn't quite work out that way, however. She started getting
famous, as a thorn in the side of America's lackadaisical corporate
management. Somewhere along the line, Tam Richardson had taken it upon
herself to single-handedly kick some overpaid ass in America's plush
boardrooms, and she wasn't trying to win any popularity contests doing it.
She was the kid in the story who pointed out the emperor had on no pants,
while everybody else was claiming his tux was a great fit. Guess you can't
fire somebody in academia merely for saying what everybody knows to be
true but doesn't have the guts to verbalize.
Then about a year ago, I noticed a full-length profile of her
in an airline magazine spread about "America's New Achievers." No
escaping her. Between the lines, I got the definite impression she hadn't
really changed all that much over the years. She was around five seven,
high cheekbones, dark hair that looked like it could use a brush, and eyes
that made you think twice about giving her a lot of bullshit. Reminded me
of, say, the young Glenda Jackson with a heavy spike of Debra Winger. For
my money, though, she was just about ideal in the female department. Trim
bottom, nice little twist in her stride, just enough cleavage to make you
wonder. She didn't go out of her way to advertise, but you figured the goods
were on board. My recollection in a nutshell? Tam Richardson was a better
than average looker, damned smart, and she knew no fear. None.
There was something about her, though, that always left people puzzling.
Where'd she come from? American, sure, but no way could she have been
corn-fed Midwest like her surname. The answer was, she had a slightly
more exotic, and probably painful, history than most of us. Maybe that was
part of the reason she always seemed to be a loner, never went along with
the crowd. The one time she'd tried that, it hadn't worked. I got to know her
well enough to hear a bit of the story, but I'd sort of repressed the details.
Maybe I'd do well to come clean and admit I still thought about Tam
from time to time. What's more, I gleaned from the magazine piece that she

still lived right around the corner. Made me think briefly about giving her a
call, get together for a drink, the old days, etc. But I finally decided I'd had
enough high-spirited women for a while. Time to mellow down. Why go
looking for lightning in a bottle?
She'd always liked three things: good-looking men, telling the high and
mighty unpleasant truths, and interior design. Consequently it was no great
surprise that the magazine devoted a photo spread to her rambling six-room
apartment. The place was in one of those NYU-owned buildings on the
west side of Washington Square Park, and it was definitely a knockout.
She'd played off the old classic interior, a generously proportioned thirties
layout, turning it into an environment that blended technology and design.
Not for Tam, though, the utilitarian "high-tech" look so trendy a few years
back; no ugly "state of the art" machines. It was eclectic—modernism here,
deco there.
Take her library-office. I smiled when I noticed that next to the latest
IBM PC was a "streamlined" Raymond Loewy- designed calculator, pure
thirties. Same old Tam. On the other hand, just to keep it all from getting
too serious, she also had a collection of kitschy salt and pepper shakers
scattered among the books—a dog peeing against a hydrant, a naked babe
with spicy boobs . . . she told the writer it was her "tribute to America."
The place was everything she was, a potpourri of the world, a mishmash
of styles, and she clearly loved it. I probably missed a good half of the
insider gags, this outrage up against that one, but I must say she brought it
off with appreciable elan. Truthfully the place was a perfect reflection of
the Tam I remembered—a woman who did her own thing.
She was now, so it said, a full professor at the university. Undoubtedly
she deserved it. She was also director of their new Center for Applied
Technology, which she'd founded. When the interviewer asked her which
department the Center was under, she'd apparently shrugged and said
"certain people" at the university wanted to bring it in under the School of
Business. But the Center had outside funding, was doing vital work, and she
was darn well going to stay independent.

Whoops. That ballsy crack, although perfectly in character, meant she
was now giving the back of her hand to university politics. Mouthing off in
a national publication about some departmental power play is no way to
endear yourself to college deans. It lays bare all their petty empire-building.
Didn't seem to worry her, though; just like in the old days, she said exactly
what she was thinking and let the chips tumble.
Her major occupation in recent years, as anybody who reads the op-ed
pages around the country knows, was to shame American executives into
getting off their duffs, to make them start diverting some of their executive
perks into the serious problem of getting this country competitive again.
She had plenty of ideas where the corporate-jet money could be better
invested. Over the years she'd knocked out half a dozen books on
technology and the American workplace—office automation, computer-
aided design in engineering, robots and computer-integrated manufacturing,
that kind of thing. Tam Richardson still believed America could whip the
world, but it would take more than speeches and flag waving. Her latest
expose of America's corporate fat cats, which actually got a sidebar in the
story, claimed they'd better start cutting their million-dollar salaries and
putting the money into creating American jobs, or we'd all soon end up
fetching coffee for the new Pacific Rim dynamos and buying our goodies at
East Asia's company store.
Only she didn't bother to say it that nicely. Worse than that, the book
actually supplied a long list of America's more notoriously overpaid CEOs.
I suspect there were a lot of corporate contributors to the university who'd
just as soon seen her muzzled. Good luck, Tam.
Now the coincidence. The Saturday following my Friday night episode
with the inscrutable president of Nippon, Inc., an event occurred that would
soon bring Tam Richardson back into my life. Random luck? Fate?
Anybody's guess. As it turned out, however, while I was on the phone
leaving messages at country clubs for the building's attorneys, a mere five
blocks away from my place Dr. Tamara Richardson was putting the final

touches on preparations for an evening dinner party—destined to throw us
together again only weeks later.
The dinner was supposed to be strictly social, to celebrate the beginning
of her sabbatical—academic talk for a year off with three-quarters pay.
There were a few dinner debts to square away, so the timing was perfect.
She had several articles lined up; she'd finally axed a stormy year-long
affair with a colleague in Economics named David Mason; and she was
scheduled to begin a book on intelligent robots. She was trying not to think
too much about academic politics and the real possibility her department
chairman might consign her to some kind of academic hyperspace, there to
teach freshmen for the rest of her tenured days.
By mid-afternoon she was down to the last-minute refinements on the
evening's plans. Since the overnight rain had purged the soot from the air,
she was feeling great. She put on a new Vangelis CD, worked a few
modern-dance moves into her routine as she cleared the loose books out of
the living room, and continued trying to convince herself that breaking off
with Dave Mason had been a smart move. After a while, though, she wasn't
humming anymore, just thinking. Okay, it had only been a week, but why
had she invited him to come to the dinner? Just to be a good sport?
The thing about it was, they'd actually had a more or less
unspoken understanding not to inquire too closely into each other's
occasional little diversions. They were both adults, right? This time,
however, Dave had pushed it too far. He'd finally broken the rules, bringing
one of his admiring grad students up to the apartment—her apartment. She
bumped into them coming down in the elevator, and this one was a prize—
stage makeup, bleached hair, the works.
Out of bounds. She'd nailed him right there in her marble lobby: you
want to bang some Queens debutante, you'd better not be doing it here. This
place is my home. She then told him to pack. The apartment was hers, and
she wanted all signs of him out by Monday.
Then she'd invited him back for the dinner. Why? Could Humpty-
Dumpty be put back together again? Crack eggs, make an omelet . . . she

half smiled at the odd way your mind connects absurdities when you're a
little overworked. . . .
That was when the phone rang.
Was it Dave, dropping out at the last minute to prove he could still piss
her off, one more time? She headed for the kitchen, so she could at least
chop some veggies while they argued for half an hour on the phone.
It wasn't Dave. Instead it was a scratchy old voice, one she loved.
Shouting into a cell phone at Kennedy was Allan Stern, who announced in
his staccato tones that he'd just stepped off a JAL flight fresh from some
conference in Tokyo. He had to see her tonight.
"Tonight?" When it rains, it pours, she thought. "Allan, I'd love to, but
I'm having some people in from school . . . What? . . . Well, sure, nothing
that special . . . Allan, I adore you dearly, but you wouldn't know any of the
. . . Okay, okay . . . Can you get down by eight?"
"See you then, Tamara. You're a dear."
Stern was an old, old friend, and a guy everybody in the country had
probably heard of vaguely. Any freshman in computer science could tell
you he was one of the unofficial founders of the field known as artificial
intelligence, now usually shortened to "AI." As it happened, she had
convinced him the previous spring that they ought to collaborate on a book
about the growing use of smart robots in the workplace, but for some reason
his input had never made it past the talking stage. She'd decided just to go
ahead on her own with the writing.
Well, she thought, maybe he's decided to pitch in after all. Great. That
would mean it might be adopted for a lot of college courses. Allan had
plenty of respectability with the establishment.
He was probably the closest friend she had, her mentor almost. They
went back to a Denver conference fifteen years agp, when he'd stood up in a
session and challenged the conclusion of the very first paper she ever gave,
though he'd come in midway through. Even then he had been a powerhouse
in Washington, chairing one of the technical committees that reviewed
federal grant applications submitted by university researchers. The inside

talk on campuses was: love him or hate him, but think twice before you
cross the opinionated bastard.
She was so mad she didn't care. She had sidled up to him at the coffee
break and introduced herself, saying what an honor it was to meet a scholar
so highly regarded, a man whose reputation was so well established. He
nodded in absent acknowledgment, sipped at his Styrofoam cup, and stared
over her shoulder. She then proceeded to advise the celebrated Allan Stern
that he'd missed the whole thrust of her talk, which she'd explained in the
introduction, and furthermore—judging from the data at hand—he struck
her as a pompous asshole.
Such forthrightness, which was entirely new to Dr. Allan Stern's
sheltered existence, so astonished him he apologized on the spot. By week's
end he was trying to recruit her out to Stanford. He still was.
Allan was always punctual, to the minute, and that Saturday night was
no exception. The doorman downstairs announced him at eight sharp. When
she met him at the elevator, her first impression was he looked a trifle worn
down. America's foremost futurist was gaunt, as always, but his trademark
shock of white hair streamed over a lined face that was more than usually
haggard. His hard eyes, which could bore through screw-off Congressional
staffers like a pair of Black & Decker drills, were actually bloodshot. In
short, the man looked awful. Then she remembered he'd just come in on the
747 directly from Narita. Into the teeth of the latest baggage-handlers'
slowdown at Kennedy. Give the poor old guy a break.
She made him a drink and then asked, "Okay, Allan, what's up?"
"Later, Tamara. It's a long story." With which he lapsed silent. Very out
of character.
About then everybody else started coming up, reasonably on time since
Tam was known far and wide to hate the concept of "fashionably late."
Also, she was a great cook. Bottles of bargain wine with the prices scraped
off collected on the table in the foyer, and coats amassed in the second
bedroom. Given that everybody knew everybody, it was mostly elbow
patches and open collars. Only the women had bothered to dress. Simpson

from Computer Science, whose wife worked in Admissions; Gail Wallace
from Business, whose pudgy, skirt- chasing husband had guided two
companies into bankruptcy; Alice and Herman Knight, who both taught in
Economics (she was dean of the undergraduate college) and published as a
team; Kabir Ali from Mathematics and his browbeaten little Iranian wife
Shirin who seemed frightened of the world—and her husband. Only Dave
had the nerve to be late and hold things up.
While they waited, they knocked off a little Scotch and white wine,
trashed the administration, and complained about all the committees on
which they were being pressured to serve. Around a quarter to nine Dave
finally appeared, sandy curls askew to let her know where he'd been. She
didn't even bother offering him a drink, just announced that everything was
ready so let's adjourn to the dining room.
There're two kinds of dinners: ones that follow the rules, and ones that
break them all. Tarn's were the latter. This time it would be real tallow
candles and everybody's wine, including her own. Somehow her craziness
always seemed to click; they inevitably came back for more. This time she'd
decided to pay an offhand tribute to autumn and American cuisine. Cheddar
cheese soup, marinated Ottomanelli's quail broiled with fresh sage, sweet
potato fritters and baby peas, homemade corn bread, and then, as a change
of pace (keep 'em off balance), an endive salad spiked with coriander.
Dessert was an apple- walnut casserole, washed down with pots of
McNulty's dark Haitian coffee. At the end she produced an ancient cognac
you could inhale forever. By eleven-thirty everybody thought they'd just
ascended to paradise.
She ordered Dave to take care of the dishes (since he'd
been acting as if he owned the place, let him help), then led everybody back
into the living room. In the park below the weather was perfect, and
marijuana sales were in overdrive. A couple of joints also appeared around
the room, accompanied by withering glares from Allan. Then, while Ed
Wallace was chatting up Shirin and everybody else was drinking and

smoking, Allan picked up his cognac and motioned her in the direction of
the study.
Finally, she thought. This must be some story.
She was right.
It wasn't her book he wanted to discuss. Instead, he wanted to tell her
about what he'd just seen, and not seen, in Tokyo.
"Loved dinner." He settled into a leather chair, the one next to her long
bookcase, and drained his snifter. "I was afraid I was turning into a fish over
there." He laughed, but only briefly. Social hour was over. "Tam, I wanted
to ask you if you could maybe help me out with something."
"What do you have in mind?"
"Well, you know I've always thought I was on top of what Tokyo is
doing, but now I'm not so sure anymore. I'm afraid things are starting to get
away from me."
"Such as?"
"Okay. Now, it's no secret I've been to Japan a lot. I've got my share of
friends over there, people I respect and admire very much. But this trip
started to get very strange. It's as though I'm suddenly an outsider. Just
another gaijin. I'm puzzled, and I wonder if maybe I ought to be worried."
Gaijin. That sounds familiar, she thought. But it wasn't something that
usually bothered Allan. She brushed her brown hair back out of her eyes
and studied him. He'd never been more serious.
"What happened?"
He paused. "You know about their big artificial intelligence effort, called
the Fifth Generation Project. If it goes the way they're saying, before too
much longer they'll have programs, software, to design the next generation
of computer technology. "
This was supposed to be news? Come on, Allan. Everybody knew. It was
the talk of the industry. Japan's goal was computer logic capable of
replicating human thought processes, a monumental, maybe impossible,
undertaking.

"Allan, don't you remember we discussed doing a chapter on it in the
robotics book? And if you—"
"Tamara, bear with me. You also know very well that project is Japan's
attempt to leapfrog American technology. Added together with all their
R&D on chip technology. In my opinion, by the way, our response is
definitely too little, too late. More and more we're having to buy essential
components for missile guidance systems from Japan. The Department of
Defense is already nervous, but not nervous enough. We may have dug our
own grave. And now I think our worst fears may be about to come true.
Something funny seems to be happening, only I'm not sure what."
"What do you mean?"
"Let me close that door." He got up and did so, then turned back.
"Maybe first I ought to tell you about the odd experience I had last week."
"Go on." She heard somebody in the living room put on one of her old
Beatles albums—still the middle-ager's idea of hip.
"Well, as always, I scheduled a stop at the Fifth Generation lab to get up
to speed on how their effort's doing. But all of a sudden it seems I'm too
darned famous to be bothered with the shirtsleeve stuff. I tried to get in
there for three days running. It was always the honorable Stern-san this and
the celebrated Stern-san that and you must meet the head of every damned
ministry and we have to set up this formal dinner and blah, blah, blah."
"Allan, you're the Grand Old Man these days." She laughed. "Get used to
it."
"Wash out your mouth, Tamara Richardson. I'm not grand and I'm most
decidedly not old." He sniffed. "No, it's as if they were very politely cutting
me out. Okay, they didn't exactly say the project was off-limits now or
anything, but there never seemed to be a convenient time to drop by the
lab."
"Who knows? Maybe they just didn't want some American partisan
poking about the place anymore."
"Could be. But why? I'm scarcely a spy for DOD, or the CIA. They
know I only do pure science. Okay, maybe I'm old- fashioned, but Dr.

Yoshida at least has always claimed to respect me for that. I used to spend
hours with him going over his work there and vice versa. We swapped ideas
all the time.
Now all of a sudden there's this smokescreen." He paused, sipped at his
brandy, and then leaned back. "Which brings me to that favor I need."
"What?'
"Well, I was wondering if maybe you could try and get into the Fifth
Generation lab yourself, check around a bit. See if you can find out what's
cooking."
"Go to Tokyo?"
"I realize it's a lot to ask, but who else can I turn to? Tam, you're the only
person I know who could pull this off. You know the technology, and they
respect you. Also, you understand the language. Maybe you can cut through
all the politeness and the translated PR. If you'd like a little per diem, I'll see
if I can't shake loose the money from somewhere."
"Allan, really, don't you think you're maybe going overboard just a little.
What if Dr. Yoshida was just tied up? The last time I visited the lab, he
showed me everything, completely open."
"Ho, ho." He set down his brandy, and his eyes hardened. "I still haven't
told you the clincher. There's some new guy in charge now."
"That's hard to believe. Yoshida practically invented the Fifth Generation
Project. He's the director—"
"That's just it. Kaput. All of a sudden he's not around anymore. They said
he's now 'technical adviser.' But you know what that really means.
Removed. Sayonara. Promoted upstairs or downstairs or some damn thing.
That in itself is mystifying. He's one of the most competent . . . oh, hell, the
man is a genius. Why would they do that?"
"Very strange."
"Exactly. But now he's out. Couldn't even see me. 'On vacation.' The new
director is some bureaucrat by the name of Asano. I spent a little time with
the man, and I can testify he's a smoothie. Lots of pious generalities about
'technical cooperation.' But I got the distinct feeling he didn't want to talk

details with me. Actually, I wondered if maybe he wasn't even a bit afraid to
say anything."
Asano? Oh, shit. She took a deep breath. "Was his name Kenji Asano?"
"Ken. Right, that's his first name. Maybe you know him. I think he used
to be a flunky with some government bureau
over there. But now he's just been put in charge of the Fifth Generation
work. It's more than a little curious."
She puzzled a minute. From what she knew about the Fifth Generation,
and about Kenji Asano, he had a lot more important things to do than run
the lab. The "government bureau" he worked for was none other than MITI,
the Ministry of International Trade and Industry. In fact, at last count he was
Deputy Minister for Research and Planning, a top-ranked executive slot.
Could this mean that Japan's ambitious artificial intelligence effort was
being moved in on by MITI, their industrial war room?
"Allan, I'll tell you the truth. You may not have heard, but I'm in a fight
now at the university. I expect to win, but I've got a lot on my mind. Notes
for the book. I can't just suddenly—"
"Tam, I need your help. Look, maybe they've had some new
breakthrough that none of us ever imagined." He paused. "Just between us,
I lifted a strange MITI memo I found lying around an office when Asana
took me on an escorted tour up to the labs at Tsukuba Science City."
She looked at him. "Was it classified?"
"How would I know? There was something about it. My sixth sense told
me it was a document nobody was supposed to see. When I get back to
Stanford, I plan to have a postdoc over in Physics make me a quick
translation."
It was very unlike Allan to walk off with confidential memos uninvited.
Which could only mean he must suspect something he wasn't telling.
"You'd better give me the whole story."
"Not now. Not yet. It's only guesswork, Tam." He glanced away.
"Nothing to bore you with at the moment. But if you can find out anything,
we'll write it up as a report I can circulate around the Hill. This could be

important, believe me. Already Cray has started having to buy critical chips
for its supercomputers from Japan. And while the Department of Defense is
pouring billions into research on semiconductors that will withstand nuclear
radiation, Japan is forging ahead on speed and miniaturization—what really
counts. I think they could be about to have us by the balls, pardon my
French. If they've somehow incorporated AI—"
"Allan, it doesn't add up. I once met Asano. In fact it was a couple of
years ago at that Kyoto University symposium on
Third World industrialization. He spent a lot of time trying to pick my brain
about our specialized silicon-chip manufacturing here. But he wasn't the
slightest bit interested in artificial intelligence."
"Well, prepare yourself for a surprise. He's plenty interested now. And
knowledgeable. But still, it's not like the Japanese to do something like this,
install some government guy to run an R&D program."
"That's certainly true." She strolled over, looked down upon the park,
and began to want a brandy of her own as she chewed over the implications.
Was MITI setting up some new high-tech industrial assault? If the Fifth
Generation had been taken over by Kenji and his planners . . . "Allan, let
me think about this for a couple of days."
"Don't think too long. I'm convinced somebody over there is suddenly in
a very big hurry. I need to find out the real story. Am I just starting to go
nuts in my old age? . . . Well, make that my prime." He grasped her hand for
emphasis. "And you really should make it a point to see this Asano fellow.
If you already know him from somewhere, I'd say that's even better."
She started to respond, then stopped. She knew Kenji Asano all right.
From a little episode at that conference, when he had invited the panel
members of a session he chaired to a late-night tour of the endless tiny bars
in Kyoto's Gion district. She remembered all the steaming sake and being
ignored by flustered bar girls who were pretending that another woman
wasn't around. They had no idea what to do about a member of their own
sex there in their sanctuary of male flattery. Ken apparently had staged it
mainly to watch their reaction, and hers.

Part of the scene was that Ken Asano was actually something of a hunk,
as Westernized as they come and attractive in that way seemingly reserved
for men of great wealth or great power. He may have had both, but she was
sure only about the second. Whenever he handed out that meishi card with
the MITI logo, even millionaire industrialists and bankers automatically
bowed to the floor.
A lot of sake later, after the other panel members had piled into a cab for
their hotel, she decided to show Kenji Asano a few things about women he
wouldn't learn from giggling bar girls. She'd always heard that Japanese
men were pretty humdrum in bed, quick and self-centered, at least in the
opinion of a woman she knew who'd done exhaustive field research on the
topic. After her own experience with Ken, though, she wasn't so sure. Still,
it had been a passing thing. The next morning she awoke in her own room
in the Kyoto International and half tried to tell herself it hadn't really
happened—just a dream, a chimera of the sultry Kyoto night, brought on by
all those quaint little side streets and red paper lanterns.
The truth was she still thought about him from time to time. He was a
talented lover, she certainly recalled that part well enough, and he was a
charmer. In fact, she could use a little of that charm right this minute.
What she didn't admire was the organization he worked for: the
infamous MITI. Behind a smokescreen of "fair trade" rhetoric, MITI's
intentions clearly were to extinguish systematically Japan's world
competition, industry by industry. And so far they were batting a thousand.
They'd never once failed to knock off a designated "target." What was next?
Had MITI finally concluded that, down the road, intelligent computers
could be the drive behind some massive shift in world power?
Maybe she should go.
She poured another dash of cognac for Allan, and they wandered back
into the living room, just in time to see the Simpsons out. Everybody else
followed except for Dave, now perched by the windows and glaring out into
the dark. She decided to ignore him as she walked over, opened one a crack,
and looked down. In the park below, commerce was tapering off and the

Jamaican Rastas had begun toting up receipts for the night. No sounds,
except the faint strains of reggae from a boom box.
Funny, but every once in a while she'd stop everything and watch the
kids in the playground down there. What to do? The damned shadows were
growing longer by the minute. Maybe Dave wasn't so bad. Trouble was, he
needed mothering too.
Think about it tomorrow, Scarlet. She sighed, poured herself a cognac,
and headed for the bedroom to get Allan's coat.
After she'd put him on the elevator, she came back and checked out
Dave, now slouched in the big chair by the lamp, his eyes closed. He looked
positively enticing, and she sounded his name quietly. Nothing. Then she
realized he was sound asleep. Snoring.
The bastard. This was it. She grabbed his coat, pushed him out the door,
poured herself another cognac, and plopped down in the living room to
think.
All right, Allan. You've got a deal. Could be you're on to something. I
seem to remember there's a conference in Kyoto starting week after next on
supercomputers. Kenji Asano will probably show. Good time to catch him
off guard and try to find out what's suddenly so hush-hush.
Yes, by God, I'll do it.
She didn't bother with any of Allan Stern's funding. This trip would be
strictly off-the-record. She wrapped up some loose ends, called a few
people she knew in Tokyo, lined up half a dozen interviews that might be
helpful on the new book, packed her toothbrush and tape recorder, and
boarded a Northwest flight for Narita.
She had no idea then, of course, but she was Alice, dropping down the
rabbit hole. A fortnight later she was dining with the Emperor of Japan.

CHAPTER FOUR

Allan Stem's alarm about Japan's semiconductor challenge reflected only
part of the picture. There was also plenty going on with Japanese research
in addition to information processing. Superconductivity was getting a big
push, as was biotechnology, optoelectronics, advanced materials. Although
we in the West think of Japan as a newcomer in the high-tech sweepstakes,
it actually has a long tradition of innovation. A typical for-instance: in the
area of advanced materials those of us hooked on swords know the
Japanese were already creating "new materials" hundreds of years ago that
still haven't been bettered. Back then it was flawless steel for katana blades;
today it's, say, gallium arsenide crystals for laser-driven semiconductors.
How, one might inquire, did all this expertise come about?
To stick to materials research, if you think a moment you realize it's a
discipline that actually must have begun in the latter days of the Stone Age.
"High technology" in those times meant figuring new ways to use fire and
clay to create something nature had neglected to provide. Not integrated
circuits, but a decent water pot.
And the Japanese have been making terrific pots for a thousand years. As
it happens, some historians claim the very first Japanese pottery was made
in the province of Tamba, near Kyoto. Why mention this? Because, then as

now, technology and politics had a way of getting mixed together in Japan,
and Tamba was a perfect example. Tamba's artisans made great use of a
special oven known as a climbing-chambered kiln. Whereas ceramics kilns
elsewhere in the country were narrow and high, Tamba's climbing-hill
chambers were wide and low, thereby allowing the fire to touch the clay
directly. The result was a rugged, flame-seared stoneware that pleased the
manly eye—powerful earthy grays, burnt reds, greenish-browns, all with a
hard metallic luster. Thus Tamba was a locale much frequented by the
warrior shoguns.
Which may be why Tamba province has another claim to history as well.
It is the location of the one-time warrior castle- fortress of Sasayama, once
a regional command post of the Tokugawa strongmen in Tokyo. You won't
find overly much about Sasayama in the usual guidebooks, since it has the
kind of history that's more interesting to Japanese than to tourists. The place
has no gaudy vermilion temples, no bronze Buddhas ten stories high. Fact
is, very little remains of the fortress itself these days except for a wide
moat, green with lotuses, and a few stone walls lined with cherry trees that
blossom an exquisite white for a few breathtaking moments each spring.
Although the castle is now burned down, a few homes of the samurai
retainers of its various warlords remain. If you stand on the rocky edge of
the moat at its southwest corner and look down through the cherry trees,
you'll see an old-style house built some two hundred years ago by the
twelfth daimyo of Sasayama for his most loyal retainer. Its walls of white
plaster are interspersed with beams of dark wood, its thatch roof supported
by the traditional ridgepole. Think of it as the home of the samurai most
trusted, the guardian of the gates, the warrior nearest the fount of power.
Perhaps it will not seem surprising, therefore, that this ancient samurai
residence, in the shogun stronghold closest to ancient Kyoto, was now
home base for a powerful warrior of modern Japan. Matsuo Noda.
Samurai had once battled in Sasayama's streets; many's the time its castle
had been stormed by raging armies; much blood had been shed and much
honor lost. But the event that occurred in Sasayama precisely two weeks

after Tamara Richardson's dinner in New York was a historical moment
more important than any in its thousand years prior.
It began shortly after dawn, a cool September gray just ripening to pink
over the mountains. The early sounds of morning—birdsong, the faint bell
of the tofu seller, the steam whistle of the autumn sweet-potato vendor—
were only beginning to intrude on the quiet. Noda was where he always was
at this moment: on the veranda overlooking his personal garden, a classic
Zen-style landscape whose central pond was circled by natural-appearing
rocks, trees, bushes, paths. It was, of course, about as "natural" as those
sculptured hedges at Versailles. In order to create the illusion of perspective
and depth, the stones along the foreshore of the pond were bold, rugged,
massively detailed, while those on the opposite side were dark, small,
smooth—a little trick to make them seem farther away than they were.
It's a game heavy with nuance. For example, the stone footpath on the
left side of the pond may look as if it goes on forever, but that's just part of
the art: the stones get smaller toward the back, curving in and out among
the azalea bushes till they make one last twist and disappear among the red
pines and maples at the rear. Which trees, incidentally, have themselves
been slightly dwarfed, again enhancing the illusion of distance, just as the
back is deliberately shaggy and dark, like the beginnings of a forest that
goes on for miles.
Noda's Zen garden, which deludes rational judgment by manipulating all
the signposts we use to gauge distance and space, appeared to be limitless.
The secret was that nothing actually ends: everything simply fades out and
gets lost. It was a closed space that seemed for all the world as if it went on
and on if you could only somehow see the rest of it. Yet peek only a few
yards away, and you've got the mundane streets of sleepy Sasayama.
This special dawn, as a few frogs along the edge of the
pond croaked into the brisk air, he knelt on the viewing veranda in a fine
cotton morning robe, a yukata emblazoned with his family crest (an archaic
Chinese ideogram meaning "courage") and began to center his mind. He'd
left his Kyoto headquarters early Friday evening, skipping the usual after-

hours-drinking obligation of Japanese executives and grabbing the eight-
thirty San-in Express to Sonobe, where his limo waited to bring him the rest
of the way home. Now he was up before daybreak and readying his usual
morning ritual. As he sat there, gazing across the placid water dotted with
lotuses at the foreshore and framed with willows at the far horizon, his
silver hair contrasted with the marine blue of the robe to create a presence
easily as striking as the garden itself.
For a time he merely knelt, silently contemplating the view and listening
to the metrical drip of water from a bamboo spout situated just at the edge
of the steps. Finally he turned and picked up his sumi stick, a block of dried
ink made from soot, and carefully began to rub it against the concave face
of an ancient inkstone, till its cupped water darkened to just the proper
shade. When the fresh ink was ready, he wet a brush in a separate water
vessel, dried it by stroking it against a scrap of old paper, dipped it into the
dark liquid, and looked down.
This was the moment that demanded perfect composure, absolute
control. Before him was a single sheet of rice paper, purest white, and now
his hand held the brush poised. He was waiting for that instant when his
senses clicked into alignment, when the feel of the brush merged with his
mind, much the way a samurai's katana blade must become an extension of
his own reflexes.
Although he would stroke only a few kanji characters, scarcely enough
for a telex or a memo, the moment required discipline acquired through
decades of practice. His Zen-style calligraphy allowed for no hesitation, no
retouching. It must be dashed off with a spontaneity that was, in itself, part
of the art. As with the swordsman, there could be no time for conscious
thought, merely the powerful stroke guided by intuition. No decision that
confronted him throughout a business day would demand half so much
mental control, inner resolve.
Just then, at the far end of the pond, the first sun flickered through the
wisteria. Suddenly, without his consciously knowing the exact moment had

arrived, as a Zen archer's arrow must release itself of its own will, his hand
struck. The dark tip of
the brush pirouetted down the paper, starting at the left and laying down a
mere five lines, twenty-two syllables.

Inishie ni
Once held,
ari kemu hito no
it’s said,
moteri cho
by men of long ago,
omitsuwa wo
my ancient prize--
ware wa mochitari
at last is near!

It was done.
He sighed, leaned back, and reached for the cup of green tea that rested
beside him on the polished boards. The verse was in an archaic style, a few
syllables longer than a haiku, modeled on an eight-hundred-year-old work
by a court poet of the Heian era. The strokes were perfectly nuanced, the
flow of the brush precise, the intuitive strength as natural as a waterfall.
Noda drained his tea, then rose to go back inside. His antique house was
tastefully "empty": its tatami-floored rooms, measured in multiples of those
standard three-by-six reed mats, were barren, a museum to times past. They
also were open to each other, their sliding doors, fusuma, being pushed
wide. The walls, too, were vacant expanses of white plaster with only an
occasional mounted six-fold screen depicting poetry parties of the Heian
era, that courtly civilization portrayed in The Tale of Genji. And there were
no overhead lights, merely an occasional cypress andon floor lamp to
augment the pastel glow of the rice-paper shop windows.

"Asa-han." He curtly ordered his gray-haired cook to bring breakfast,
then turned to mount the ancient stairs.
"Hai." She nodded and was gone.
Although he kept the lower floor exactly as it had been two centuries
past, the upstairs was a different matter entirely. It had been converted into
a high-tech office, hooked through a maximum security TeleSystems TCS-
9000 direct uplink (via the mid-Pacific Mareks-B satellite) to the
mainframe of his new NEC information management system in the Kyoto
headquarters, an augmented NEAX 2400 IMS, which handled voice, data,
text, image. He had scarcely flipped on the system when the woman who
managed his kitchen appeared, bowing, and deposited a tray bearing miso
broth, rice, an uncooked egg, and more tea.
He grunted thanks as he was checking a CRT screen for the current rate
on Fed funds, the cost of the money American banks lend each other
overnight to meet reserve requirements. No surprises. Then he turned and
cracked the egg over his rice, adding a leaf of dried nori seaweed. As he
leaned back, chopsticks in hand, he quickly glanced through the Tokyo
papers, followed by The Asian Wall Street Journal and the satellite edition
of London's Financial Times. Finally he tossed them aside.
This was always the moment when he liked to take measure of the three
photos standing in a row across the back of his teak desk. The first was his
deceased wife Mariko—long-suffering, deferential, resignedly selfless. A
model Japanese woman. He still thought of her with fondness, but as was
expected of a Japanese helpmate, she always ran a distant second in his
affections. His work came first.
The next picture was very different. This woman's face was white, her
hair a lacquered wig, her lips a tiny red pout. Her name, Koriko, had been
assigned years ago in the Gion district of Kyoto, and she was holding a
three-stringed lute, a samisen, and intoning some classical melody from
centuries past. These days she purchased thousand-dollar kimonos the way
most office girls bought jeans, but she worked for the money. She was a
geisha, a real one, an artist whose calling required years of training and
commanded the awe of even the most modern Japanese. Like a prizefighter

or a matador, she'd spent long painful hours perfecting style, technique, art.
She had been Noda's one-time protégée, beneficiary of his patronage. Now,
though, she had other "patrons." He still missed her, but the memory was
fading.
The third photo was a face familiar to all of Japan's avid TV viewers—
Akira Mori. She was wearing a dark blue Western suit, her hair a glossy
pageboy cut, the conservative look of times past. It was the occasion of her
graduation from the School of Law, Tokyo University (Tokyo Daigaku, or
Todai as it's known), an important moment. Todai's alumni represent a
network, a batsu, of the country's ruling elite, who compete with each other
for the choicest, most prestigious government ministries. Although she had
chosen a more visible career, she still relied heavily on her contacts in this
governing clique, heads of the leading ministries, including Finance,
Foreign Affairs, and of course the Ministry of International Trade and
Industry, MITI.
Matsuo Noda himself had, in fact, once headed MITI, probably Japan's
most powerful ministry. He came from ancient samurai stock—fittingly
perhaps, since the bureaucrats of modern Japan are mostly of that class. The
samurai caste, men who served a liege lord and were forbidden to engage in
trade, were actually Japan's first public servants. In between civil wars they
became sword-carrying bureaucrats. Many a modern bureau chief has
ancestors who wore two swords and sliced up a peasant or a merchant now
and then with impunity, which may help explain why the average citizen
still views government officials with such nervous awe.
A Todai honors man himself, Noda was a natural for MITI, which runs
what is in many ways a covert operation. The head offices are in a
nondescript, soot-covered building of tinted glass and limestone near
Tokyo's Hibaya Park, guarded by armed, helmeted members of Japan's
National Police. Inside it's mostly open floors and lines of gray steel desks;
no plush carpets and mahogany suites. MITI has twelve bureaus, each
devoted to a major industrial sector. If its officials decide Japan's strategic
interests would be served by a certain manufacturing group's cutting

production, lowering prices, altering product lines, these
"recommendations" are passed along. And it happens.
Noda began his career there by circulating through the different sections,
"going around the track" as it's called, after which he proceeded to run the
General Affairs office of various bureaus, by which time everybody had
him picked for a mover, on the "elite course." Eventually he was promoted
to section chief in the International Trade Bureau, next on to bureau chief,
and finally at age forty-seven he made the top. Vice minister.
After he reached the pinnacle, he held the job for a mere five years, then
routinely left. He had to go; early fifties and you're out. MITI is no country
for old men. He moved on to head the Japan Development Bank, JDB,
where he financed various high-tech start-up industries. Finally he retired
and went out on his own.
Unlike most other retired government officials, however, he didn't accept
any of the lucrative private offers he received, the suddenly "vacant" spot
on a conglomerate's board of directors. No, he had his own smoldering
vision. In a dazzling and successful departure from usual Japanese
convention, he
founded Nippon, Inc., an adjunct to Japan's major financial players, with
headquarters in the commercial center of Kyoto. His new organization
immediately became a financial fixture in the new postindustrial, high-tech
Japan, and now, five years later, Nippon, Inc. was a thriving force in the
management of capital. These days even the new generation at MITI
routinely called him up for "consensus."
For Matsuo Noda now, everything was in place; he was at last ready to
pursue a lifelong dream. He'd never forgotten the end of the war, that last
day on Okinawa when Ushijima's 32nd Army was a dazed remnant. He'd
been in the cave above Mabuni when the general radioed his farewell to
Imperial Headquarters, then severed his own spinal cord. Matsuo Noda,
with anguish he could still remember, had burned the regimental flag and
told those remaining to scatter, to become guerrillas—repeating Ushijima's
last command to "fight to the last for the eternal cause of loyalty to the

emperor." Noda had declared that their struggle would continue on for a
hundred years if need be.
He had overestimated the difficulty. The plan now poised had required
less than fifty.
As usual for a work-at-home Saturday (just another business day in
Japan), he was wrapping up loose ends from the week, finishing reports,
signing off on audits. Two printers were running, since he preferred to work
with hard copy, and he was reviewing the list of outstanding loans NI was
in charge of monitoring, checking for any early signs of trouble. Had any
credit ratings slipped? If a receiving corporation was publicly traded, had its
stock faltered? What was the overview: securities, un-amortized discounts
on bonds, cash on hand? Next he paged through the weekly updates from
the Small Business Finance Corp., the National Finance Corp., the Shoko
Chukin Bank, various credit associations and savings banks. It was all on
his Kyoto information base, pulled off the new fiber-optic network that
linked Japan's financial centers.
He was about to ring down for fresh tea when a priority override flashed
on the screen for his eyes only. This meant a coded message that could only
be unscrambled using a special module in the computer. The Kyoto office
knew he was on line, but they hadn't wanted to route the information
directly.
Highly irregular.
He punched in the code, called up the receiving routine, and waited for
the message.
There had been a call from ship-to-shore phone, the communications line
linking him directly with Dr. Shozo Takahashi, director-in-charge of his top
secret "project" in the Inland Sea. The director was requesting that Noda-
sama contact him immediately via scrambler. Top security. He felt his pulse
begin to race as he digested the news.
It had been so easy. Almost too easy.
He sat perfectly still for that timeless, historic moment, gazing at the
photograph of Akira Mori. A promise kept, from long, long ago. Four

decades now, and he had never forgotten what he had said he would do for
her.
He called down for tea, waited till it had been delivered, then punched
on the phone and switched it to the security mode.
But even on the scrambler, Takahashi began circumspectly. As the
esteemed Noda-sama was aware, their "project" had, over its three years,
contended with great difficulties and many disappointments. They were
working at the very limits of undersea technology. As Noda-sama also
knew, he went on, their early attempts at seismic vertical profiling had been
a complete failure. Takahashi took personal responsibility for that. Next
they had changed strategy and utilized state-of-the-art microwave radar,
hoping that minuscule changes in density along the bottom might indicate
what they sought. That too, Takahashi apologized, had been unproductive
from the start as Noda-sama had been informed, and he, Takahashi, took
full blame for the failure.
Noda cut in at that point, impatient and wanting to circumvent the litany
of apologies. Why was Takahashi calling?
The director paused dramatically, then declared he wished to inform the
august Noda-sama that their latest approach, the use of a new digital
magnetometer, had at last borne fruit. Only this morning they had detected
and brought up an "item." In the treacherous straits east-northeast of
Shikoku. It was a water-tight gold case embossed with what appeared to be
a sixteen-leaf chrysanthemum or kiku. The imperial insignia.
Other confirming inscriptions? Noda nervously reached out and clicked
off the humming computer.
Yes, the formal script across one end appeared to be no later than tenth
century. Although they dared not open the gold case for fear of damaging its
contents, at this moment preliminary analytical procedures were underway
and the early results, including a makeshift attempt at shipboard X-ray
crystallography, suggested that the steel inside, which clearly showed traces
of copper alloy, contained less than a hundredth of one percent of iron
oxide. In short, it was possible the "item" might be perfectly preserved.

It was theirs, Takahashi said, in that breathy, clipped language inferiors
use to signify great importance and great deference. It was his extreme
honor to announce to the esteemed Noda-sama that the most important
archeological find in the history of Japan now belonged to Nippon, Inc., and
they—
"Chigau," Noda cut him off, in the curt tone expected of superiors.
Incorrect: it belonged to its rightful owner and would now be returned.
And furthermore, he added, Nippon, Inc. had just ceased to exist. Since
the name for ancient Japan was Dai Nippon, "Great Japan," as of this
moment Nippon, Inc. had just become Dai Nippon, International. A
complete reorganization would begin immediately.
Finally he ordered a total blackout. Radios silenced. No shore leave for
crew or scientists.
He clicked off the phone and repressing a tremble, descended the stairs.
And there on the garden veranda, using a new brush and perfumed sumi
ink from his rare collection, Matsuo Noda composed a very elaborate letter,
long swirls of black down a perfect sheet of thick, flowered paper hundreds
of years old. It was then sealed in a silver case and hand delivered by
special messenger to a fortress in, the center of Tokyo.
Five days later its recipient read it before a nationally televised press
conference, and Japan exploded.

CHAPTER FIVE

"Kami wo araitai no desu ga. Ii desu ka?” Tam peered through the
doorway and nodded hello to the girl in the blue Imperial Hotel uniform.
The hair salon was almost empty. Perfect.
"Hai, so." The girl, startled at the gaijin’s accentless Japanese, bowed to
the waist. "Dozo."
"Manikyua mo onegai shimasu." What the heck, Tam thought, why not
go all the way, get a manicure too.
"Hai. Dozo." Another bob as the girl ushered her forward.
There was the plush, padded chair. Big, gray, and voluptuous. She sighed
and settled back. Heaven. Perfect peace in the middle of hectic Tokyo. She
knew that here for an hour or so she would be an honored guest, smothered
with attention. One of the most incredible experiences in Japan.
While three of the girls began shampooing her hair, they went back to
chattering about the new husband a matchmaker had just arranged for the
petite assistant in the back. The bride-to-be was blushing and there were
plenty of giggles all around, hands over mouths. Tam realized, though, that
the girls were being a little circumspect. Who was this strange brunette
gaijin, speaking Japanese with no accent. Maybe she understood what they
were saying.
She did.
The woman who would become Tam Richardson was born Tamara no-
name in Kobe, Japan, the somewhat embarrassing result of an evening's
diversion for an anonymous GI. Her mother, equally anonymous, had
prudently given her over for adoption rather than face the social
awkwardness of raising a fatherless, half gaijin child.
She was eventually adopted by Lieutenant Colonel Avery Richardson,
U.S. Air Force, and his wife Mary, proud Iowa
stock, six years after she'd been stuck in the orphanage. That was during the
latter days of the Occupation, but they'd stayed on in Japan through '54

while Lieutenant Colonel Richardson served as adviser for the rearming of
what would be the Japanese Self Defense Forces. He'd also become a
Japanophile by then, so he left her in a Japanese school rather than
subjecting her to the "army brats" on the base. Finally they returned to the
States, with a dark-eyed little daughter who'd spoken Japanese for almost a
decade and being the achiever she was, read it virtually as well as a high-
school graduate.
The thing she remembered best from all those years, though, was one
word. Gaijin. It wasn't exactly that the modern Japanese consider gaijin
inferior. They no longer dismiss Westerners as "red-bearded Barbarians."
No, gaijin were merely unfortunate, luckless folk not part of the earth's
elect tribe. You were either born a part of Japan, a full nihon-jin, or you
were forever outside of it, gaijin.
But knowing it was one thing, and living it as a kid was something else.
She wasn't one of them, and they made sure she got the message. Finally,
however, she discovered the hidden secret of Japan. Most Japanese get very
uncomfortable around a gaijin too fluent in their language or customs, since
that outsider has penetrated their life without the constraint of relationships
and obligations. No gaijin can ever entirely belong to their seamless culture
for one simple reason: no outsider could ever be held accountable to the
powerful social and family interdependencies that allow a population half
that of the U.S. to get along in a place functionally smaller than California.
So to survive there if you're not nihon-jin, you just play that fact for all it's
worth. Then, like everybody else, you've got a niche; yours merely happens
to be outside the system. As an almost-nihon-jin you're threatening; as a
gaijin, you're safe. She'd finally learned this the hard way, from all those
unsmiling little girls in blue school uniforms who used to hiss "gaijin." But
thanks to them, Tam Richardson learned to be a permanent outsider. And a
survivor.
Well, here she was again, ready for another bout. Round- eyed "Tama-
chan" all grown up and still on the outside.

Though she knew Tokyo well from times past, she was still trying to
readjust. After checking into the Imperial Hotel in Tokyo's Hibiya section,
she'd showered, changed, and headed out for some jogging—the best way
she knew to see a lot of the
city quick. Her major puzzle: where to look for the new impulse behind
Japan's big drive, their meteoric move toward the target of dai ichi,
"number one" in the world. Try to feel the vibes, she told herself, be a
tourist and see the "New Japan" through fresh eyes. If it had been winter,
she'd have gone straight over to Shinobazu Pond in Ueno Park to watch the
migratory Siberian waterfowl diving for fish among the clumps of floating
ice. In spring she would have first monitored the radio to find out which
park had the finest cherry blossoms, then gone somewhere else to avoid the
sake-swilling crowds. And if it had been summer, she probably would have
headed for the cool of the Imperial Palace East Gardens to catch the pink
and red azaleas.
Autumn, though, was a time for swallowing the city whole. She started
with the Meiji Shrine, that garish tribute to Japan's Westernization, then
moved on to the Imperial Palace, itself a place that, like Tokyo itself, had
something for all seasons. She passed through the East Gardens watching
provincial honey- mooners snapping pictures for the parents back home,
then worked her way across toward the Sakuradamon Gate so she could
follow the Palace moat as she made her circuit back to the hotel. Along the
way she passed the Diet Building and the Supreme Court, then decided to
look in on the Yasukuni Shrine, buried in its own exquisite grove of cherry
trees and mixed foliage. The massive bronze torii arch leading into the
shrine was always surrounded by stalls selling those marvelous little rice
cakes, sweet and leaden, she remembered as a kid. She stopped and bought
two.
By then she was experiencing advanced jet lag, so she decided to head
on back to her crisp-sheeted bed at the Imperial. Tokyo this time around
was as impossible as always, maybe more so. Where do you start? The
garish Ginza, the self-conscious trendiness of Roppongi, the skyscrapers of

Shinjuku, solemn Marunouchi—all of it engulfing, awesomely
materialistic. Each trip the city seemed to get bigger, louder, more
everything. More cars, more neon, more . . . yes, more money. She could
remember, almost, a time when this town was a burned-out ruin. Now . . .
She needed some time to think, to work out a game plan. Sure, clues to
the phenomenon of modern Japan were everywhere—drive, self-
confidence, competence—but how did they fit together? Change was
coming like an avalanche. Who could keep track?
The best thing, she'd told herself, was to start with a clear head. Back off
for a while. After all, the last year had been much toil and little play, with
the latest book coming out, hassles at the university. She needed some
unwinding. Maybe a little time spent thinking about nothing would be best
of all.
So for a day she lived off room service, immersed herself in the local
papers, magazines, TV, and just relaxed. She let Allan's hints about some
ominous new development slip way down the scale.
One of the things she couldn't help noticing, though, was an odd stirring
in the newspapers, something very much between the lines but all the more
real for that very reason. In typical fashion, signals were going out that a
major event was in store. The government, she knew, always used a kind of
early-warning system for important shifts. Very Japanese. If the Bank of
Japan was about to raise or lower interest rates, a move that would impact
thousands of businesses and banks, for days in advance various unidentified
"officials" would be quoted as speculating that maybe a change in rates
might be possible. Of course they didn't actually say it was going to happen;
they merely hinted it could be an idea to consider, it was plausible,
conditions might well warrant . . . Anybody with any sense knew
immediately this meant the decision was already made and citizens were
being alerted to cover themselves posthaste.
Consequently, if "government sources" start hinting an event is
conceivably possible, you can usually assume it's as good as fact.

But what was this about, she wondered, all these allusions to a new
"interest" of the Emperor's? The standard elements were all there: leaks,
guesswork, columns, unnamed "high sources." No doubt, something major
was pending. And just to make sure nobody missed the importance of
whatever it was, there was even speculation His Majesty might actually
hold a press briefing.
That last possibility, she decided, was clearly farfetched. Just not done. A
picture session, maybe, but that was it.
After a day of unwinding, she was ready to get out and start gathering
some information. This time around, however, she wanted a different
image. A shift from the staid-professor look to high-tech Japan. Start with a
few clothes, something smashing/expensive/designer Japanese. And the
hair. Right. A cut, a different style, a something.
Thus around noon the third day she finally got into street clothes and
headed down to the lobby, then teeming with lagged-out Aussies in funny
tour hats. She took one look, ducked around them, then made for the lower
arcade and the shops.
And here she was. Already feeling recharged. Relaxed and …
Just then a short, excited hotel porter ducked his head in, bowed, and
announced he'd just heard that the Emperor was about to be on TV.
His Majesty? The salon froze.
At first Tam thought the porter must just be playing some kind of local
prank. Arcade high jinks.
Then she remembered the speculation in the papers. Could it be true?
She glanced at her watch; it was a couple of minutes before twelve.
The girls immediately dropped everything and clicked on the big
Toshiba digital set suspended over the mirror. Service halted in midstream,
just as in a soba noodle shop when the sumo wrestlers on the corner tube
had finished glaring, thrown salt three times, and were ready to lunge. Then
one of the hairdressers remembered Tam and—maybe still believing no
gaijin could understand her language—reached down to snap on the small

black-and-white Sony attached to the chair arm, tuned to CNN's Tokyo
service. It was currently scrolling temperatures in the U.S.
Now on the big Toshiba overhead, NHK (the government channel) was
announcing they were about to switch to a remote broadcast, live, from the
sacred Yasukuni Shrine.
Uh, oh, she thought. Yasukuni! Has everybody here gone crazy?
Back before 1945, Yasukuni had been a memorial to the "master race,"
official home of the new "State Shinto." Japan's militarists had revised
traditional Shinto, a simple nature- reverence, to include violent
nationalism, emperor worship, "the Yamato spirit," the "way of the
samurai": every warlike aspect of national character. These days Yasukuni
enshrined the names of Japan's two million heroic war dead, a roll call
recently enlarged to include Tojo and others the U.S. later executed as
criminals—which had turned the place into a political hot potato, resulting
in an enormous flap when the prime minister tried to appear there in his
official capacity. So, for the Emperor to show up suddenly, with heavy press
coverage, was almost unthinkable. Besides, she'd just been by the place and
hadn't noticed anything. This was very sudden.
Then the remote came on. The front of the shrine was roped off, right
across the bronze torii gate, with only cameras and press allowed inside. On
screen was a shot of an elaborate new dais where an official from the
Imperial Household Agency, the government bureau that kept His Majesty
under its care and schedules his appearances, was just finishing up a long-
winded introduction. Then it was the prime minister's turn. After what
seemed half an hour of absolutely content-less oratory (a Japanese
politician's most respected skill) on the subject of the country's majestic
Imperial past, the PM finally stepped aside to allow a tall, strikingly
handsome Japanese man to approach the speaker's podium. Since the
occasion had official significance, his walk was ceremonial, with his feet
wide apart in the jerky samurai swagger necessitated in days of old by the
two swords at the waist. Meanwhile, everybody around him was bowing
low.

His Imperial Majesty, wearing a formal male kimono, equivalent to
morning dress at Ascot, looked truly august. He was also carrying a long
silver box, filigreed.
When he finally started to speak, the girls around Tam gasped in
astonishment. She noticed immediately that he wasn't using modern
Japanese. Instead, his language was an archaic, highly ornate dialect: the
court speech of long ago.
After his brief, almost unintelligible prologue, one of the Household
officials opened the box for him and took out a long, scrolled document.
The cameras did a quick close-up, showing a page of antique, flowered
paper inscribed with brush and sumi ink.
It turned out to be a letter in modern Japanese from the president of a
financial organization called Dai Nippon, International. As the Emperor
read it to the cameras, it began with a recounting of the loss of the Imperial
sword in the Inland Sea during the 1185 battle of Dan-no-ura. That sword, it
declared, signified Japan's physical link to a Divine past. . . .
What? History 101 on TV?
Then came the bomb.
Abruptly CNN cut into their normal late-night programming for a live
satellite report. Their reporter, grasping a mike and standing in front of the
milling mob around the podium, was reading from a press handout that
provided an English summary of the letter. Since the CNN signal was being
flashed to the U.S. and then back to Japan on the "bird," effectively circling
the globe, it was a few milliseconds behind the NHK broadcast. She turned
up the sound.

. . . noon here in Tokyo, and at this shrine sacred to all Japanese, His
Majesty, the Emperor of Japan (Cut to shot of the Emperor speaking.
Reporter voice-over.) has startled the nation by announcing that marine
archeologists working for an investment organization called Dai Nippon,
International have just succeeded in recovering a famous symbol of
early Imperial rule. A three-year secret project in the Inland Sea, funded

by DNI, culminated five days ago when scientists brought up a
watertight gold case containing what is believed to be the original
Imperial sword. (Cut back to reporter.) Although no photos of the sword
have as yet been released, we are told it is in virtually mint condition.
(Glances down to read from press release.) According to the ancient
Japanese chronicles, this sword was given to Japan's first emperor by
the Sun Goddess Amaterasu-Omikami, sometime around the year 600
B.C., as a symbol of his divinity. Historians say it was later lost at sea in
the 1185 Battle of Dan-no-ura. That bloody naval episode, the subject of
much Japanese lore and tradition, marked the end of direct Imperial
authority here and the rise of the first shoguns, military governors who
would rule in his name. . . .

She rolled down the sound. Who needed some English press summary?
She was watching the whole incredible event live as it unfolded. And her
first thought was: Good God, that's like finding Excalibur, or maybe the Ark
of the Covenant. Myth turned into reality. She glanced around the salon,
and already the electricity in the air was crackling. But what happened next
turned out to be the real news, the hidden agenda.
After His Majesty finished reading the letter, he passed it
to an underling and switched back to his ancient dialect. Now, though, his
speech was being "translated" across the bottom of the screen into modern
Japanese.
He declared that since the Imperial Household, through the loyal
services of Dai Nippon, International, had had restored to it that which it
always possessed, namely the sword, he was pleased to honor the firm by
allowing it to construct a new museum to house the sacred symbol at a site
just outside Ise, home of the official shrine of the Sun Goddess. On his
authority, ground-breaking for the museum would begin immediately.
However, until such time as it was constructed and consecrated, the
Imperial Household would make the sacred relic available under heavy
guard for viewing by the Japanese people in a temporary showplace located
at the Meiji Shrine in Tokyo. . . .

By now shops had begun closing and the corridor outside was in tumult.
An excited young clerk from the flower stall next door burst through the
door and, bowing to everybody, lavished bouquets on all the girls. From the
streets above came a cacophony of sirens.
But it still wasn't over. The most crucial part of all, totally missed by the
Western news force, was yet to come. After His Majesty was bowed away
from the microphone, another official stepped forward to elaborate on the
Emperor's remarks (probably because His Majesty would not deign to
mention anything so crass as money). As reward for restoring the sword to
His Majesty, he said, Dai Nippon would be allowed to serve as trustee of an
official, honorary investment instrument, to be known as the Eight-
Hundred-Year Fund. Acting for His Majesty, DNI would direct those
monies into endeavors "commensurate with the nobility and ancient lineage
of the Japanese people, as symbolized by the sword." Then a telephone
number flashed across the bottom of the screen. The current subscription
would be closed after eight hundred billion yen were pledged. The president
of Dai Nippon had asked His Majesty for the honor of contributing the first
billion yen personally. Finally, in a quick aside, he added that interest paid
by the fund would of course be tax-free, as was normally the case for
savings accounts in Japan.
After a few closing formalities, interspersed with a photo session of the
Emperor and the president of Dai Nippon, the historic occasion ended with
a reverential shot of His Majesty being escorted to his limo.
Who was that silver-haired executive, Tarn wondered. The man was
audacious, and a genius. He'd just turned the Imperial Household into an
accomplice in some kind of nationwide collection, using the Emperor for
his own ends much the way shoguns of old had done.
But she sensed he'd touched a nerve that went very deep. A fund in honor
of the Emperor (that's already how everybody around her in the shop was
describing it), something in which to take pride, not just a numbered
savings account at the post office. Suddenly the girls and their Japanese

customers were all talking money. Here was something they could do to
show their regard for His Majesty.
A line was already forming at the phone. The way she heard sums being
pledged, she calculated Dai Nippon would garner five million yen, more
than thirty thousand dollars, right there among the shampoos and curlers.
The typical Japanese, she recalled, banked over a quarter of his or her
disposable income. Little wonder most of them had at least a year's salary in
savings. At this rate Dai Nippon's "Imperial Fund" would be over the top by
nightfall.
That evening NHK newscasts claimed it had been fully subscribed in the
first fifty-six minutes. After all, eight hundred billion yen was only about
six billion dollars, scarcely more than loose change to a people saving tens
of millions every day. It was, in fact, merely the beginning. The next day
more "Eight-Hundred-Year" funds were opened, by popular demand. Soon
the pension funds started to feel the heat, and a lot of institutions began
calling up. Yen flowed in a great river. All those homeless Japanese billions
knocking around the world had at last found a guiding ideal. Some rumors
even claimed the Emperor himself was actually going to manage the
money.
Tam couldn't wait to get outside and see firsthand what was going on.
This was something Allan could never in his wildest dreams have predicted.
As soon as she could get her hair dry she headed out; the girls didn't even
bother to charge.
Tokyo, twelve million strong, was in the streets. Even in normal times
the city could be overwhelming, but now . . . It was in pandemonium, an
advanced state of shock. As she struggled through the crowds a lot of men
were waving sake flasks, already gleefully smashed. The sidewalks had
become one vast matsuri, festival.
Something else, too. She found herself feeling a little uncomfortable.
There were glares, and then as she passed a withered old man running a
noodle stand, she heard him mutter "Gaijin." What did it mean?

What it "meant," she reflected with alarm, was obvious. The world had
just become a brand-new ball game. Japan's long-silent Emperor had once
more spoken to his people, just as he had at the end of the War. Back then
he had broken two thousand years of silence to inform his battered, starving
subjects "the war situation has developed not necessarily to Japan's
advantage." This time around he had confirmed Japan's long Imperial
heritage. The "meaning" was clear as day.
This wasn't a new direction. This was just getting back on track. Even
though the Emperor had been humiliated and secularized after the Great
War against the threatening gaijin, his people still thought of themselves as
a single, pure family. For a time they merely had no focus for that identity.
Now they had it again.
Well, she thought, why not? National pride. Not so long ago we
Americans had the Soviets telling us we were second best, so we blew a
few billion in tax money to plant a man on the moon and straighten them
out. The space Super Bowl. Why should Japan be any different? For years
now they've heard half the world claim they're just a bunch of hard-driving
merchants with a bank-account soul, when they knew in their hearts it
wasn't true. Now here's the proof, straight from the Sun Goddess. Time to
get crazy awhile.
In the middle of all the bedlam and horns and sirens in the street, she
yearned for somebody to talk with, somebody levelheaded enough to put
this frightening turnaround into some kind of perspective. That's when she
thought of Ken.
Of course! He was Westernized; he took the longer view. Why hadn't she
thought of him right away?
So off she went for a quick surprise visit with Kenji Asano at the
Institute for New Generation Computer Technology, research headquarters
for the Fifth Generation Systems Project. He and his staff would probably
be in a holiday mood, just like everybody else. Maybe he'd loosen his tie
and give her a little off-the-record rundown of what this was all about.

She knew the Institute operated out of the twenty-first floor of a
downtown Tokyo skyscraper. She'd been there before. She still had the
address, and the subways were clicking along right on time, though the fare
machines were off now in celebration. Half an hour later she was there. She
pushed her way through the milling lobby and grabbed an elevator.
As she rode, watching the lights tick off the floors, she found herself
wondering again what Ken was really up to. And what had happened to Dr.
Yoshida? However, it was hard to think about something as boring as MITI
and American defense vulnerability when people were whooping it up and
passing around paper cups of sake right there on the elevator.
Well, don't jump to conclusions. This paranoia of Allan's is probably just
some grotesque misreading. Dr. Yoshida got promoted, and Ken's merely
filling in for a while till the Institute can recruit a new director from some
university. The work here's too important for politics. Intelligent computers
are Japan's lifeline—the "steam engine" of the next century.
How would Ken react to her just showing up? After all, Kyoto was two
years ago. He'd claimed to be a widower, but was that merely conference
fast talk?
Best thing is just to play it straight, she told herself. Strictly business. Let
the rest fall out in time.
As she stepped off the elevator, she was relieved to see that the offices
were still open. Well, she thought, my first finding is that Ken Asano runs
this place with an iron hand, just the way Yoshida did. Total dedication.
Through floor-to-ceiling glass doors she could see the receptionist at the
desk, now excitedly chatting on the phone. Tam waved, and the smiling
woman immediately buzzed her through. Just like that. No different from
the last time.
Doesn't look to be any MITI conspiracy here, she thought. What exactly
had made Allan so worried?
She bowed and handed over her meishi, her business card.
"Asano-san, onegai shimasu."

CHAPTER SIX

"Matt, why don't you just send your action over to the 'bean pit’ for
chrissake?" The phone line from Chicago crackled. "That's where the
crapshooters are."
"Jerry, I wouldn't know a soybean if I ate one."
"Hell, half of those loonies over there buying and selling 'bean contracts
wouldn't know one either. Come to think of it, I don't know anybody over
on the Merc who's ever even seen a pork belly. Do they really exist?" He
was yelling to make himself heard over the din of the floor of the Board of
Trade. Futures on commodities were being bought and sold all around him.
Just then he paused, followed by a louder yell. "Right, I'll buy five, at the
market. Yeah. I'm talkin' one and thirteen bid. What? You've got to be
kidding. No way." Pause. I could almost see the blue-jacketed floor traders
frantically hand-signaling each other. Then he yelled again. "Christ, Frank,
I'm already long forty at sixteen. I'm getting murdered here. You guys are
killing me. . . . All right, all right, I'll pay fourteen for ten. Yeah . . . Shit.
Hang on, Matt. I gotta write this down on a ticket. . . . Jesus, I should be
selling Hondas like my brother-in-law down in Quincy. Sits on his butt all
day, screws his bookkeeper at lunch, and the man's making a bundle."
Pause. "Hell, Matt, what'd I just say?"
"If I heard right, you just bought ten thirty-year Treasury contracts at one
oh one and fourteen thirty-seconds. You just agreed to loan the U.S.
government a million dollars, Jerry. Very patriotic. Except you're probably
going to turn around and unload the contracts in the next five minutes to
somebody else."
"Oh, yeah. Right. I should be so lucky. Christ, where's my pencil? This
place is driving me nuts. I think my mind's going. I've gotta shorten up
some here before the close. Hang on."

He yelled at a runner to take his buy slip, then came back to the phone.
"Matt, you're really shaking this place up, you know. Guys are starting to
back away. And the people upstairs are beginning to wonder. You've gotta
think about going off- exchange with some of this. Hit the market-maker
banks. We can't keep up with you here. I could try to get the Exchange to
waive their position limits, but don't hold your breath."
"No problem, Jerry. My client's got plenty of other accounts. We'll roll
the next thousand contracts through a different one."
"Christ, whoever you're working for must have coconuts the size of King
Kong. You realize you guys're naked here? You're getting short billions."
"I just handle the orders, Jerry."
"Your numbers scare the piss out of me just looking at them." He sighed.
"Listen, Matt, take care. Get back to you tomorrow at the opening. Right
now I've gotta find some greenhorn to take a few of these puppies off my
hands or I'm gonna get blown out. Jesus, how'd I let myself get this long at
sixteen? Forty fucking contracts. And I was sure . . . Hey, gotta run. Think I
see some idiot over there signaling a seventeen bid. Kid must be from
Mars."
"Good luck."
"Right. Maybe I'll try prayer." He was gone.
I'd known Jerry Brighton since we crossed professional swords once in
the late sixties, and I'd never seen the man actually sit down. He gave up
law early, and these days he elbowed the mob in the Treasury bond futures
pit with the grim determination of a horse addict shoving his way to the
two-dollar window. If the bonds were sluggish, he'd roam the floor looking
for action. Football, you name it. He'd make up bets. Rumor has it, one
slow day he even set up a wager pool taking odds on which floor trader
would be the next to go broke, "tap out" in Exchange parlance. I'd guess
Jerry's own number was pretty low. A reliable source once told me Jerry'd
averaged a million a year for the past five, even while taking a hit year
before last for over two million when a certain famous "inside trader"
sandbagged him with a phony merger rumor. Maybe it was worth the ulcers.

Thing is, I know for a fact he'd have done it for nothing. A born market
maker, right down to his rubber-soled Reeboks.
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."
"The American dream, Herr Doktor."
"That it was. Now, they were making a memory chip called a 16K RAM,
that's sixteen thousand bits of Random Access Memory storage. Orders are
pouring in, and they can't buy the BMW's fast enough out in Silicon
Valley."
"I know all about that."
"Well, there's more. Seems Noda and Asano and their honchos at MITI
had been watching this and thinking over the situation. They decided,
probably rightly, that whoever's got the inside track on these computer chips
has the future by the balls. Twenty years from now there's nothing gonna be
made, except maybe wheelbarrows, that don't use these gadgets. So round

about '75 they concluded they ought to be the ones in the driver's seat. MITI
'targeted' integrated circuits."
"Well, why not? We're the ones told them they were supposed to be
capitalists."
"In truth. But just like in fairyland, our princess had a problem. See,
these chips weren't as simple to copy as an internal combustion engine, or
even a transistor. They're a heck of a lot more complicated. And to make
things worse, back when America was inventin' these silicon marvels,
nobody in Japan would've known one if it'd bit him on the butt. So it's a tall
order." He crumpled an empty cigarette pack and reached in his coat for
another. "Now, imagine you're these guys in MITI. You want to take over an
industry you don't know the first thing about. How're you gonna start?"
"I'd probably begin by licensing the patents."
"Nice try, but you don't want this job to be too straightforward. Then
everybody'll suspect what's happening, and besides, it wouldn't be as much
fun. So if you're this guy Noda, you decide to set up a sort of Manhattan
Project, like America had to make the first A-bomb. You go over to see
Nippon Telephone and Telegraph, their AT&T, and you say, 'Boys, we just
decided you're gonna pitch in with all you got. After that, you commandeer
some labs at Toshiba and NEC. Then you get yourself a batch of these little
American gizmos and start trying to figure out how the hell they work."
Henderson poured himself another drink, then turned back. "Now, since
you need to catch up fast, you do a little 'reverse engineering,' which means
you steal the other guy's R&D. You take a bunch apart and decide you'll go
with the 16K RAM chip made by Mostek—a big outfit here that's since
gone belly up, by the way, thanks to our friends at MITI. And by 1978
you've made yourself a Mostek clone. Bingo, you've got the technology."
"I think I'm beginning to get the drift."
"Whoa, buddy. You're just starting to get rolling." He forged on. "By this
time everybody's wanting these chips, so all of a sudden Silicon Valley can't
keep up. Now you and your boys at MITI are ready to move. You've got the
know-how, so all you need to do is start turning them out by the truckload.

Of course that takes millions and millions in plant investment, so you do
what Asano did, bring your old pal Noda back into the picture. Since he's
now running the Japan Development Bank, he obligingly lines up a whole
shit-load of cheap money for these outfits gearing up to chop America's nuts
off. All in all, he gets together what amounts to a subsidy of low interest
bucks to the tune of about two billion dollars. All carefully laundered.
Ready, set, go.
"Silicon Valley glances up from countin' its receipts and all of a sudden,
from out of nowhere, here come your Japanese chips. Reeeal cheap, since
you've got all these cheapo 'loans' to capitalize your plants. Inside a year
you've got nearly half the market.
"Now, you figure somebody's surely going to blow the whistle, so you
can't believe your luck when Silicon Valley thinks you're some kind of joke.
Come on in, they say, and sell as many of those crappy 16K models you
can, since we've got ourselves a hot 64K version cooking, and that's where
we're gonna make our real killing. When you hear this, you do a quick
retool. And while the Valley is seeing how sexy and expensive a design they
can come up with, your thrifty gang back home just sticks together a bigger
version of that 16K chip you stole from Mostek in the first place—and
you're out front with a 64K. Now it's time for hardball, so you flood
America with these things. You drop the price of your 64K RAM chips
from thirty dollars down to half a buck when they still cost over a dollar to
make. Before you know it, you've got seventy percent of the American
market."
"You're selling at a loss. Dumping."
"Exactly. 'Cause at this stage you don't care beans about profit. What
you're going for is the big fish, market share." Henderson lit yet another
Dunhill. "And sure enough, when it comes to the next generation, the 256K
memory chip, you've got ninety percent of the action. In very short order
most of your American competition folds. You ate them. Matter of fact,
Intel, which started it all, dropped out of RAM chips altogether—which is
kind of like Xerox throwing in the towel on copiers. This is less than a

decade after MITI's start-up, in an industry born in the USA. Hi ho, silicon,
away."
"But it cost a bundle."
"Short term, sure, but now the future's wide open. You live happily ever
after, my friend, just like in fairyland, because big, bad America's dead and
gone in the high volume end of semiconductors."
"But MITI can't use dumping as a regular strategy. After all, it is illegal."
"Well, now, ain't that a fact." He exhaled a lungful of smoke and
coughed. "So's selling your ass. But just take yourself a cruise down
Eleventh Avenue and you'll meet up with a lot of entrepreneurial ladies who
understand the reality of market forces. You've gotta get caught, tried,
convicted. If it ever does get that far, the most that's gonna happen is a fine.
A lot of folks claim MITI's dumped TVs, cars, steel, textiles, you name it.
So when they decided to move on memory chips, Asano was given a free
hand to do it the quickest way he knew how. And your buddy Noda ain't
exactly a pussycat either, the way he laundered the Japanese taxpayer's
money into them low-interest, manana loans."
As he returned to his Scotch, I sat there trying to think. What Henderson
had just described was a fundamental insight into how high-tech industries
operate.
"Henderson, do you realize what you're saying? That's a beautiful way to
knock out a country's high-tech research capability. Take away the volume
end of an operation and there goes your cash. Pretty soon you can't afford to
finance any more R&D. Which means that sooner or later you're selling
yesterday's news. You can kiss good-bye to your technological edge, right
across the board."
"Correct. America's semiconductor boys were figuring to use the profits
from memory chips to pay for research in logic chips, where you put a
whole computer's wiring on a chip. But now the money's gone. What it
really means is, end of ball game in information processing. Maybe it won't
happen tomorrow, but there's no doubt it's just a matter of time. You
dominate semiconductors, sooner or later you're just naturally gonna control

computer technology and all that goes with it. I even met a guy a while
back who claimed that whoever's ahead in computers is eventually going to
have the say-so about who has advanced weapons technology."
Could be, I thought. But that last extrapolation was a stretch. "Bill, I
think you're talking a pretty long line of dominoes. For one thing, we've still
got plenty of computer research here. The U.S. has a big lead in logic
chips."
"True, true. Who the hell can crystal-ball this one? All I know is, Intel
was claiming exactly the same thing about memory chips a few years back,
just before Asano and Noda and their pals chewed them up and spit them
out. All I'm saying is, you'd better watch your backside." He examined his
drink and reached for the ice bucket.
About that time Ben came lumbering up the stairs to observe our
maudlin ruminations. I watched as he settled himself near my feet with a
grunt, then plopped his chin down on his paws.
"Well, your fairy tale about MITI may or may not be true. But that's
water over the dam. Besides, who are we to be pointing a finger? The U.S.
has done its share of tinkering with foreign governments, making the world
safe for American shareholders."
"Hey, I make a profession of separating pious pronouncements from
reality. I never take an official story at face value."
"Okay, so Noda says he's just playing the market. But if he's actually
planning something else, then what is it?"
"Don't have the foggiest. Wish I did." He glanced at his watch. "But I do
know duty's about to call. I'd better get uptown if I expect to have any
female companionship for the apocalypse."
"Take it easy. Nobody flies on schedule anymore." I settled back into my
chair and glanced up at the large Japanese screen I had mounted on the wall
opposite. It was Momoyama, around 1600, the time when the most recent
crowd of shoguns took over Japan. Against a gilded background was a
fierce eagle, perched menacingly on a pine branch. The thing was so
powerful I just kept the rest of the room bare; nothing else I owned could

stand up to it. "You know, Henderson, the trouble with your pattern is that it
doesn't quite fit this time. Shorting Treasury futures is not exactly going
after an industry. So what's the new angle?"
"Damned good question." He stared at his glass, probably
wondering if one more for the road would impair his performance later on. I
guess he concluded yes because he didn't budge. "Speaking of angles, what
do you make of that sword business last week? Caused one hell of a flap in
Japan, so I hear."
"Major event. That sword should tell us a lot about early Japanese metal
technology. I've been trying to find out more about it, but nobody's talking.
No pictures, anything." I reached over and gave Ben a pat. "Curious though.
I think I remember Noda's mentioning that sword the night I met him. Eight
hundred years ago, the emperor gets caught at sea and loses the imperial
symbol. But he didn't breathe a word about having a project underway to
locate it."
"Well, you're my Japan expert. What's it all about?"
"Never assume you understand the Japanese mind." I pointed up at the
wall. "Take a good look at the eagle on that screen. You'd think it's just a
picture, but actually it's an important subliminal message. The daimyo who
commissioned this piece had that eagle put on it to let everybody know he
was cock of the walk. Means you cross him and you're dead. Symbols are
important in Japan. Noda and this woman Mori talked a lot about shoguns
and emperors. Maybe they hope the sword will somehow bring back the
good old days."
"Well, he's got enough money to do it."
"Looks that way."
"Hope we're not about to get kamikazes with a checkbook. Thoughts like
that could make a man real nervous." Henderson rose and strolled to the
fireplace. He examined his reflection in the large mirror over the fireplace,
then set down his glass on the mantelpiece and turned back. "You know,
Walton, I think I'm starting to lose my touch. I don't believe anything I hear
and only half of what I see." He sighed. "Been one hell of a day."

"Pretty standard Friday, far as I could tell."'
"Well, a damned strange thing happened this afternoon."
"Some woman turn you down? Maybe you ought to start working out,
Henderson, trim that little spare tire creeping in around the waistline."
"Still no complaints in that department, friend. No, this actually goes
back a ways, to a few months ago down in Washington, when I bumped into
a long-haired professor coming out of a committee session. Guy I
mentioned a minute ago."
"The linkup between computers and weapons?"
"Him. We got to BS'ing in the men's room, and it turned out he was some
computer hotshot from Stanford. He'd been testifying, I think, and he was
still wound up. Probably I got to hear all the stuff he'd prepared and
nobody'd asked."
"What was the pitch?"
"Defense semiconductor dependency. Claimed that if we keep on the
way we're going, relying more and more on foreigners for advanced chip
technology, we may as well kiss the farm good-bye. I had a little time to
kill, so I invited him to have a drink. He good as chewed my ear off. Finally
had to fake a dinner date to get loose. Man had a bug six feet up his ass
about the U.S. buying half the latest chips for our hot-dog military hardware
from Japan. Next war we fight, says he, we'll be buying high-tech weapons
systems from the Far East. Problem with that is, anybody else could buy
them too. And we'd get replacement parts whenever MITI feels like getting
around to it. Today I happened to remember him, so I decided to give him a
call, ask him if he still saw things the same wav."
"And?"
"No answer at his office, but since I had his home number, I decided to
give that a try. Best I can tell, a lot of academics goof off half the time
anyway."
"You get him?"
"Some police detective answered, wanting to know who I was, what the
hell I wanted, whole nine yards. Shook me up, don't mind telling you."

"So what'd your pal do? Rob a bank?"
"I was about to start wondering. Finally, though, I got to ask some
questions of my own, but it was a little hard to swallow the story. What I
mean is, I don't necessarily buy what I heard."
"Which was?"
"Well, seems he was supposed to meet with the Senate's internal security
committee this morning. Wife says she put him on the red-eye to
Washington last night around ten. He was carrying some document he said
he wanted to hand deliver. Something about it had him scared shitless."
Henderson paused. "Tell you, this is the kind of guy who takes security
seriously. When he’s worried, we all better be worried."
"So what's the problem?"
"Cop claimed he's just disappeared. Not a trace."

CHAPTER SEVEN

Ken looked terrific. That was Tam's first thought when he walked
through the high-security inner doors to greet her. He was square
shouldered and sturdy, with high, full cheeks, expensively trimmed dark
hair, and a small, delicate mouth. She figured him for late forties, early
fifties. Funny, but he'd always reminded her of one of those steely eyed,
expensively dressed actors you saw playing executives on the Japanese
soaps.
"Tamara!" He paused abruptly, then bowed. "Ikaga desu
ka?”
"Okagesama de genki desu. Anata wa?'
"Doing well, thanks. You never cease to amaze me. What a marvelous
surprise." A smile attempted to break through his dark eyes. "You've
surfaced again, just like the Sword."
She'd forgotten how colloquial his English was. Then she recalled he'd
told her once about doing his doctorate at MIT. Possibly because of that he
could be either Japanese or Western, chameleon-like, as the backdrop
required. He was every bit the charmer she remembered from Kyoto.
One thing was different, though. Kenji Asano was ill at ease. He was
trying to mask it, but it was there. And that was very different from the old
days.
As they passed the usual pleasantries, he led her down a hall, then
through a room where intense young men in open shirts were now opening
a case of Asahi beer. Computer terminals were in neat rows along the walls,
beneath gleaming white "blackboards" that sparkled with equations and
quips. The place was so informal, so . . . American. There were plenty of
jeans and frazzled sneakers among the forty or so young researchers, most
of them in their late twenties or early thirties. Plastered across the low
partitions were film posters and American counterculture bumper stickers

(Radio Already Stolen, Nuke a Commie for Christ); above a row of printers
a blond pin-up was unveiling her gynecological mysteries to the movie still
of a startled Godzilla; and a couple of rusty California vanity plates were
hanging over one long-haired staffer's terminal like big-game trophies—one
read 64K-1ST, the other EZ BKS. Probably commissioned by venture
capitalists in Silicon Valley whose Porsches had since been repossessed, she
thought. The rock and roll dissonance of Siouxsie & the Banshees sounded
from a tiny stereo assembled out of computer hardware and a new Yamaha
digital tape deck. Presumably as a stunt, the high end of the audio was
being used to drive a garishly tinted computer graphics display that had
been projected against one of the windows, creating a virtual image that
seemed to dance amidst the Tokyo skyscrapers like a Martian son et
lumiere.
But she wasn't fooled by the frat-house trimmings. She realized these
casually dressed young researchers were the pick of Japan's technical
graduates. Making the Fifth Generation team these days was one of the
highest honors in the land. After some initial skepticism the big
corporations were now competing for the prestige of loaning their young
stars to the project for a few years, since they hoped to reap enormous
benefits down the road.
In fact, the youthful atmosphere was entirely intentional. That, she knew,
had been the legacy of Ken's predecessor, Dr. Yoshida, who had refused to
let anyone over thirty-five on the project. Furthermore, since he believed
the stuffed-shirt layout of most Japanese offices and labs stifled creativity,
he had deliberately devised an un-Japanese workspace to try and reproduce
Western research environments.
Finally they reached a closed door. Metal. When she realized it was
Ken's office, she almost remarked on this departure from what she
remembered about Dr. Yoshida's well-known attitude. He liked to be out on
the floor, with just another low partition, right there interacting with his
young staffers.

Without a word Ken inserted a magnetic card into the slot beside the
door handle and then pushed it open. Not only a door, she thought, a locked
door. Are they finally starting to worry about industrial espionage?
She wasn't surprised, however, to see that his office had a
monastic spareness, with only his desk, a small but expensive leather couch,
and a row of computer terminals along one wall. He was, she knew, a big
believer in Zen philosophy. Maybe pan of the reason for the door was just
to shut all the madness outside and keep his own world serene.
Through the window behind him she could see Mt. Fuji, outlined against
a backdrop of autumn blue. He smiled and pointed it out, saying they were
lucky to have a rare smog-less day, then gestured her toward the couch.
"Welcome to my refuge." He was cordial but entirely correct—right
down to his conservative charcoal gray suit. Not a glimmer of a hint about
their brief Kyoto episode. "Let me have tea sent in." He leaned forward in
his leather chair and punched the intercom on his desk.
"Ken, please, don't make a fuss. I know I hate it when people just drop
by." She glanced back at the locked door, wondering. "Tell me if this is not
a good time for you."
"Tam, for you any time is a good time." He buzzed again— there had
been no response—then shrugged. "I guess things are getting hectic out
front just now." He laughed resignedly, then turned to her. "By the way, I
saw your new book. Fine piece of work. I do hope somebody over there
reads it. Are you still running your Center at NYU?"
"So far." She decided to spare him the details.
"Well, it's a good school. Getting better all the time. You've got some
first-rate supercomputer work at the Courant Institute, particularly with
your IBM connection, but you should keep an eye on Columbia. Now that
AT&T has joined with them to go after some of the Pentagon's AI contracts,
they may finally start putting together a major computer science department
up there too. In a few years Stanford and Carnegie-Mellon will have to step
lively to stay out front."

Hello, she thought. How come Ken suddenly knows so much scuttlebutt
about U.S. computer research? Nobody at home knows the first thing about
what's going on in Japan.
"I was surprised to hear about this new appointment, Ken." She settled
back on the couch. "I was guessing you had the inside track for MITI vice
minister in a few years."
"Ah, well, for now my work is here." He gestured uncomfortably about
the room. "Let me try once more for that tea."
She realized he'd slipped deftly around her quick probe
concerning MITI's new role in the lab. He knew how to be a team player,
she thought. Very Japanese.
This time he raised a response. A female voice dripping with long-vowel
honorifics announced his tea would be delivered immediately.
Next came a small, awkward lull as they both sat there remembering
Kyoto and not sure how to get around that memory. She wondered if it was
happening all over again.
Maybe it hadn't been just a fluke, a crazy one-night diversion. She was
about to switch to Japanese, thinking that might provide the jolt needed to
break the ice, but just as the silence swelled between them, there came a
knock on the door and tea.
She was half annoyed, half relieved.
He rose to walk over and began chatting as though they'd been
interrupted in the midst of some intense technical exchange.
"Are you scheduled to present a paper at that Kyoto conference coming
up?" He pushed a button beside the door, and it swung wide. "There's sure
to be quite a crowd. Everybody here's excited about supercomputers these
days."
"No, this is strictly a pleasure trip. With maybe a few interviews thrown
in to make it a tax write-off for a book I'm planning on robots." She
hesitated. "Though I actually might go down and try to see a few people."
"Then this could turn out to be a pleasant coincidence." He took the tea,
and the bowing girl vanished. Again the door clicked shut. "I have to go

too, but I'm hoping to steal a few moments of freedom."
"You're chairing a session this year?"
"Absolutely not." He turned serious. "I'm not allowed time for anything
like that anymore, Tam. This new project is top priority." He poured her a
cup of the pale green liquid and passed it over, seemingly relieved that the
tension had abated. "There's a lot of work here at the Fifth Generation lab
now that we're coordinating this program with the supercomputer effort."
"You mean with MlTl's supercomputer project?" Caught your little slip,
she told herself. You are still with MITI. Which means they have taken over
this lab.
He didn't blink. "As you probably know, MITI has the goal of creating a
machine capable of a hundred billion computations a second, targeted just
down the road. Which means we have to come up with entirely new
computer languages and architecture."
"Parallel processing."
"Exactly. Handling multiple streams of information at once. Now that we
finally understand what's required for a superfast computer, this work in AI
just happens to be very relevant. It turns out we humans are already walking
around with parallel processing in our heads, able to handle words, images,
ideas, all at the same time. So if we want to create machines that operate as
fast as possible, then it's crucial to understand how our brain manages
things like recognition, learning, inference. Our hope is that by utilizing the
studies here in those areas, incorporating them into our supercomputer
work, we might be able to put ourselves a major step ahead. . . ."
Good God, Tam thought, it's elegantly simple. That's why MITI has
taken over the Fifth Generation Project. They're going to use this research
in artificial intelligence to come up with a computer more powerful than
anything the world has yet imagined. Their silicon monsters are about to
start replicating themselves, getting smarter as they go, like in some bad
fifties horror flick. The difference is, this isn't make-believe.
"So you're here on behalf of MITI."

He paused. "For coordination. As I said, MITI needs the Fifth
Generation work to be accelerated." He still hadn't exactly answered the
question. "As part of our supercomputer effort."
Tam knew that Hitachi and NEC were both already claiming they had
the world's most powerful machines, faster even than Cray's entry, the best
American computer. What did MITI want?
He continued. "With 16-megabit chip production already going strong
and 64 megabit commercialization in the wings, it did seem the right time
to pull all our work together. If you think about it, computer speed and
computer intelligence go hand in hand. I'll show you in a second what I
mean."
Not kilobit. Megabit. MITI was going for the kill. This was a crash
program. Why?
"Does this mean you plan to increase your funding for the Fifth
Generation effort?"
"Whatever it takes to do the job," he replied after a moment's hesitation.
"I suppose there's never enough money, is there?"
"Ken, why the rush? This sudden drive?"
"It depends on whom you ask." He leaned back and looked at the ceiling.
"Some call it survival, Tamara. Maybe it is that simple. Japan is at a
crossroads; we're rapidly losing our edge in the cost of labor. The only
possible way to counter that is to step up our use of smart machines."
"Well, it looks as if I came to the right place. I'd like to add your name
to my interview list."
His look darkened a moment. "Strictly off the record." Then he smiled.
"And only if we can do it over dinner."
"That sounds like a bribe."
"Call it an offering from an old admirer." He smiled, attempting to ease
the tension. "The most I can do, for now at least, is just give you a small
peek at a few of our experimental gadgets. Details are strictly proprietary.
At the moment we're concentrating on computer vision and voice access.

And on that last, by the way, I think we've just about reached AI's Holy
Grail, natural language comprehension."
"Good luck." That was one of the mythical dreams of AI research, a
computer that could understand the speech of anybody who happened
along. Even though millions had been invested in the U.S. nobody was
anywhere close yet.
"I think we're getting there. Enough so in fact that we're starting to look
at applications. Expect commercialization in, oh, say a year, two at most."
Look out IBM, she found herself thinking.
"I probably shouldn't be showing you this, Tamara. So let's just keep this
informal. No notes. But here, have a look at one of MITI's new toys. Can
you guess what this is?" He passed over a small device that had been sitting
on his desk, his hand lingering on hers a moment longer than absolutely
necessary.
She stared down at what appeared to be some kind of calculator-watch,
except there was no watch face, merely a small speaker and two buttons.
"That uses advanced versions of MITI's new 64-megabit memory chips.
There's nothing like it anywhere in the world. Without ever having heard
the speaker's voice before, no calibration, it can translate ordinary spoken
English into Japanese." He pointed to one of the buttons. "Just press there
and talk. When you finish, push the other button for the translation."
She did, testing it with the opening paragraph of Pride and Prejudice, her
favorite novel. A simulated voice emerged from the small speaker on the
face of the device and gave it back . . . in flawless Japanese.
"Not bad." She set it carefully onto the desk. The thing was actually
almost frightening.
"Using this, linked to our new high-definition video and satellite, you
could punch a button in your living room and bring up people on a wall-size
screen from anywhere in the world, then talk to them in your language and
be understood in theirs. It's a quantum advance over current technology."
He retrieved the device, dropping it into a desk drawer.
"I must admit I'm very impressed."

"Truthfully, so am I. Where's this program of MITI's taking us?" He
looked up. "But let me show you something else, which I think is even
more astonishing. Of course you're aware that speech comprehension is
easy compared to the really tough nut, duplicating the human eye. Since a
visual image can contain billions of pieces of information, it can be very
time-consuming for a computer to analyze all those at once and figure out
what it's looking at. I've heard people at IBM claim that for a computer to
recognize something even as simple as an odd-shaped coffee cup would still
require almost an hour of processing, that to match the human eye and brain
could take a computer the size of a building. But watch."
He walked over to a black metal installation attached to the wall and
held up three fingers before its small lens. Then he pushed a button and
spoke into a built-in microphone.
"What do you see?"
She started to reply herself, then realized he was talking to the lens.
This time the answer took about ten seconds. Finally a voice in passable
simulation of the Tokyo dialect emerged from a gray speaker beneath the
lens. "That is a human hand."
"How many fingers does this hand have?" he continued.
Again the eerie, disembodied voice. "The normal human hand has five
fingers. This appears to have only three."
"Thank you." He punched a button and turned back. "That came off the
mainframe here. Can you imagine the amount of memory and logic
processing required to achieve what you've just witnessed: the data base and
the computational power and speed? Not to mention the recognition of my
voice commands."
"How does it do it?"
He paused. "Tam, this is proprietary, top secret, but what you've just
witnessed is an example of parallel processing with MITI's new, still
classified 256-megabit dynamic RAM's."
"A quarter of a billion bits of data on a chip." She just stared. "Are they
writable?"

"Of course." He again settled himself behind his desk. "The test versions
have circuits only a hundred or so atoms wide. And this is only the
beginning. Within five years, maybe no more than three, MITI fully expects
to have a desktop machine that will pass the Turing test."
"Three years?" It was almost unbelievable. Passing the "Turing test"
meant the computer's "thoughts" and "speech" would be so lifelike you'd be
able to talk with it and not realize it wasn't human. Al's end-of-the-rainbow.
"As you can see, the project is getting close." He looked pensive, like
some Zen monk. "Strictly off the record—and I mean that—what MITI is
working toward is total automation. Factories run by machines with human
skills, intelligence, manual dexterity. In fact, several of the robotics labs at
Tsukuba Science City already have prototypes in advanced stages of
development."
She was stunned. This was the kind of futuristic talk you heard from all
the AI buffs, but it was still mostly speculation in the U.S. and Europe.
Japan, though, was taking it straight to commercialization.
"Why are you telling me all this?"
He sat silent for a moment. Then he looked at her. "Because it's time the
world understood something very important about this country. There are
people here . . . with an agenda. And resources."
"What do you mean?"
"Tam, there are people, important people, who are getting fed up. Know
what they're saying? Try this. Our country has a monarchy older than
Rome, a heritage of literature, art, aesthetics, equal to anything in the West.
We've never had any colonies, any raw materials besides air and water. All
we do have is a willingness to work and save—the one natural resource
running short in the West. In less than half a century we've risen from the
most total devastation any country has ever experienced and achieved
technological parity with both the U.S. and the Soviets. We launch
satellites, split atoms, splice genes. But still a lot of foreigners claim all this
country can do is copy from the West, steal and commercialize other

nations' inventions. Only a short time back the leader of France called our
prime minister a 'transistor salesman.' That's right. A 'transistor salesman.'"
"Ken, that stupid crack was by de Gaulle. Years ago. It's—"
"Tam, look around you. This is an old country. And a lot of influential
people have long memories."
"You're getting melodramatic."
He shifted in his chair and studied the white peak of Fuji. "Think so?
Don't delude yourself. Believe me, the West is about to dig its own grave."
"What are you trying to tell me?"
"Nothing you can't see with your own eyes." He turned back. "MITI is
now ready to move into the next phase. Finally here's a project that's as
strategic, in its own way, as the bomb. If Japan can succeed in creating a
machine capable of humanlike thinking, it will be the most profound
achievement in the history of mankind." And this project is well on its way.
There may be nothing that can stop the events that lie ahead."
"Stop what? What events?"
"That's not a simple question." He caught himself and eased up, smiling
uncomfortably once again. "Forgive me. None of this is for publication." He
hesitated. "Your work is well-known here in Japan, Tam. You are one of the
few Americans our industrialists respect unreservedly. Maybe you weren't
aware of that. Your books are highly regarded; in fact, I read the new one in
manuscript." A long pause, then, "Would you ever consider working with
me for a while? Come back home, so to speak? You can see the
implications of this project."
"I see the implications, all right." She didn't know what to say. Why a
sudden job offer from Ken? Or was it from MITI? "But where is this
headed? If Japan achieves this technological supremacy, what then?"
"Before the flowers bloom, MITI must tend the garden." He rose and
poured more tea into her cup. "But enough. You know, I've thought about
you a lot. Tell me how you've been. What've you been doing?"
"Teaching, writing, you know. Everything and nothing."

He smiled, then brushed an imaginary fleck of lint off his tailored
woolen cuff. "Well, perhaps we'll have some time to talk."
What was he driving at? Was there more? Something going on he didn't
want to broach here in the lab?
"Tam, it is so good to see you once more." He looked up again. "Would
you be interested in going down to Kyoto with me day after tomorrow?
There are some things . . ." He sipped at his tea. "As I said, I'm scheduled to
look in on the conference and see a few people, but I should have some free
time."
"That conference doesn't start till next week."
"Actually I need to be down a few days early."
"Oh. Why?"
He measured his words. "Oddly enough it has to do with the Sword.
Things have started moving pretty fast since those archeologists working
for Dai Nippon recovered the sacred Sword-of the Emperor Antoku."
"I saw the Emperor on TV. Try going outside now."
"Well, I think I'll close here a little early and let my people go on home.
It sounds like their celebration has already started anyway." He gestured
toward the music and noise filtering through the door. "But the reason I
need to be in Kyoto a few days in advance is to see the president of Dai
Nippon."
"The firm that—"
"That's right. His name is Matsuo Noda. I've known him for some years
actually. He contacted me a couple of days ago about a meeting. I'm not
sure what he has in mind precisely, but I have to find out. He's just become
one of the most influential people in the country, not that he wasn't already.
And now with all the money he's about to have in this new Imperial fund . .
."
"The one mentioned at the Emperor's news conference?"
"Exactly. As you might suspect, that was merely the formal
announcement. Some of us at MITI heard about it several days ago. My
private hunch is that in a few days Matsuo Noda could well have more

resources at his fingertips than any one man in the history of the world." He
looked at her. "It's almost frightening when you think of the power he'll
soon have."
"Ken, I think I would like to come along with you." What was going on?
MITI's plans already were pretty astonishing. And now this new national
hero, the president of Dai Nippon, was about to get involved.
More than that, she'd half forgotten how interesting Kenji Asano really
could be. Her trip was taking a lot of unexpected turns.
"Well, then, in that famous American phrase, 'Why not?'" He smiled, the
mask firmly back in place. "In fact, I'll try and arrange for you to meet
Matsuo Noda while we're there." A conspiratorial wink. "Maybe he'll even
give us a glimpse of the Sword."
Tokyo was one big party that night, the streets mobbed. They eventually
found themselves in Shinjuku, in a high-tech new restaurant all chrome and
glass and New Age prices. The tuna sashimi seemed only minutes from the
sea, and the aged sake was smooth as a flawless white Bordeaux. Afterward
they grabbed a taxi over to the Ginza, where Ken got seats on the tatami
straw mats down in the orchestra of the Kabukiza, and they took in the last
act of a Kabuki play (featuring the famous Ennosuke III) that had been
underway since late afternoon. The evening ended up in the art deco
mezzanine bar at the Imperial, the part salvaged from the old Frank Lloyd
Wright structure, where she kicked off her shoes, ordered a twenty-dollar
cognac, and nestled against his elegant shoulder.
What was that he'd said about coming back home? Her books being
circulated here even in manuscript? What was he hinting at?
Finally around two A.M. he called for the check and neither said a word
as they headed for the elevator.
She thought one last time about Allan's warning as she watched the
floors flash above the door and searched for her key. But this was no time to
brood about conspiracies. Ken made her feel good. Which was a hell of a
lot more than Dave Mason had done. Besides, Ken had some style; all Dave

did was mope around in a pair of baggy chinos and whine about his
department. Ken was upbeat, alive, aware.
What's more, she enjoyed being with him, feeling the heat of his cheek
against hers. As the elevator doors opened, he slipped an arm about her
waist and nuzzled her hair. Then their lips met.
He was just as she remembered. His touch, his taste, his body. Still,
something about him was definitely changed.
Then he reached for her key and opened the door. The minute they
entered the sitting room of her suite, he took her in his arms.
"Tam, let's not talk anymore about business, no more Swords. I'm
already bored hearing about it. Just us. What do you say?"
"Agreed." She looked at him and suddenly realized something. Ken
Asano was beautiful, kirei. Not handsome, beautiful. Anata wa kirei desu,
Kenji Asano. "Want a nightcap? There's some airport Remy in my—"
"Who could even think about another cognac. I just want to think about
us." He stood back. "All right, maybe if you insist. For old times' sake."
"'Old times' is right, Ken. It's been a very long time since Kyoto." She
located the dark Remy bottle, still packed in her leather flight bag. A nice
inauguration, she told herself. "What was that all about? Was it real? Or did
I just imagine it all?"
"The heart never lies." He settled on the couch. "Do you really
remember?"
"Vividly." She laughed as she poured an inch into each of two thin hotel
tumblers. "Including that dreadful bar you took us all to."
"A glimpse of the real Japan, Tam, for our tourist friends. Show them it's
not all ikebana and haiku. Believe me, it's not." He clicked her glass. "Do
try to forgive me. And here's to us."
"To us."
"And to the slightly scary world we're stumbling into. Japan needs you
here." He pulled her next to him and brushed her cheek lightly with his
fingertips. Then he kissed her deeply on the mouth, and again. "/ need you

here, Tam. Somebody like you. There's . . . well, there's a lot we could do
together."
She reached up and loosened his tie, then began unbuttoning his shirt.
His chest was firm, smooth, scented. She wanted him. "Let's just remember
Kyoto for a while."
"I've never forgotten it."
Sometime around four A.M., more content than she had been in a long,
long time, Tam Richardson lay awake on the cool sheets, Ken's trim body
beside her, and wondered how it would end this time around.
Or possibly, just possibly, it wouldn't.

CHAPTER EIGHT

Back in New York, optimism was in increasingly short supply. What do
you do if you think you're being set up? One thing, you may have occasion
to muse long and hard about the consequences, personal and otherwise. You
also may choose to ponder the larger motives of the individual behind it all.
So far, what had happened? Matsuo Noda had hired Matt Walton,
corporate attorney-at-law, to begin shorting the American Treasury market,
then proceeded to make himself a bona fide hero back home, in the process
of which he acquired access to the biggest chunk of savings in the world,
presumably the "financial arrangements" he once alluded to. Using that
money as margin, Noda was ready to shift his play into high gear. My latest
telexed instructions indicated he was poised to accelerate dramatically,
"borrowing" bonds and selling them for whatever the market would pay. Of
course if the price went down anytime soon, he could then replace those
borrowed instruments at some fraction of what he'd sold them for. The man
was gambling, for godsake. With the "Emperor's" fund.
Or was he? Therein, as somebody once said, lies the rub. Short selling
has always been a reasonably good definition of gambling, except . . .
except you are gambling only if you are wagering money on an event
whose outcome is not precisely known. If you do know it, you are not
gambling. You are taking prudent steps that will allow you to benefit from
prior knowledge of said, etc.
Enough airy semantics. The big question: Why me? Now, I've been set
up a few times before in my life. Everybody has. I even wonder in darker
moments if the reason Joanna demanded a champagne lifestyle wasn't to
make sure I spent all my time supporting it, thereby rendering me exactly
what she eventually accused me of being—an absentee husband and father.
That is a no-win situation.

The undertaking at hand, however, could have a very obvious
beneficiary. Matsuo Noda. The only problem was that in order for Noda to
win, America had to lose. Massively. The old zero-sum game: for every
winner there has to be an equal and opposite sucker.
After that Friday evening with Henderson, I spent the next week mulling
over the complexities of the situation. The whole thing boiled down to two
very strong presumptions: one, I was indeed being set up, being told one
scenario while the truth lay in quite another direction; and two, my
employer had something very lethal to America's financial health up his
sleeve. Still, these were merely presumptions, nothing more. The only thing
I was sure about was that I had a very unpredictable tiger by its posterior
handle. Time to find out a little more about my pussycat.
I hadn't actually seen Dai Nippon's midtown office, but I talked to the
manager almost every day on the phone, and he occasionally shipped
materials down to my place in the Village. I knew they'd taken over the
building, installed a new security staff, moved into the vacant floor, and
were doing something. However, I hadn't been invited up to see what the
something was. I concluded the time was at hand.
As I understood it, Dai Nippon's purpose in life was to oversee the use of
investment capital. Fair and good. As it happens, Japanese business tends to
be funded a little differently from our own. Instead of selling off stock to
the public, Japanese industry relies much more heavily on bank financing.
In fact, less than twenty percent of Japan's industrial assets are publicly
traded. Consequently the rules of the game are changed. If your company is
beholden to a financial institution instead of a lot of nervous stockholders
and fund managers, you're in partners with somebody less interested in next
quarter's profits than in the larger matter of your still being around ten years
hence to pay off its paper. That lender naturally rides herd very closely on
your long-term planning.
As best I could tell, DNI was one of the herd-riders, a sort of hired gun
that monitored various companies' operations to make sure they were
managing their loans prudently. Again, since the prospectus emphasized

they were specialists in overseas investment, I assumed that maybe part of
the reason they were coming to the U.S. was to oversee the Japanese
companies doing business here with money borrowed from back home.
Nobody had actually told me this. In fact nobody had told me anything.
That was merely what I considered to be an educated guess. It was the only
thing I could think of that made the slightest sense.
The following Monday morning I told myself the guesswork was over. It
was high time I went up and saw for myself what they were doing. All I
needed was an excuse.
Then the phone rang. I was in the garden out back, skimming the Times
and working on a pot of fresh coffee while waiting for the Chicago
exchanges to open. Ben was cruising the fence line, sniffing for cats.
When I picked up the receiver, waiting at the other end was Mr. Yasuhiro
Tanaka, office manager for the New York operation. He chatted a bit about
the weather, how nice it was to be working in the U.S., the usual. Finally he
mentioned that he needed to meet with me to discuss, among other matters,
certain legal questions concerning one of the other leases in their building.
Would it be convenient if he came down to my place and we went over the
paperwork?
Not necessary, I replied. I just happened to be headed for midtown in the
next few minutes. I'd throw a copy of the leases into my briefcase and drop
by to see him. Then before he could protest, I mumbled something about
the doorbell and hung up. The phone rang again immediately, but I didn't
answer it. I was already putting on my jacket.
I scribbled a few notes for Emma, taped them to her word processor, and
headed out the door. Minutes later I was in their Third Avenue lobby,
greeting the new security staff, several of whom, as a favor to Tanaka, I'd
interviewed for their jobs.
Then I took the elevator up to DNI's offices on the eleventh floor and
proceeded to have my argyle socks blown away.
First off, top security. The entryway just off the elevator bank had been
completely transformed. TV intercom, steel doors—it could have been the

vault at Chase. I told the camera's eye who I was and then waited while a
computer somewhere gave me a voice-ID check. How they managed to
have me in the system already I wasn't exactly sure . . . maybe they'd taken
it off the phone?
After I'd cleared that, the doors slid open and I entered the first chamber
of a two-room security check. An electronic voice ordered me to put my
briefcase into the X-ray machine while I proceeded through the metal
detector.
That cleared, the set of steel panels leading into the next room slid open
and I went in . . . to be confronted by two crew-cut guards who could have
been retired sumo wrestlers. As the doors clicked behind me, I took one
look at DNI's welcoming committee and realized they were packing Uzis,
those Israeli automatics that could probably cut down a tree in about two
seconds. No candy-ass .38's for Dai Nippon. Without ceremony they
commenced a body search. It was all very polite, but it sure as hell wasn't
perfunctory. I just stood there in astonishment while this gorilla roughly
twice my size felt me up.
That indignity completed, I was now in line for the real surprise. Yet
another set of steel doors opened, and there awaited the man I'd been
dealing with over the phone, Yasuhiro Tanaka. Medium build, late forties,
cropped hair, automatic smile—he was Noda's chief of operations for New
York. He didn't say much, just led me onto the floor, heading for his office.
But he was clearly the on-site daimyd: lots of heavy bowing from the
young, white-shirted Japanese staff as we headed for the corner suite.
Which brings us to the real shocker. Dai Nippon's floor operation looked
like the flight deck of the Starship Enterprise. Let me attempt a brief
description. In the far back was a massive NEC augmented supercomputer
—a half dozen off-white octagonal units about head high, one the
mainframe and the others storage modules arranged alongside in a neat row.
Pure power. The whole thing was encased in a glassed room with (I
assumed) critical temperature and humidity control. Then out on the floor
were lines and lines of workstations. Computer screens everywhere, printers

running, stacks of color hard copy—pie charts, bar graphs, spreads—plus
terminals carrying every financial service offered by cable or satellite.
This was just the first, five-second glance. Incredible, I thought. There
must be a heck of a lot more Japanese investment in the U.S. than anybody
realizes.
But something had to be wrong here. Why should . . . ? Finally I slowed
down—Tanaka was hurrying me along, clearly
annoyed that I'd appeared uninvited. That's when I noticed the rest. Across
one wall was a line of projection TVs, on which computer data was being
scrolled. As we walked past, I noticed that each screen seemed to be under
the scrutiny of a team of analysts, who were intently studying the numbers,
comparing notes, running calculations on their individual terminals.
What's this all about?
I stopped before one screen and studied it a second. Beneath it a small
sign said simply "Electronics." The one next to it read "Biotechnology."
Then I glanced at a couple of others. Each one covered a different industrial
sector. Gee, I thought, you're really out of touch, Walton. Who would have
guessed Japan has so much investment in manufacturing here. I didn't
remember much going on besides a few joint ventures. Sure, they've got a
few auto assembly plants, that steel plant they'd bought out on the coast,
some TV-tube production, chips, VCRs. But mostly it represented entries
into sectors where they're trying to get the jump on protectionism, start a
token manufacturing operation here before they get shut out.
"If you have any questions, I'm sure we can discuss them later." Tanaka
had taken my arm and was urging me politely toward his office. The whines
and hums of laser printers and the beep of computers made conversation all
but impossible.
"Well, I was merely interested . . ." Then I stopped.
Know that test psychologists have, the one where you look at a couple of
silhouettes and describe what you see? If you think you're supposed to look
at the white part in the middle, then you see one thing—I think it's a vase.
But if you concentrate on the black instead, you see something else entirely,

maybe the profiles of two human faces opposite each other. Thus what you
see is largely a product of your prior assumptions concerning what you're
supposed to be looking for. Or maybe it measures whether you view the
world as a positive or a negative image, something like that. I don't recall
exactly. I do remember receiving a B- in Psych 101, which was generous.
The point is, what I first thought I saw was actually the inverse of what
was really there. I'd told myself what it was, rather than believing my eyes.
Dai Nippon was running analyses, bet your ass, but the industries under
their silicon microscope weren't Japanese.
They'd computerized the financial report of every American company
traded publicly and were now in the process of taking those outfits apart.
And I can assure you it was cold-eyed in the extreme, strictly hard
numbers: quarterly earnings, long-term debt, inventory, stock outstanding,
CEO bonuses. As any professional analyst would do, they'd cut right
through a company's glossed-over excuses, phrases such as strategic
retrenchment, aimed at the dividend-nervous retirees in Cedar Rapids. They
were putting together the real story.
Same with the financial markets. Screens were scrolling up- to-the-
second quotes on everything from three-month T-bills to thirty-year
Treasury bonds. Computers were running arbitrage spreads on every issue.
They knew exactly where they stood with all their futures contracts. I
realized my little telephone boiler room had merely been the tip of some
awesome iceberg.
"Mr. Walton, it is a pleasure to meet you in person." Tanaka was
ushering me into the corner office after our pass through the floor. Unlike
most executive suites in New York, its windows were sealed with heavy
drapes. Again, total security. "Let me order tea." He waved at somebody out
on the floor.
I nodded, still chewing over the setup and trying to understand what in
good Christ was underway.
"I'm sure you are a busy man, so perhaps we should proceed directly to
my concerns. As you may have guessed, we are almost ready to move into a

new phase of our operation."
"Oh." I guess it must have sounded dumb, but I honestly couldn't
manage a full sentence. Finally I recovered slightly. "I'm a little surprised
by the scope of all this. What's the purpose?"
"Our president, Noda-sama, should be arriving in a few days. I'm sure he
will be happy to address your questions in detail." Tanaka paused for the
green tea, delivered by a silent girl—the young, smiling, uniformed
Japanese "office lady"— who scarcely looked up as she settled the tray on
the desk. After she was gone, he continued. "This, of course, is only the
financial nerve center for our operation. Our technical staff will begin
arriving soon."
Technical staff? Then who were those grim-faced minions out there
punching computers?
"You're bringing in more people?"
"Correct. Which is why I needed to see you. I understand that the lease
on the floor above us is due for renewal at the end of this month. We would
like to acquire that space. We will need to convert it as quickly as possible."
"What about the current tenants?"
"There is a rider in their lease, Mr. Walton, that permits the owner of the
building to reclaim the space for his own use at the time of a renewal. We
fully intend to make use of it. Consequently as our American attorney you
are hereby authorized to inform them that their lease will not be
automatically extended, that they will be expected to vacate. In accordance
with the legal and binding terms of their lease. Advise them also that there
can be no grace period. We will require the floor immediately."
I looked at him. So much for the current tenants. "What will these new
offices be used for?"
Tanaka sipped his tea. "That section will have another managing director.
Our range of operations here brings other responsibilities."
"What section, what range of operations?"
"I am regrettably not at liberty to discuss the specific extent of DNI's
interests."

"Well, let me break some news to you. I like to know who I'm working
for. So you'd better start discussing specifics and fast."
Tanaka seemed to be having trouble meeting my eye. The skull beneath
his short-cropped hair glistened under the harsh neon lighting.
"Mr. Walton, you are now part of the DNI team. That position includes
obligations I am sure you would not wish to take lightly."
"Hold on." The hell with politeness. "I'm not part of your 'team' or
anybody's. I came on board with the explicit understanding that—"
"Mr. Walton, kindly sit down." He pointed without ceremony to a chair. I
just looked at it, then back at him.
"As you are a scholar of Japan," he continued, "I'm sure you are aware
that an employee's loyalty to his company is considered to be a gauge of his
character. A company is a family, and one considers its interests in that
spirit."
"Maybe you didn't notice, but I'm not Japanese. 'Nihon-jin'
as you'd probably put it. I'm a gaijin. We usually work for number one."
"At the moment, Mr. Walton, you work for Dai Nippon. There is an
assigned role for you, one that Noda-san expects you to fulfill."
"Maybe I just handed in my resignation."
"I do not really think you would wish to do that." Deadpan. The
confidence with which he made that statement told me this guy could make
a killing at poker. Unless he had a few cards in the hole I didn't know about.
"It would hardly be in your best interest. We expect your contribution to be
crucial."
"What contribution?"
"That will become plain in due time, Mr. Walton." He was measuring his
words as he continued, maybe easing up a bit. "For now, let me merely say
we know you to be a man with substantial curiosity. Consequently we
believe that what lies ahead will be of considerable interest to you."
What was this samurai up to?
"Maybe it's time everybody put their cards on the table. And why don't
we begin with you." I thumbed at the floor outside. "What the hell's going

on out there?"
"At the moment nothing in this office need concern you. But perhaps I
can tell you this. Now that you are serving as our corporate attorney, you
are in a position to help us pursue other avenues."
I looked him over. Tanaka was beating about the bush. Why? Maybe it
was merely the Japanese style, but he also seemed to know exactly what not
to say.
"I'm still waiting to hear what's next."
"Very well. As long as you're here . . ." He sipped calmly from his cup.
"It is common knowledge that Japanese savers have become the world's
largest lenders, with overseas investment that now exceeds, by the way, the
greatest rate of lending by OPEC even at its peak. The Japanese people will
have over a trillion dollars in overseas assets within the next few years."
"I'm familiar with the numbers." I also knew that with several trillion
dollars in spare change sloshing around back home, they were sending
abroad a mere dribble of what they had.
"Were you also aware that over four fifths of our overseas investment is
currently in dollar-denominated instruments?"
"No surprise. The dollar's still the name of the game, worldwide."
"True enough, but we at Dai Nippon are concerned that so many of our
institutions have such heavy exposure in a single currency. Accordingly, in
addition to our program with interest- rate futures, we also feel it would be
prudent to provide some protection for this currency risk. In the same
manner, I might add, that American investors often do."
"You mean some downside protection? On the dollar?"
"That is correct. A devaluation or a sudden drop in exchange rates would
jeopardize much Japanese capital. Therefore we feel it would be prudent to
enter the currency-futures markets to cover at least some of the dollar
exposure of our investors."
Jesus! I suddenly needed a Valium. In addition to Treasuries, now Dai
Nippon was about to short the dollar, pre-sell it in advance of . . . of what?

Had Noda been lying to me right down the line? Setting up a
cockamamie cover with interest futures while all along he was setting up an
international currency swindle?
Or were we about to get down to the real action? He'd scheduled his
curtain raiser, whatever it was, then realized he might accidentally pull the
plug on the U.S. greenback? So he'd decided to arrange a little currency
insurance for everybody back at the ranch, just in case.
Don't ask me why, but I was drawn to this pending nightmare like a moth
to flame. This was a ringside seat at . . .
All right, who am I trying to kid? That was the moment when I finally,
finally grasped what our meeting was all about. It was to formally announce
the tidal wave that would soon engulf America. And now Matsuo Noda—or
maybe I should say Noah—was, in his oblique Japanese way, handing me a
pair of tickets good for one round-trip passage on his ark. The only thing
missing was the schedule.
By then I didn't care whether I was on board or not; I figured I'd just as
soon try swimming on my own. But I had one very good reason to play
along.
"Okay, what's the game? Want to sell some dollars for delivery down the
road?"
"We assume you are familiar with the markets."
"I stay in touch. How would you like to go? If you want
currency futures, there're the exchanges. Or you can buy forwards, which
are more or less the same thing, from any number of banks around town.
Futures only go out for a year, maximum, but I can probably get you
forwards out to three. Come to think of it, Citibank will quote you ten-year
forwards."
"We would be looking at shorter terms."
"No problem. Currency futures are quoted for March, June, September,
and December. That's on the Chicago Mercantile Exchange's IMM. But if
three months are too far out, then you can get options on spot currency
contracts down at the Philadelphia exchange, which allows early exercise.

Or if you want, I think you can get off-exchange bank quotes as short as one
month. Citibank has a big FOREX desk. And Bankers Trust, and First
Boston, or even Banque Indosuez. Of course, if you really want to get
serious, there's the currency trading floor at Barclays Bank in London. . . ."
"We expect to be active in all markets, worldwide. That seems best."
Tanaka continued, "However, we are only interested in December futures
and one-month contracts in the forwards. After that, we may choose to . . .
make other arrangements."
Hang on, America.
"Right. And what are we talking here in terms of amount?"
He handed me a sheet of paper.
It was like he was ordering up sandwiches from the deli. Corned beef on
rye, lean, with extra mustard and a slice of pickle. How many? Let me
check. Oh, say a few hundred billion.
"This is going to take a few days." I passed it back, calmly as I could
manage. "Why don't you send a schedule down to my place late this
afternoon. My secretary will be there. I'll get started in the morning." I rose.
"In the meantime, you'll understand if I take today off and catch up a little
on other work."
"Of course." Tanaka bowed, head still glistening.
"Be in touch tomorrow." I nodded farewell.
"Until then, Mr. Walton." Another bow as I turned to leave.
I walked back through the floor, again trying to digest the spectacle. This
was undoubtedly the most comprehensive operation I'd ever witnessed.
What in hell did all this analysis of industrial sectors have to do with
currency hedging?
Not a lot of time to reflect on the question, however, since I was
summarily being ushered toward the steel security doors by one of Tanaka's
flunkies, a young tough who seemed to speak no English, but who could
strong-arm very eloquently.
In moments I was outside, facing the bank of elevators. That was when I
remembered the upstairs tenant, a big public relations outfit. Better take a

couple of minutes and give them the word.
Rausch, McKinley, and Stein were in the middle of proving conclusively
that our mayor knew nothing about contract kickbacks, that he was in fact
the closest equivalent New York had to driven snow. His Honor, in the
meantime, was hastily returning the campaign contributions of all the real
estate executives who, flanked by their lawyers, were now being featured
on the front page of the Daily News.
Since RM&S had their hands full and also had expected an automatic
renewal of their lease, there weren't too many politic smiles when I broke
the news. Fact is, it was a very unpleasant scene. Finally I called for their
lease and showed them the rider. They'd signed the damn thing, not me.
"Sorry, fellows, all I can do is maybe drag this out a little for you, mislay
the paperwork or something. Have one of your attorneys give me a call, off
the record. But I'd also advise you to start looking for space."
Then I headed downtown, a man with a mission.
Dai Nippon had to be getting ready to kick hell out of something or
somebody. Trouble was, I had no idea who or what. But I'd had plenty of
hints it wasn't going to do great things for the dollar. I briefly toyed with
alerting Jack O'Donnell and telling him to leak some anonymous storm
signals. But what storm? He wouldn't put his senate reputation on the line to
peddle guesswork, and all I had to offer was— what?—circumstantial
premonitions.
Where to begin? Henderson was in London and unreachable, meaning
there was no chance of getting him and his less reputable Washington
connections to start shouting "fire" from the rooftops. That left the press.
Right. What I needed was the media. Think. Somebody who, if the whole
thing proved to be smoke and mirrors, could shrug it off; but, a comer who
would be intrigued by the possible broadcasting coup of the century. It had
to be somebody with ready-made exposure, yet a personality with little to
lose and a lot to gain. That brought to mind the perfect candidate, a former,
well, acquaintance.

When I got home, I went straight to the office upstairs, looked up a
number I hadn't used in a long time, and dialed it. It felt very familiar.
"Channel Eight. 'The freshest news in New York.' May we help you?"
I always loved the way they peddled information as though it were
Wonder Bread.
"Donna Austen please."
"One moment please." There was a click, then another voice. "Channel
Eight news desk."
"Donna Austen please."
"Who's calling please."
"Matthew Walton. Tell her it's business, not personal." Enough please's.
"Thank you, Mr. Walcan."
"Walton."
"Thank you." On came the Muzak.
Would she do it? She used to complain how fed up she was interviewing
witnesses to car crashes. Her career needed a transfusion of hard news so
the station management would start taking her seriously. Well, here was her
shot. And since she was roughly tenth in line for the "anchor" spot, she had
no reputation of noticeable proportions to jeopardize by leaking an
anonymous rumor the U.S. was about to be shelled by an offshore battery of
financial guns.
"Ms. Austen said to tell you she's in a meeting and can't be disturbed."
Why is it some women can't just let bygones be bygones? Give me a
break, Donna. I was ready for anything, except her little bedroom games.
"How about advising Ms. Austen I'm sorry I called at such an important
time, but I have some information that might just save her and everybody
else from total ruin."
"I'm very sorry, but—"
"Just tell her, goddamit."
"One moment." No please this time.
Another very long pause. Finally I heard Donna's broadcast-neutral
diphthongs, those lower-register reverberations she'd worked so long to

perfect.
"Matt, you've got your nerve. This damned well better be quick."
"Sorry I yelled at the messenger. I'm sorry about a lot of things, but that's
not the reason I called. Donna, how'd you like an exclusive? The world as
we know it is about to end. Inside a month."
"Matt, have you been drinking?"
"No, but that's not a bad idea."
"Well, what is it you want?"
"A small favor."
"You have got to be kidding."
"Not for me. It's the country I'm concerned about. That includes you.
How about doing the U.S. a favor and leak a heavy rumor from the world of
high finance. The American dollar, dear to us all, may be about to go the
way of Confederate mustard plasters. I'll even dictate the statement for
you."
"Matt, why don't you give this earth-shaking scoop to one of your big-
shot connections down at The Wall Street Journal, assuming it's such hot
news?"
Good question. The answer, sadly, was that nobody inside the system
would want to even hear this kind of talk, let alone spread it. Everybody in
the financial community was already whistling in the dark, terrified those
Latin American debt dominos might start to tumble, taking a few of our
flagship banks along with them. And now this? No way.
"Donna, I need somebody willing to go out on a limb."
"You shit." She gave a snort. "I let you mortify me once. And believe me
that's the last—"
"Will you listen, for chrissake. I know it sounds crazy, but this is dead
serious. I've taken on a foreign investment firm as a client. I can't tell you
the name, but I'm absolutely sure the guy running it is about to screw this
country somehow. He's been shorting the bond market, and now he's going
to start dumping dollars. Billions and billions. I want to blow the whistle.

Get something on the air that'll cause a few bankers and traders to look up
from their computer terminals and—"
"Matthew, darling, how about your doing me a favor?"
"Name it."
"Simple. Don't ever call me here again. And while you're at it, tell that
asshole friend of yours, Bill Henderson, I think he's the biggest—"
"Look, I'm genuinely contrite about the scene he caused at your place. If
—"
"Good." Click, then the hum of a New York Tel dial tone.
Maybe she was right. Maybe I was seeing things. In any case, that
aborted Monday's attempted guerrilla war against Matsuo Noda. Now to
man my barricades.
Which moment coincided with the sound of Emma Epstein's key in the
front-door lock. The time, obviously, was exactly one-thirty P.M. Exactly. I
waited till she'd settled in before taking the fatal step.
"Emma, how about bringing me that file in your left-hand desk drawer.
The one marked 'Trust Account.'"
"The blue one?"
"Right. Amy's. You know it. You updated the thing about a month ago
when I switched all her money out of stocks and into money-market funds."
That move had been my one small attempt to ride Noda's horse in the
direction I suspected it was headed.
"I remember." She glanced at me disdainfully. "I also remember you
predicted interest rates were about to go up."
Which, she was tactful enough not to add, they hadn't. She also didn't
mention she had greeted my market prognosis with open skepticism. As
usual.
"Well, for what it's worth, I still think rates are headed up soon. And
Emma . . ."
"What?" She was grimly digging through the files.
"Ever think about some gold stocks for your retirement investments?
There're some mining issues I hear look good. Golden Sceptre, Golaith,

Vanderbilt . . ."
"That's Amy's portfolio you wanted, correct?" She didn't miss a beat.
"Right?"
She doted on Amy and always got very testy whenever I dabbled in the
management of my daughter's little nest egg. It's galling to admit Emma's
market instincts did at times seem superior to mine. John Maynard Keynes
once said there's nothing so disastrous as a rational investment policy in an
irrational world. Maybe he was right: could be I was shackled by too much
logical introspection. Never a problem for Emma. All I know is, if her
daughter-in-law in Jersey phoned in (on my line) that she'd just baked a
terrific cherry pie using "New Improved!" Crisco, Emma marched out and
loaded up on Procter & Gamble. And the damn thing automatically went up
ten points.
"Here it is." She placed it on my desk with a decidedly disapproving
sniff.
"Thanks."
Dear Lord, I thought, stand by us sinners now and at the hour of our
death. I went over it quickly with a hand calculator. About ninety-four
thousand. Which I figured would pay for roughly a year and a half of
college the way those already inflated costs were skyrocketing. But by the
time Noda got finished with the dollar, it probably wouldn't cover a
weekend seminar.
Maybe I couldn't save the U.S., but I was damned well going to get my
daughter through school. With fear and trembling I started calling banks.
Naturally I spread the action around town, BS'ing a lot of currency traders
and bank FOREX (foreign exchange) departments in the process. I'd buy
some pounds sterling, then . . . by the way, long as we're on the phone,
Mort, I think I might need a few million yen in, oh, say about a month. Why
don't we just save time and write some contracts now? Besides, bird in the
hand, you know. Then I'd take those pounds I'd just acquired and use them
to buy several million deutsche-mark forwards from the next dealer I knew.

How much did I go out, total? Remember, currency forwards run around
a penny on the dollar, so I effectively "sold" something like ten million
greenbacks, deliverable in one month, when I figured they'd be worth . . . it
was hard even to imagine. Most likely zilch. Since I was flying blind.
Amy's college fund bought everything. You name it, I went long. She ended
up owning futures on Swiss francs, German marks, yen, lira, pounds
sterling, Canadian dollars, even French francs. I was actually tempted,
briefly, by the peso (well, she loved her trip to Mexico last summer), a
sentimental gesture I sternly resisted.
By the time I'd finished it was four forty-five, meaning my new, ninth-
grade owner of a United Nations basket of foreign currencies had just
arrived home from her West Side private school. She always charged in at
four-thirty. I called Joanna and asked to speak to my daughter. Jo's response
to the sound of my voice was only slightly less fulsome than Donna
Austen's. Finally Amy appeared at my ear.
"Dad, how come you're calling on the downstairs phone? You're
supposed to always use the one in my room. Mom hates it when—"
"Sweetie, that line is in constant and uninterrupted engagement between
the hours of four thirty-one and eight- fifteen. It's never possible to reach
you there at this time."
"Okay, so what's up?"
"Nothing much. How about if you and I caught up on things a bit? What
do you say to dinner tonight? Just the two of us? We might even consider a
real grown-up meal for a change, no alfalfa sprouts."
"Where?" She was immediately on guard. What if she ended up
confronted with a red-tinged steak, sliced off one of the living mammals of
the earth?
"Anywhere. Someplace you've always wanted to go. My treat."
"Wow! Anywhere?"
"Your pick."
Long pause, then, "How about Windows on the World?"

"Sounds good." I guessed one of her school friends had just been.
Meaning prestige was on the line. I was right.
"Sharon's dad took her there last weekend for her birthday and it
sounded really neat. She said you can see everything. It's probably a lot
nicer than Top of the Six's."
Where, in case you hadn't guessed, I'd taken her on her birthday.
"Food's standard, but I think we can piece together a spread that'll meet
your guidelines. Will your mother let you go?" Joanna had total weekday
custody, and she played it for all it was worth.
"She's got a big date tonight. That creepy real estate guy I told you
about. The one with the new silver Saab he thinks is so hot."
"Don't tell me about it. And don't call your mother's friends creeps. I'm
sure they're all very nice."
"Want to bet? This guy is total weirdness. But she'll let me go. No sweat.
What time?"
When I was a youth, I don't remember young ladies using phrases such
as "no sweat." Probably an imperfection of memory, one of many.
"Pick you up at seven-thirty sharp. Call me if there's a problem."
"Okay."
"And Amy . . ."
"Yeah."
"Uh, think about wearing an actual dress. Not one of those experimental
East Village—"
"Daaad. I'm gonna look so straight. You'll see."
"Never doubted it for an instant."
That night I'd intended to explain that her college fund was currently
being hedged via a comparatively unorthodox investment scenario.
However, she was too busy marveling over the lights of Manhattan a
hundred stories down to give me much time to talk.
What I really wanted to tell her but somehow didn't was that I'd had this
spiritualist vision we'd been reincarnated as a couple of those crazy sheiks
at Monte Carlo—when I'm the guy who never ventures past the quarter

slots next to the door. It was as though I'd pillaged the hundred grand
carefully hoarded for her future and spread it over a giant roulette play,
stacking chips on every number on the board. Who knew where Dai
Nippon's wheel would stop, but when it did, one of them had to pay off a
hundred to one. Noda couldn't touch us. Right?
No sweat.

CHAPTER NINE

Tam was headed east in the black Nissan limo, listening to the talk. And
thinking. Seated alongside was Kenji Asano, wearing a light tan suit and
gold cufflinks, while the space opposite was occupied by two individuals
who made her very uneasy. One was the instantly famous Matsuo Noda, the
other his niece, talk-show economist Akira Mori. Noda was wearing a black
three-piece banker's suit, the perfect accompaniment to his silver hair, and
small wireless spectacles that magnified his penetrating eyes. Mori, in
designer beige, looked as if she'd just stepped from the NHK studios, which
in fact she had only a few hours earlier.
Three days had passed since Noda's Imperial press conference, four
counting today, with this sudden trip being only the latest in a series of
unexpected events. The major new twist: getting her interviews rolling was
turning out to be a lot harder than it should have been. Before leaving New
York, she'd arranged for a day with Dr. Noburu Matsugami of the
Electrotechnical Institute at Tsukuba Science City to go over the latest
progress of MITI's Advanced Robot Technology Project, now the world
leader, the undisputed state of the art in robotics. Matsugami had even
volunteered to supply introductions to the other MITI labs at Tsukuba.
Everything was set.
Except now it wasn't. When she called Friday to confirm their meeting,
Dr. Matsugami advised her that some unexpected schedule conflicts had
come up. Most apologetic. Perhaps they could try again week after next.
What's more, that was her last call for the day, because immediately
afterward her hotel phone had gone dead for five hours. Management was
strangely evasive about the problem. When a temporary line was finally
installed, it had a curious whine that made conversation all but impossible.
My luck, she thought. Japanese technology, the best in the world, breaks
down on me.

Consequently it was almost a relief to get out of town. Not the least of
reasons being Tokyo still had a hangover from all the sword celebrations.
Its streets were strewn with debris, and services remained haphazard. As
planned, she and Ken departed the next afternoon on the Shinkansen bullet
train— first class, where the porters wear white gloves and bow after
making an announcement to the car. The only way to travel. Finally some
peace and quiet after the madness of Tokyo, she'd told herself. It felt like the
Concorde, except with legroom. She leaned back to watch as the white peak
of Mt. Fuji flashed by at a hundred and forty miles per hour and chatted
with Ken, who was sitting next to her, glancing through some MITI memos
he'd brought along.
The trip down, zipping through industrial Nagoya, had helped to settle
her mind. Kyoto. For her there was nowhere else quite like it in the world.
If you knew the byways, it could be a universe away from the mania of
Tokyo. Time to lighten up. At least she had no reason to suspect Ken was
giving her the runaround. He'd seemed genuinely disturbed when she told
him about Matsugami's polite refusal to talk. Didn't say much: just frowned,
was strangely silent for a moment, then declared he'd make a few phone
calls and check into it when there was time.
Kenji Asano, she noticed, seemed to have a split personality: one for her
and one for the rest of the world. In public he was all Japanese, striding
ahead and ostentatiously barking opinions. But that, she knew, was merely
for appearances; he'd have been the object of silent derision by elders if he'd
displayed the slightest consideration for his female companion. (She
recalled that famous Japanese proverb: The man who falls in love with his
wife merely spoils his mother's servant.) Okay, she told herself as she
trailed along, when in Rome . . . Japanese men need to strut and bully their
women in public; it's the only chance they get. Everybody knows the
obedient little helpmate dutifully pacing behind garnishees his paycheck
and doles back whatever she likes.
Ken's stern, traditional public face, however, was merely one of his
many personas. Alone with her he could be as Western as any Japanese man

would permit himself. For a Japanese, of course, "Western" doesn't mean all
the glad-handing bonhomie of an American; there's always an element of
reserve. Just the same, he was nothing like the typical sexless, oblique
Japanese businessman. He had a superb body, taut and athletic, which he
knew better than to bury in some cheap off-the-rack Japanese suit. No
polyester; strictly silk and finest wool. He had a sense of style: the power
look. And he really was a widower, whose wife had died in a freak auto
crash soon after their marriage.
In short, Kenji Asano was complex, not easy to categorize.
The same went for Matsuo Noda. As she and Ken were coming down on
the train, a porter had come through the car announcing "denwa," a call for
Dr. Asano. When he returned, he reported that Matsuo Noda needed to
make a quick trip down to the famous Shinto shrine at Ise tomorrow
morning, to review the site for the new museum Dai Nippon, International
would build to house the sword, and wanted him to come along, a good
time to discuss their mutual interests.
"He always seems to know everything that goes on." Ken smiled
wistfully. "He also 'suggested' that perhaps my visiting American colleague
would like to make the trip too."
Oh, Tam thought, why me? That's not the way Japanese executives go
about things. Women aren't part of their high-level conferences.
"I don't understand this, Ken." She'd been half dozing, but now she was
coming awake very rapidly. "Seems a little strange, don't you think?"
Asano shrugged. "He just said he'd like to meet you."
"But why? What did you tell him about me?"
"Nothing, really . . ." He glanced away.
"Curious." She was fully alert now. "Then how did he . . . ?"
"Tam, don't be naive. Matsuo Noda knows who you are, believe me." He
shot her an admiring glance. "Why are you frowning? It's true. He knows
all about your work. He practically demanded you come along. He called
you—what was it?—'that brilliant American professor.'"

"You know, something about this doesn't add up." She was having her
first experience of Matsuo Noda's long arm, and she found it unsettling.
"Why not? Tamara, you of all people should know we Japanese have a
national tradition of honoring guests. Noda-san is old school, through and
through." He leaned back. "Besides, he's bringing somebody else along to
meet you. Could be very interesting."
"Who?"
He told her.
So here they were in the Dai Nippon limo, a stretch, with acres of room
and green tea that flowed till she thought she would burst. What was that
old line about the roomful of zaibatsu negotiators: the one with the toughest
bladder prevails.
Seeing Matsuo Noda in person confirmed everything she'd sensed about
him on the TV. He was a genius. Still, something about him told you that
when you sat down to cards with this man, you'd do well to cut the deck.
What really took her aback, though, was the woman alongside him, Akira
Mori.
Could be it was just her style. Tam was definitely overwhelmed. For the
trip she'd worn her softly tailored Calvin Klein suit (her only one), in shades
of pale, warm gray, and set it off with some simple, stark silver picked up
on a trip to Morocco. Perfect pitch. She looked smashing, feminine yet all
business, and Ken had told her so at least three times. All the same she
wasn't prepared for Mori's ostentatious fashion statement.
When the DNI limo appeared at their hotel, the International, Japan's
favorite TV money guru was wearing one of her severe Rei Kawakubo
ensembles, a small ransom in gold accessories, and enough makeup for a
haute couture ramp model. It turned out she'd taped an early morning
interview show at NHK's Tokyo studios for broadcast that night, then come
down directly on the Shinkansen. She greeted Tam and Ken with scarcely
more than a frosty nod. Tam found this standoffish manner puzzling.
On the other hand it did fit perfectly with Ken's quick morning briefing
on Noda's famous niece. Quite a story. According to him, her father, Dr.

Toshi Noda, had been a celebrated figure in years past. An honors graduate
of Tokyo University, he'd been the star mathematics professor of Kyoto
University when he was summarily conscripted by Prime Minister Tojo to
take charge of wartime cryptography, codes. Tojo wanted the best, and he
got it. Consequently mild-mannered Toshi Noda had been one of the minds
behind the famous Purple Machine, used for Japanese ciphers during the
early part of the war.
Eventually, however, the project became redundant. After a time Tojo
ceased to trust the Purple Machine and decided to replace it with that
famous Nazi invention, the Enigma Machine. (On that one, Ken had added
with a touch of irony, Toshi Noda was well vindicated. The Enigma
Machine code had already been cracked by the Allies long before Hitler—
declaring it unbreakable—delivered it to Tokyo.)
Toshi Noda resembled his older brother Matsuo physically, but he
differed radically in outlook, being a devout Buddhist and a pacifist. After
the stunning Japanese bloodbath at Saipan, which demonstrated the war was
clearly lost, he'd been one of those imprudent citizens who'd spoken out
publicly for peace. Not surprisingly, he was immediately placed under
surveillance by the Kempei Tai, Japan's secret police, and shortly thereafter
jailed.
After three months' internment he was released a broken man. A week
later he committed ritual seppuku, disemboweling himself for the crime of
having disgraced the family.
Toshi Noda's diaries, published posthumously and read widely in Japan,
revealed his deep repugnance for the wartime
government. He believed that Prime Minister Tojo had become, in effect, a
neo-shogun. Although the shogunate supposedly had been abolished when
Emperor Meiji took control and opened Japan in 1867, Toshi Noda saw it
restored with Tojo, another "shogun" who had come along and isolated the
country once again. Nonetheless, he'd been a man of few words. His death
poem, written only moments before he put the knife to his stomach, was as
simple and intense as his life.

Darkness upon Yamato,
Land of the gods,
Awaits the new dawn—
Ten-no-Heika.

That last was a traditional phrase that, simply translated, meant "son of
heaven." For a Japanese, though, the overtones are more; they say "the way
of the emperor."
Subsequent history proved him prescient on several points—the main
one being that militarism was a disaster for Japan. Also, he had rightly
feared that the monarchy would become an empty symbol in the ruins of
Tojo's hopeless war. Although he hadn't lived to see Tojo tried and hanged
as a criminal, he had predicted the outcome of the war unerringly—and he'd
insisted that his infant daughter be evacuated to Sasayama just before the
Allies moved in for the kill. Because of his foresight she escaped the first
firebombing of Tokyo, which converted the city into a giant death oven for
eighty thousand innocent Japanese civilians too old or young to escape.
America's pragmatic "final solution": Auschwitz with airborne incendiaries.
The rest of Toshi Noda's family was burned alive.
Afterward Matsuo Noda had complied with another of Toshi Noda's
wishes and made certain his daughter received a first-class education. Since
she had a natural instinct for economics he'd encouraged her, rightly
foreseeing it as a discipline vital to Japan in the twenty-first century. She
had excelled beyond his fondest expectations; she was in fact brilliant. As a
result he grew to dote on her, to an extent that eventually grew almost
obsessive. He'd even made her his heir, since he had none of his own. His
fortune was rumored to be in the tens of millions.
Probably the most important thing to keep in mind about
Akira Mori, Ken had concluded, was that she merely looked avant-garde.
Inside she lived in another age. In fact he suspected the reason she'd never

married had something to do with the fact she was already wed: to the
vision of Japan's powerful, sacred Imperial past.
On the trip down to Ise, Mori had silently sipped her green tea while
Noda chatted with Asano about the costs and timing of commercializing the
intelligent machines that would come out of the Fifth Generation Project.
Although Noda stuck to generalities, it was clear he was totally conversant
with the latest developments in the field. In fact, Tam found herself
thinking, he seemed to know anything there was to know about just about
everything. He displayed the same obsession with Japan's technological
future that the old-time shoguns must have had about the goings-on of their
vassals.
She also sensed that he and Asano were doing a lot of their
communicating in a verbal shorthand, enough so that she began to suspect
they had worked together before: they were like father and son, each
anticipating the other's thoughts and conclusions.
By the time they reached Ise it was already late afternoon, but Noda's
driver had phoned ahead from the car and arranged rooms for the night at
the local spa, so they wouldn't have to go back late. She noticed there hadn't
been any talk about the famous Sword, but she figured maybe he was
saving that for dinner.
The museum Noda planned was to be built outside the shrine proper, just
before you crossed the wide, arched Uji Bridge spanning the Isuzu River
that separated Shinto's holy ground from the ordinary world. The shrine
itself, a collection of thatched-roof buildings in severe traditional style, was
hidden down a long trail among giant cryptomeria trees that towered
hundreds of feet into the pale afternoon sky.
Attesting to the speed with which things can happen in Japan when
there's the go-ahead from above, the location had already been staked and
the trees cleared. Excavation for the foundation merely awaited Noda's
approval. While everybody else stood around and waited, he consulted with
the site engineer, checked over the plans, and made a few final changes. All

the while, onlookers were bowing to him right and left. He'd become,
overnight, an authentic Japanese legend.
After finishing with the engineer, he suggested they stroll on down to
pay respects at the shrine itself, since they'd come all this way. Their burly
chauffeur suddenly became a bodyguard, clearing the path ahead. Noda was
expansive now, presumably confident his niche in history was secure. As
they were crossing the wooden bridge, he casually asked Tam what she
knew about the Sword.
A one-of-a-kind historical find, she replied. Important and fascinating.
She'd seen the Emperor on TV. . . .
"I assumed you would understand its significance." He was leading the
way down the path. "Perhaps then you'll indulge me a moment for an
ancient tale about it."
By now the entire shrine had been cleared of tourists and they were
surrounded only by bowing and smiling priests in white robes: the VIP
treatment. "The Imperial sword harkens back in a way to our version of
Adam and Eve. Except, according to our own creation story, they were also
the ones who created Japan; they were the original kami."
"The original Japanese gods."
"Well, perhaps 'god' is too strong a term, Dr. Richardson. I prefer to think
of our kami as merely spirits of life." Noda shrugged, then continued.
"According to the myth, the first male and female kami stirred the sea with
a long spear, then lifted it, and the brine that dropped from its tip piled up
and became Japan."
She caught herself smiling. "I've always wondered what Freud would
have thought of that."
Mori glared at her in a way that suggested some offense at her
irreverence, while MIT-educated Ken merely stifled a grin. Noda, however,
took the quip in stride.
"Freud? Ah, yes, your philosopher. I seem to recall he's the one who
regarded almost everything as some manifestation of our sexual appetite.
Well, these are primitive stories, Dr. Richardson, that describe the beginning

of life. I suppose they should be somewhat earthy, wouldn't you agree?" He
chuckled. "Nonetheless, according to our early tales, the Sun Goddess—
whose shrine this is—was created out of the left eye, the side of honor, of
the first male kami, and the Moon God was created out of his right. Then
they ascended into the skies."
She glanced up. The Sun Goddess appeared to be headed for bed, the sky
itself barely light through the cryptomeria. The air was beginning to grow
slightly crisp.
"Now we come to the sword. When the Sun Goddess finally sent her
grandson down to rule over the mortals below, he brought with him the
three items that became the emblems of Imperial rule. They were the sacred
mirror, signifying purity, a curved bead necklace, used to ward off evil
spirits, and the sword, standing for courage. The great grandson of that first
earthbound immortal extended his dominion over all of Japan and became
the first emperor. We are told his name was Jimmu, and the legends say that
was around 660 B.C."
"So desu," Miss Mori interjected abruptly, startling even Ken. She
seemed to be lecturing directly to Tam. "We all know our Emperor today is
directly descended from him. In fact, he is precisely the one hundred and
twenty-fourth emperor after Jimmu. Japan and the Imperial line were born
simultaneously, and every Japanese is related to him. We are a monoracial
state."
Tam glanced at her. By God, she wasn't kidding.
"Well, it's possible the traditional account has reworked historical facts a
trifle," Noda continued smoothly. "Actually the peoples who became our
modern Japanese seem to have made their way here to the main island from
somewhere in the South Pacific and settled in this area around Ise. Near
here we still find burial mounds that contain replicas of their early symbols
of Imperial authority—mirrors, gems, swords."
"But the sword you found? Did it really come down from on high?" Tam
asked, half hoping to rankle Akira Mori.

"You mean was it that very first one?" Noda shrugged. "Who could
locate the original Garden of Eden? Please, we all must allow for a certain
element of poetic license in our myths. But it is unquestionably the sword
referred to in the ancient chronicles such as the Heite Monogatari, which
dates from the Heian era, the ninth through twelfth centuries. That sword
was lost in 1185, and now it's been recovered. That's all we know for sure."
Mori, walking along in her quick, Japanese-woman pace, obviously was
not satisfied with Noda's rationalist version of history.
"Dr. Richardson," she cut in again, "what the recovery of the sword has
achieved is to remind the Japanese people that we are unique. We Japanese
have a special soul, a Yamato minzoku of pure blood and spiritual unity. All
Japanese are related to each other and to the Emperor, so there is a oneness
of spirit, a blood-and-soul relation, between the Emperor and his people.
Yamatoists believe, rightly, that a temporary eclipse of our Japanese
minzoku was brought about by the American occupation, whose imposed
constitution and educational system were acts of racial revenge against
Japan. Our postwar identity crisis, our negative image of ourselves, was
created by Americans. But that time is over. Although we have no single
God, as in the Judeo-Christian tradition, we have something even more
powerful. Through our Emperor we have a line of descent that harkens back
to the beginning of our world. Perhaps we no longer choose to claim he is
divine, but that makes him no less an embodiment of Japan's special place."
Akira Mori, Tam suddenly realized, was a closet Yamatoist, those new
right-wing racist firebrands of modern Japan. Time to give her a little heat.
"Surely nobody today seriously thinks the Emperor's forefather came
down from the skies?" She turned back to Noda. "You don't believe it, do
you?"
He shrugged. "Ours is a skeptical world, Dr. Richardson. Is your pope
really infallible, or did he acquire his right to be divine spokesman by
winning a small election? Nonetheless, popes and kings are like ancient
tribal leaders. Despite all our modern democracy, we still yearn for a figure
to embody our identity. For the Japanese to have an emperor who, if only in

legend, has blood kinship with the gods who created our homeland—what
could be more important?"
About that time Tam glanced up and realized they were passing under a
large torii gate, entryway to a place that seemingly had nothing to do with
the real world. Just beyond were the shrines, reminding her somewhat of a
sanitized tropical village as imagined by Hollywood. Each of the cypress-
wood buildings, set above the ground on stilts, was architecture at its most
primal, a study in simplicity. Their polished wood was untouched by a
speck of paint, while the foot-thick blanket of woven straw comprising their
roofs had a creamy texture that looked like cheesecake. There was nothing
in the world to compare.
What really made them unique, though, was something else entirely.
Although the shrines were merely straw and natural wood, possessing none
of the centuries-old authority of the cathedrals of Europe, in a curious way
they were actually
older, for they had been rebuilt anew every twenty years since time
immemorial.
Suddenly the real significance of that struck her. What other people had
kept alive such a powerful symbol of their common heritage for centuries
and centuries? Westerners had difficulty grasping the continuity this shrine
represented. Little wonder Noda could galvanize his clan with some
powerful new reminder of who they were. Shinto wasn't a religion; there
were few rules and no payoff in the sky. Instead it was the mortar binding a
race.
"The main shrines over there," he continued, pointing to a collection of
buildings in an area enclosed by a high wooden fence, "are off limits to all
save the Emperor himself and certain of the priests. That ground is the
sacred link between our Emperor living now and those of times past. Even
photographs are forbidden."
Tam noticed that many of the gables of the buildings were tipped in gold,
burning amber when an occasional shaft of late sunlight reflected off them.
Dusk was starting to settle in, and the evening birds and crickets had begun

to add their eerie sound effects. She found herself deeply touched. What
was it about the place that inspired such reverence? Was it the serenity? The
purity?
Yes, this Shinto holy of holies possessed a secret power, the unassailable
strength of nature. It moved her; how could it not? Somewhere inside she
felt envy of them all, felt a yearning to share their absolute sense of' who
they were.
While she reflected on that, surrounded by the white gravel and golden
woods, she found herself looking anew at Ken. Being here with him at Ise
made her question once again whether in his world, his austere yet deeply
passionate world, she could never be anything but a gaijin, an outsider.

CHAPTER TEN

It was almost dark when they reached the spa, one of those vast Japanese
resort hotels catering to the middle class. It had a fake-traditional exterior
and hundreds of rooms inside, as though the Temple of the Golden Pavilion
had somehow been hollowed out and enlarged to encompass a health club.
Strangely, though, it had been completely cleared, guests sent on their way;
it was totally, absolutely empty. The parking lot was cordoned off, and
gardeners were busily clipping and manicuring the grounds. Tam was
impressed. Dai Nippon must have plenty of clout, she told herself, to be
able to commandeer an entire hotel.
The manager came out to meet Noda, deferentially bowing and sucking
in his breath, after which their few bags were summarily swept away. When
Noda returned he said nothing, merely smiled and suggested they all retire
to the big public baths on the lower level. Since the hotel was a vacation
retreat, the basement was almost entirely devoted to the one universal love
of the Japanese public—scalding water.
Down they went through the concrete hallways, attendants and staff
bobbing. The sauna-like baths, like the hotel, seemed to be theirs alone.
While Noda and Ken retired to the men's section down the corridor, Tam
and Mori entered the women's side, a cavernous tile-floored room with a
steaming pool at one end. Local women in white head-kerchiefs
immediately appeared and began to fuss over their guests, scrubbing and
rinsing them while praising the famous Noda-sama. Then, as Mori's towel
dropped away, Tam looked her over.
Good figure. She had always believed that, judged by Western standards,
Japanese women tended to be somewhat flat-chested and to have shortish
calves, characteristics the high-waisted kimono was well designed to
disguise—which also explained why a Western woman wearing one could

easily look like a buxom stork. Mori, however, had a lithe, well-
proportioned shape, and her breasts were positively generous.
The intimacy of the bath didn't noticeably humanize her however. While
they soaked and steamed, she volunteered nothing beyond a few routine
pleasantries. No more tirades about Yamatoism and American treachery, but
no informal talk either. After a polite interval Tam excused herself to go
upstairs to her room and freshen up for dinner. Mori's agenda clearly
differed from Noda's; this woman, she concluded, had a game plan all her
own. But what?
Not long afterward she heard Ken tapping lightly on the door. Just as
she'd hoped. After the hot, steamy bath, he couldn't have been more
welcome. In fact she took one look at him, pristine and elegant in his blue
silk yukata, and briefly considered undressing him right there in the
doorway—with her teeth.
He was a wonderful lover, by turns gentle and forceful, as though their
being together was some exquisite ceremony. Their lovemaking always had
a particularly Japanese quality, a heightened appreciation of the erotic,
derived no doubt from a tradition that values subtlety and sensual
satisfaction. Afterward they shared a brief soak in the little redwood tub
there in her room, then he headed down the hall to change.
Well, she told herself, coming down to Ise has been well worth the trip.
Matsuo Noda is definitely eccentric, but all the same he's a Renaissance
man by any gauge. Still, why did he want to meet me? Just to tell me
ancient fables? No, that's some kind of prelude. The real theme is yet to be
announced.
As she started putting her hair up in some quick curlers to try and
recover from the steam, she pushed aside her misgivings. Although she only
had the suit she'd worn down, intended for business, she decided it didn't
matter. Surely tonight would be informal.
She was just finishing up with her hair when she heard a frantic
pounding on the door. Very un-Japanese. Puzzling, she cracked it open.

Ken was standing there, no slippers, still in his yukata, which he hadn't
bothered to tie, all the color gone from his face. Behind him were two
uniformed hotel maids, bearing what was surely the most gorgeous kimono
she had ever seen, heavy silk with a hand-painted landscape, edged in gold
brocade.
"Tamara, I had no idea, honestly. Noda-sama only found out when we
got here, and he couldn't say anything. It was all top secret, heavy security.
They only just arrived a few minutes ago, and he's asked Noda to dine with
him." He paused for breath. "We're invited too."
"Who's just arrived?"
Asano was so nonplussed he didn't hear her. "Apparently he wanted to
review the site plans personally, tomorrow, to see where the museum will
be. I hear the Imperial Household was set against it, but he insisted."
"Who, for God's sake?" The impossible answer was rapidly dawning.
Abruptly he paused, embarrassed by his own mental disarray.
"His Majesty. Tam, we're about to meet the Emperor of Japan."
In marched the bowing maids, lots of long-vowel honorifics—they
apparently assumed the honorable Richardson-san must be America's First
Lady—and took over.
Tam knew full well that donning a formal kimono was no small
undertaking, but she'd forgotten what a major task it really could be. First
came the undergarments: cotton vest and silk under-kimono, secured twice,
once with a cord and then with an under-sash. Next was the kimono itself,
right side folded under the left and then bound at the waist with a cord, the
excess length being pulled up and folded over so that the hem just cleared
the toes. That fold was in turn secured by another waist cord, after which
came yet another under-sash. Now it was ready for the all-important outer
sash, the obi, a heavy silk strip wound around the waist twice, cinched hard,
and knotted at the back, long end up, short end down. Then the long end
was folded into a sort of cloth origami, this one a butterfly, after which it
was rolled into a makeshift tube, into which the short end was stuffed.

Finally this obi sculpture was secured with yet another waist cord, knotted
in front.
It was all done with minute precision, including the rakish display of a
prescribed few millimeters of silk under kimono at the neck, an erotic touch
for traditionalists. Finally she put on special tabi stockings, bifurcated at the
big toe to accommodate her thonged slippers.
Then they attacked her hair, brushing, spraying, adding
ornaments. The makeover took a good three quarters of an hour and even so
it was a rush job.
As the sashes and cords and cinches got ever tighter and more
suffocating, she remembered what wearing a kimono can do to your psyche.
The obi seemed designed to demolish breasts, the multiple waist sashes and
cords to totally immobilize the torso from rib cage to thigh. When Ken
finally escorted her onto the elevator she felt like a walking mummy . . .
this, she remembered, is why a lifelong kimono wearer minces along in
short, pigeon-toed steps that suggest she's been shackled at the knees.
Downstairs the kitchen had been placed on war footing, and what
awaited when they entered the tatami banquet room was the tableau for a
full-scale feast. The lacquer table was dotted with delicate rice-straw mats,
on which was marshaled an array of ancient stoneware plates and cups—
rugged black Raku, creamy white Shino, green-tipped Oribe. The kakemono
picture-scroll hanging in the tokonoma was a severe monochrome landscape
in the angular ink style of the great master Sesshu. Was it authentic? she
wondered. Where'd they get it?
After a few minutes' wait the stately man she'd first seen on TV appeared
in the doorway and began removing his shoes, surprisingly relaxed and
informal despite the Household guards standing just outside for security.
While everybody bowed to the floor, he greeted Noda—apparently they'd
met when Noda presented the sword—and exchanged a few pleasantries.
His speech was now ordinary Japanese, not the archaic court dialect of the
news conference. This was the real man. Noda bowed politely from time to
time, then turned and introduced his party.

The Emperor of Japan, Tam noticed, seemed to have an eye for the
ladies. When her turn came, he was all easy smiles, saying something about
how pleasant it was to meet such a charming American, since he rarely had
the honor. He then complimented her kimono.
After that, His Majesty took the place of highest status, his back to the
tokonoma alcove (traditionally the safest spot to be, since it was the one
location in a room sure to be backed by a solid wall), and motioned for
Noda to sit next to him on the left, the second-highest place of honor.
Then he nodded toward Tam, calling her his honorable foreign guest, and
asked if she would indulge him by sitting on
his right. She bowed back and took her place. Mori, whose own kimono
was a pattern of delicately shaded autumn leaves, was seated alongside
Noda, while Ken was placed next to Tam. As he was settling everybody, an
important ritual of prestige, the Emperor kept repeating how delighted he
was to meet a real American—his exposure to the outside world these days
apparently consisted mainly of television.
He started things off by toasting Dai Nippon, International with a saucer
of sake, after which he asked Noda to repeat for him again exactly how the
sword had been recovered. Since his late father had been an ardent marine
biologist, he loved the part about the computerized magnetometer and
pressed for all the details.
Finally the banquet got underway, course after course of a little sliver of
local seafood and an ornamental portion of seasonal vegetable, everything
on some unexpected serving piece. It was a feast of sight as much as taste.
A delicacy called mukozuke came in a black lacquer bowl, hassun on a
bamboo tray, hashiarai in a brown Raku cup, konomono in a weathered
earthen dish, yakimono on a gray Oribe platter tipped with green. The sake
pot was cast-iron, sixteenth-century, with a pale turquoise porcelain top.
They all drank from saucers of crusty white Shino ware—the Emperor's
tipped in gold.
By then Tam's legs had begun to ache. She knew that sitting in formal
Japanese style, on the heels, can eventually induce what seems like semi-

paralysis of the lower extremities. As she glanced around, she decided that
only Ken, who'd told her he was accustomed to kneeling traditional style for
hours practicing the tea ceremony, actually seemed comfortable.
Finally the table was cleared for the famous specialty of the spa, which
His Majesty had specifically requested. It was an ornate yosenabe, a lusty
Japanese bouillabaisse of artfully sculptured components, each of which
signified some episode in the fateful battle of Dan-no-ura—in fact, the very
engagement in which the sword was lost. That was eight hundred years ago,
Tam reminded herself, yet you'd think it was only last week.
They were just concluding the meal with the traditional serving of gohan
or rice when the manager of the spa entered and announced that their
special entertainer was now ready. He apologized that, although he could
offer nothing truly worthy of His Majesty, his humble spa had brought from
Kyoto a performer he hoped would not be judged too harshly. He then
ordered more sake sent in.
Although drinking more sake after a banquet's closing round of gohan is
normally judged impolite, His Majesty just smiled and thanked their
flustered host. Around went the small flagons once more, maids scraping
the tatami with their foreheads as they refilled the Emperor's gold-trimmed
saucer.
Then the fusuma parted and the evening's surprise swept into the room,
wearing an austere autumn kimono of finest silk and holding a shamisen, a
three-stringed instrument with a cat-skin face and gold fittings. Her lips
were vermilion, her lacquered wig coal-black, her face chalk. As she bowed
low before His Majesty, only one visage in the room was paler than hers.
She was, Ken whispered to Tam with great delight, none other than
Matsuo Noda's former "protégée," Koriko.
After she had bowed low before the Emperor, she greeted the president
and CEO of Dai Nippon as though he were merely another guest. He
nodded and mumbled back a reply both curt and incomprehensible. Next
she tossed a mildly flirtatious acknowledgment to Ken, who returned her
wink and toasted her with his sake saucer.

That ended the formalities, since she treated the women in the room as
though they were composed of thin air. Their presence violated all tradition,
an embarrassment that could be papered over, Japanese style, simply by
pretending they didn't exist. Tam could have cared less, while the pained
face of Akira Mori indicated she was positively relieved.
Koriko took immediate command of the room with an easy poise that
confirmed her professionalism. Tam guessed she was pushing forty but
knew that aficionados of geisha prefer talent over youth. Using a large ivory
plectrum, Koriko strummed her shamisen twice, its wound-silk strings
piercing and whiny, then began a high-pitched song from her ancient
repertoire. Tam couldn't follow the words and doubted if anybody else
could either. However, she knew it was the convention that counted. Then at
a dramatic moment two more geisha entered with a flourish and began a
classical dance, all fans and rustling silk. It was a stunning floor show for
those who appreciate slow-motion poses and flirtatiously exposed napes of
neck. Between dances Koriko urged more sake on the men, joked with His
Majesty and with Ken, and induced them both to sing a racy song. Noda,
who sat there glaring, was diplomatically ignored.
For her own part, Tam was finding this traditional "geisha party"
extremely juvenile and silly. Was this what supposedly intelligent Japanese
businessmen consider the height of refined amusement, all this fake flattery
and cajoling, mixed with not a few ribald double entendres? How
depressing.
After a few more songs and dances Koriko and her ensemble began
preparing to depart, whereupon His Majesty presented her with a small gift,
or perhaps an honorarium, wrapped in gold paper and tied with an elaborate
purple bow. In keeping with etiquette she didn't open it, merely thanked him
graciously and tucked it into her obi. She then caressed the ivory pegs of
her shamisen with reverence, saying she would treasure it forever as the
unworthy instrument that had solaced the ears of His Imperial Majesty.
With a final bow to Noda, never hinting she knew him, she backed out
the door and was gone, followed by the others. His look of relief reminded

Tam of a man who'd just walked away from a collapsing building.
Whatever may have been Tam's, or Matsuo Noda's, secret thoughts about
Koriko, the Emperor clearly had had a rollicking time. Presumably he didn't
have all that many occasions to flirt with geisha. Now slightly the worse for
sake, he began to wax pensive, turning to his American guest and offering
to provide an account of the battle of Dan-no-ura. It was a definite switch of
mood, but Koriko's traditional songs seemed to have struck a nostalgic
nerve. Or perhaps the sword had brought him a new enthusiasm for the past
he wanted to share. As he started recounting the battle, Tam smiled to think
it was like having the Queen herself brief you on that family squabble of
yesteryear called the War of the Roses.
"That battle, Richardson-san, between the Heike and Genji clans, was a
turning point in the long history of our country; it represented the rise to
power of the warriors. The shogunate." He smiled politely. "I'm afraid the
monarchy never quite recovered.
"In fact, today the crabs in the Inland Sea have a mark on the back of
their shells that people say is like the insignia of the Heike, that they
represent the fallen banners of the Heike nobles." He paused while a maid
topped off his tiny cup with more hot sake. "I suppose you've seen them?"
"Hai, miraremashita." Of course, she nodded, stretching
out her vowels to maximum politeness. She wasn't sure she had actually,
but this was no time to appear like a dumb gaijin.
"Well, after many years of fighting, the Heike nobles and the boy
emperor they were defending fled to an island across the Inland Sea. But
the Genji forces pursued them and eventually they were forced to take to
their boats once more. Finally the battle was joined. Since the Heike were
experienced sailors, they assumed they would prevail in a naval encounter,
and thus their commander unwisely elected to make his stand in the straits,
where the riptide was as quick and treacherous then as it is today. At first he
had the tide in his favor and they held the enemy, but around noon the tide
changed and was against them. Gradually the forces of the Genji
surrounded the ship bearing the emperor and the court."

His voice faltered slightly, and she realized the story was still as fresh for
him as if it had happened yesterday. Finally he continued.
"As the sad story is told in the Heike Monogatari, the court nobles saw a
school of dolphins coming toward them. They said, 'If these turn back, the
Genji will be destroyed and we will triumph. If they proceed, it will be a
bad omen.' When the dolphins continued on, even diving under their ships,
the Heike realized they were lost. And sure enough, at that moment the
Genji ships began closing in.
"Now the tragic part. The nurse of the boy emperor— Antoku was only
eight—resolved what she would do. She donned a double outer dress of
dark gray, the color of mourning, tucked up the long skirts of her heavy silk
hakama robe, and wrapped the sacred sword in her girdle. Then, taking
young Antoku in her arms, she moved to the gunwale of the vessel and
looked down at the waves. Finally she said to the men of the court, Though
I am only a woman, I will not surrender myself to our enemies. I will
accompany our Sovereign Emperor on his journey.'
"At that moment little Antoku looked up, his long black hair streaming
down his back, and asked, 'Where are you taking me?'
"Tears began to flow down her cheeks. She said to him, 'Bow to the east
and bid your farewell to the Great Shrine at Ise. Our capital will no longer
be Kyoto but a place beneath the seas, where there is no sorrow.'
"So the young Antoku, his white robes the color of the
dove, bowed east to Ise—whereupon the nurse, holding him in one arm and
the sacred sword in the other, leapt into the waves.
"Next, another woman tried to jump overboard with the casket holding
the sacred mirror, but an arrow pinned her hakama to the gunwales, and the
Genji soldiers retrieved it. All we know of what happened next is the
dispatch they sent back to the new rulers in Kyoto, which declared, 'The
former emperor is at the bottom of the sea, and the sacred mirror has been
recovered. But the sword is lost and a search is being made.'" He turned and
nodded toward Noda. "Only tonight, eight centuries later, can the rest be
told. At last, the sword has been restored to Us."

Noda bowed low and offered a toast to the Imperial line.
It was then that Akira Mori first spoke. Although she addressed her
words to Tam, they were obviously meant for His Majesty. "Richardson-
san, recovering the sword is a more important historical event than many
realize. Its loss coincided with the end of Imperial power in Japan. After
that, the emperor became a figurehead, a captive of the shoguns." She shot a
quick glance at Noda. "If the sword means nothing else, it should remind us
all that no shogun must ever be allowed to rise again."
What's she driving at? Tam wondered.
"Of course." His Majesty took up the theme. "Although there was a time
in this century when the militarists once again made a tool of the emperor
of Japan, I agree it was wrong." He looked at Mori with admiration. "The
respect your words show for the Imperial house of Yamato touches me
deeply."
While she bowed in acknowledgment, he turned to Noda. "In the same
manner, Noda-san, Japan's important place in the modern world brings
special respect to Us as well. For that We must thank you and all those
helping to fashion the new Japan,"
Tam watched Noda, puzzling. Something was going on, some kind of
coded cross-talk she didn't fully comprehend. Shogun. Emperor. What was
everybody's unspoken agenda?
At that point His Majesty rose unsteadily and announced he had a heavy
day ahead, whereupon he summarily bade everyone good evening and
exited, Imperial Household guards in attendance. Tam noticed that Mori
watched his departure with a wistful . . . worshipful, gaze.
After he was gone, a reverent stillness settled around them. Even Ken,
normally talkative, was subdued. What's going on here? she puzzled. One
thing was sure: Japan was like a magical onion, with layers to be peeled
away slowly. Each time you learn something new, yet you never really get
to the core.
When the last dishes had been cleared and nothing remained on their low
table except fresh kettles of sake, Noda leaned back and broke the silence.

She realized he was speaking to her. Matsuo Noda, it quickly came to light,
was fully familiar with her books.
But that was merely the beginning. Next, Akira Mori, who'd been quietly
waiting her turn, joined in.
"Were you moved by the story of the nurse who threw herself into the
waves, Richardson-san? The one who sacrificed her own life to honor her
ideals?"
"It was a very touching account." Tam looked at her, surprised by the
sudden friendliness. "I understand even more now why everybody's so
excited about the sword."
"Presumably you know," Mori continued evenly, "that the young
emperor's nurse was undoubtedly Fujiwara. Perhaps of low rank, but
nonetheless a member of the family that historically has been closest to the
throne."
"Of course, the Fujiwara were always Imperial retainers—"
"Have you taken no interest in that family?" Mori continued, her face
still revealing nothing.
"I . . . no, not really?" Tam studied her.
"Perhaps you should, Dr. Richardson." She switched to flawless English.
"Are you aware that your own mother was Fujiwara? In fact, it is possible
that in your veins runs the same blood as the nurse who gave her life for the
emperor that April day eight hundred years ago."
Tam felt a numbness sweep over her. She'd never thought much about
her real mother, or father. Naturally there would have been no way of
tracing him, at least none she knew. But of course there'd be full records of
the woman who bore her, then put her up for adoption. For some reason
Mori—or was it Noda himself?—had had them looked up. They'd
uncovered something about her that she herself had never wanted, for well-
examined reasons, to explore. Her adoptive parents had been all anybody
could desire. Why stir up unknowns? Besides, she believed in nurture, not
nature.
"You both seem to know a great many things about me."

Her glance shifted back and forth between them. She was surprised, yes, but
if they'd assumed she'd be stunned, they were wrong. She'd decided long
ago not to let herself care.
"Although your true mother no longer lives, you are most certainly
Fujiwara," Mori went on. "You have blood ties with the family that once
stood ready to give its life for the emperor. Therefore you may even have a
connection with the sword itself."
Noda moved in. "We also believe, Dr. Richardson, that you, because of
your work, could have a vital role in the endeavor Dai Nippon will soon
undertake. That is the reason we want to speak with you tonight."
At last, Tam thought. I'm finally going to find out why Matsuo Noda
"accidentally" happened to ask me along.
"I've been waiting to hear this."
Since the fusuma sliding doors were drawn closed, shutting out the
serving women, Noda breached conventional etiquette and reached across
the table to pour more sake into Tam's tiny Shino dish himself. Ken merely
looked on silently as Mori took up Noda's theme.
"We would like you to be part of something that would do honor to your
Fujiwara heritage, Dr. Richardson, the noble family that so long served the
emperor."
"I may or may not be Fujiwara, Mori-san, but I already have my work."
"Dr. Richardson, do hear us out," Noda interjected, pressing. "We wish
to advise you that important, even potentially disruptive events, lie ahead
for America. Very soon. And we would like very much for someone such as
yourself, a pragmatist, to be involved. Especially since, in addition to your
professional skills, you are in a position to understand the cultures, the
attitudes, of both Americans and Japanese. Your assistance could be
invaluable."
"Invaluable for what purpose?"
"A worthy undertaking, we assure you. Think of it if you will as an
attempt to prevent Japan and the West from going to war with each other
again."

She looked back and forth between the two of them, trying to fathom
what they were driving at. Then Noda continued, revealing again that
nothing had happened by chance.
"We brought you here today to Ise to remind you of the importance of
your Japanese heritage. A heritage whose sole
purpose is, like Shinto itself, the peace and ordering of the world."
"What's this all about?" She looked at Ken, in a black silk kimono,
serenely sipping his sake and looking the essence of cultivated, tantalizing
otherness. "Did you have anything to do with this?"
He carefully set down his Shino dish and smoothed his long sleeve. "I
did have occasion to remind Noda-sama that you have a unique
combination of background and expertise, Tamara, that could be very
instrumental in the realization of his objectives."
"And what are his objectives?" She looked back at Noda. "Your
objectives?"
"You, Dr. Richardson, should appreciate this better than anyone." He
studied his sake saucer. "There are things the West excels at doing, and
there are areas, I trust it is not improper to say, in which we Japanese have
demonstrated aptitude. Why should we compete in each other's spheres? It
leads only to divisiveness. We open ourselves to predators— from the
steppes of the Caucasus to the oil-rich deserts of Araby. But if we join
together, the peoples of Japan and America can achieve insurmountable
strength."
"You're talking about something that would more properly be in the
realm of diplomacy, Noda-san."
He laughed. "Pardon me, Dr. Richardson, but diplomacy is merely the
window dressing for reality. The world cares not a penny for diplomacy,
only for power. No one troubled about the Persian Gulf states until they had
OPEC and the rest of us had no petroleum. Then suddenly they were toasted
worldwide as men of great moment. That is the meaning of 'diplomacy.'
"The reason I knew you would understand the importance of Ise," he
went on, "is that, in your genes, you are part of us. You appreciate the value

of harmony, one of the first teachings of our philosophy. There must be
harmony between man and his world."
"What does that—?"
"Please, just allow me to finish. In like manner, there must also be
harmony between nations. Yet all we hear about today is friction. Usually
trade friction. Between our nations. But what can be done? The solutions
we hear talked of seem, for reasons political and otherwise, impossible to
implement. So what course does that leave? You speak of diplomacy, but
already diplomacy has been shown inadequate. Why, we might ask, is that
so? Because, as your Thomas Jefferson observed many years ago, money is
the principal exchange of civilized nations. Diplomacy comes out of
economic power. It was trade that estranged our two nations once before in
this century, leading to a conflict neither of us desired, and it is money that
creates these 'frictions' we hear about so much today. Since diplomacy has
failed, we must now find other means to bring stability and thus harmony to
both our nations."
She was tempted to ask him how all the right-wing, nationalistic fervor
he was churning up with the sword would contribute to this so-called
harmony, but instead she inquired what, specifically, he was proposing.
"The most pressing problem America has today, Dr. Richardson, is the
growing inability of your industries to compete. If I may be allowed to
generalize: America's strength has long been in innovation, but I think it is
reasonable to suggest that Japanese management has had a commensurate
share of success. So much so that we have been the subject of a flurry of
books in your country." He smiled. "Even, I should add, several very
insightful volumes written by you yourself. Also, Japanese industry has
already been part of a number of joint ventures, instituting our management
techniques in the service of America's business."
"Well, unquestionably we do have problems in our industrial sector just
now," Tam interjected. "But Japan has plenty of difficulties of its own."
"Most assuredly." He nodded. "However, as some might put it, 'the proof
is in the pudding.' I merely ask you to compare your, and our, balance of

trade, or productivity. Surely these both suggest there is truth in what I say."
At that point Akira Mori abruptly seized the floor. "You know, Dr.
Richardson, there are those in your country who are now saying your trade
problems are caused by Japan. That we should work less, save less,
squander more, just as you do. Perhaps so we will self-destruct
economically as America is now doing and no longer be an embarrassment
to you."
"That is hardly—" Noda tried to break in, but she waved him aside.
"No, this needs to be said. I am tired of hearing Americans tell us to
follow their example." She turned back. "Your media
chastise us for our thrift and hard work, while your businessmen, who are
happy enough to grow rich retailing the superior goods we make, refuse to
invest their profits in modernizing their own factories. Instead they give
themselves bonuses and Japan lectures."
At that she wound down, to the obvious relief of Noda and Ken. The
outburst seemed to pass as quickly as it had come, but it succeeded in
reinforcing Tarn's reservations about Akira Mori.
"So what exactly do you have in mind?" She looked back at Noda.
"Dr. Richardson, no one in Japan desires to see America's industrial base
disintegrate. That is dangerous for the future, both yours and ours. Yet joint
ventures and management seminars are too little, too late. We, and by 'we' I
mean Dai Nippon, are determined to make a more structured contribution."
As he laid out his plan, she realized that Matsuo Noda had decided to
play God. Still, in this world such things were possible; all it took was
enough financial clout. If anybody doubted that, just remember OPEC.
But that was the last time around. Now Japan had the money. Maybe the
oil billionaires of years past had no good idea what to do with their
winnings, but Matsuo Noda had a very precise idea indeed.
The one remaining problem: he needed Tamara Richardson.

CHAPTER ELEVEN

In the aftermath of that evening down in Ise, Tam was convinced of only
one fact. Nobody was giving her the straight story. Not Noda, not Mori, not
Ken. And when she tried to talk supercomputers with MITI officials at the
Kyoto conference.
she again sensed she was hearing a runaround. Suddenly all she could get
was Japan's public face, that version of reality Japanese executives call
tatemae, superficial and soothing assurances, intended to promote the wa,
harmony, so desirable in human affairs. When Japan doesn't care to give
answers, hai no longer translates as "yes." It just means "I heard you."
Even more troublesome was the question of Ken. As best she could tell,
he was merely a reluctant accomplice in Noda's grand design. But why was
he going along with Dai Nippon if he was as apprehensive as he seemed?
Ken, she concluded, knew a lot more about Matsuo Noda than he was
saying.
So instead of giving them all an answer outright, she decided to spend a
few days analyzing what she'd managed to piece together so far. As Noda
had couched his proposition, it was simple: he was offering her a chance to
do more than merely write prescriptions for America's economic recovery.
She would guide it.
One thing, Matsuo Noda was no proponent of half measures. The way he
laid out his scenario, it was visionary . . . no, revolutionary. After thinking
over his proposal for a week, she still wasn't sure whether he was brilliant
or a megalomaniac. Dai Nippon's program could conceivably change the
course of world history, and the prospect of being at the helm of its
juggernaut was seductive. All the same, what if Ken's hints were right?
What if Noda did have something much grander in mind, something
impossible even to imagine. When you ride the whirlwind, who's really in
charge?

In between her visits to the conference she spent some time at DNI's
Kyoto offices getting acquainted with Noda's operation—the computers,
fiber-optic links, analysts. Very impressive. Although Dai Nippon was
technically only a shell corporation, all Matsuo Noda had to do was pick up
a phone to have at his disposal the expertise of any one of a hundred
Japanese corporate brain trusts. Half of Japan's new high-tech movers, it
seemed, owed him some kind of "obligation." Given that, and all the
money, he could well be unstoppable.
Also, the austerity of Dai Nippon's offices reminded her once again that
none of Japan's new power was accidental. The discipline of the samurai. It
was almost as though this country had been in training for centuries,
toughening itself through self-denial and work-as-duty to be ready for an
all-out economic blitz. Now, finally, Japan had an edge on the entire world.
More technology and more money.
Was Noda about to just give away that edge? The implausibility made
her certain something was missing.
Late that Friday, the conference over, she and Ken packed their bags and
checked out of the International. But after they'd shoved their way through
the usual pandemonium in the lobby and hailed a cab, he gave the driver the
name of a place on Shinmonzen Street, the antique district. Not the train
station. When she tried to correct him, he waved his hand and said he'd
arranged for a surprise.
"Tam, the International always leaves a bad taste in my mouth. It has
nothing to do with Japan. It could be anywhere, just like some Hilton next
to a freeway." He smiled and lightly patted her hand. "Let's not go back to
Tokyo just yet. Please. This weekend let's stay at a place where nothing will
exist but you and me, not even time."
"Just turn off the clocks?" Sounded like a great idea.
"Well, now and then it's nice to turn them down a bit, don't you think?"
He laughed self-consciously. "That's a contradiction about me you'll
someday have to get used to. I like a high-tech office, but when I'm away I
prefer to be surrounded by things that are very, very old." He leaned back.

"Indulge me. Let me show you my favorite spot in all of Kyoto. A place
time forgot."
This is going to be quite a trick, she told herself. Very little was left from
years past. Maybe the city hadn't been bombed out during the war, but the
blitz of urban renewal was rapidly accomplishing much the same result.
Through the light of dusk, construction cranes loomed above the few
remaining thatched roofs of neighborhoods about to be overwhelmed by
steel, glass, cinderblock.
Kenji Asano, it turned out, deplored this immensely. As they rode along,
he pointed out the latest construction sites with the sorrow of a man
documenting the end of civilization.
"This, we hear, is the price of progress. I'm always tempted to ask,
progress toward what?" He leaned back with a sigh and lit a Peace cigarette,
nonfilter. "Someday I think we may have to ask ourselves if this modern
world we've created for ourselves was actually worth the toll it's taken on
our sensibilities."
Eventually their taxi pulled into a narrow side street, edging past a few
women carrying small bundles of groceries bound in scarves, then easing to
a stop before the ramshackle bamboo gates of a place that seemed
abandoned to foliage and vines.
The driver helped carry their bags in through the gates and up the rocky,
hedge-lined pathway leading to a wooden veranda. Ahead was a thatch-
roofed, weathered house shrouded by towering elms. As they approached,
an elderly woman in a dark kimono emerged from the recesses of the
interior. She sang out a welcome, bowed deeply, and produced two pairs of
leather slippers with an air of ritual solemnity. They were expected.
Off went the street shoes, on went the slippers as they melted into a
world that would have been perfectly natural four centuries ago. When they
passed the "lobby"—off to the side, tatami-floored, with a few ancient
screens scattered about—Tam noticed that there appeared to be no "desk."
But there was also no "check in"; the proprietress clearly knew the
honorable Asano-san. She also must have known he was with MITI, since

her honorifics soared into the upper reaches of politeness as she guided
them along the interior hallway.
Tam realized they were in a traditional Japanese inn, a ryokan, surely the
last vestige of classical Japan. As they moved out onto another veranda, this
one circling a central garden and pond, the place appeared to be totally
empty. The woodland vista in the center hinted of infinity, with stone paths
and a wide pool dotted with shapely rocks. Although there were a dozen or
so closed doors along the wooden platform, the inn seemed to be there
solely for them. In the cool dusk clumps of willows across the pond masked
the view of the other side, furthering the illusion that they had the place all
to themselves. It couldn't be true, though, since chambermaids in kimono
darted here and there balancing lacquered dinner trays.
When they reached the end of the veranda, their hostess paused before a
set of shoji screens, knelt, and pushed aside the rice-paper covered frames
to reveal a room entirely bare except for a low lacquer table. Well, not
quite: on the back wall was the traditional picture alcove, tokonoma, in
which a seventeenth-century ink-wash scroll hung above a weathered vase
holding three spare blossoms. Their room had no keys, no clocks, no
television. It was a cocoon for the spirit, a place of textured woods, crisp
tatami, lacquer, and rice-paper.
The woman deposited their bags on the black-bordered tatami, consulted
briefly with Ken concerning dinner, then backed, bowing, out of the room,
leaving them alone together in another time.
"Ken, this is perfect. I needed someplace like this."
"We both did." He embraced her. "They're running our tub now.
Afterward I have another surprise for you."
"What?"
"Allow me some mystery."
Whatever he had planned, she couldn't wait to throw off her clothes, don
a loose cotton yukata robe, and pad with him down to the little wood-lined
room where their steaming bath awaited. The floor was red tile, the walls

scented Chinese black pine, the massive tub cedar with rivulets of steam
escaping through cracks in its cypress cover.
While they perched on little stools beside the tub, he soaped her back,
occasionally dousing her with the bucket of lukewarm water. Then she did
the same for him, watching half mesmerized as the soapy bubbles flowed
off his shoulders, broad and strong. Almost like an athlete's. Finally they
climbed in, and amidst the cloud of vapor her last remaining tensions
melted away.
"You know, I think of you every time I come to Kyoto, wanting to lure
you back." He reached for the brush and began to gently massage her neck.
"I honestly never dreamed Matsuo Noda would come along and try to hire
you." He paused. "I wish I could help you make your decision. But the most
I can do is warn you to be careful."
What are you telling me? she wondered.
"Ken, you seem troubled about something. What is it?"
"Tamara, powerful forces are at play here, beyond the control of either of
us. Things may not always be what they seem. Just be aware of that. But
please don't ask me any more. Just look out for yourself."
"I've had a lifetime of looking out for myself. I can handle Matsuo
Noda."
"Just don't ever underestimate him. He's not like anyone you've ever
known before. The man is pure genius, probably the most visionary,
powerful mind in the history of this country. You've met your match."
"That remains to be seen." She leaned back. Ken was challenging her
now. On purpose? Maybe he figured that was
the only bait she would rise to. He wanted her to play along with Noda, but
he wouldn't tell her why.
After they'd simmered to medium rare, heading for well done, they
climbed out, toweled each other off, slipped back into their yukatas once
again, and glided back to the room. She noticed that an interior screen had
been pushed aside, opening onto another tatami room where a thin futon
mattress had already been unrolled and prepared with white sheets and a

thick brocade coverlet. Hot tea waited on their little lacquer table, but their
bags had disappeared. She checked behind a pair of sliding doors and saw
that all her things had been neatly shelved by some invisible caretaker. Even
the clothes she'd been wearing were already hung in the closet.
"Now for my surprise." He was slipping on a black silk kimono. "They
have a special little garden here that only a few people know about. I've
arranged everything."
"Shouldn't I change too for whatever it is we're doing?"
"Theoretically, yes. But formality doesn't suit you." He cinched his obi.
"Come on. You can be formally informal."
He led the way to the end of the veranda where they each put on the
wooden clogs that were waiting. Then they passed through a bamboo gate
into yet another landscape, this one lit by candles set in stone lanterns. At
the back stood a small one-room structure of thatch, reed, and unfinished
wood. A teahouse.
"Tam, can you sit here for a second, in the waiting shelter?" He indicated
a bench just inside the gate under a thatch overhang. "I'll only need a few
minutes to prepare."
Off he went, clogs clicking along a string of stones nestled in among the
mossy floor of the garden. He was following the roji, the "dewy path" that
led to the teahouse half hidden among the trees at the back.
Unlike the ryokan’ s larger garden, this one had no water; it was meant to
recall a mountain walk. The space was small, with natural trees, offering no
illusion of being more than it was. But it was a classic setting for tea, a kind
of deliberate "poverty." While she watched the flickering stone lanterns and
listened to the night crickets, the cacophony of Kyoto could have been eons
away.
Finally Ken appeared beside the doorway of the teahouse and signaled
her forward. As she moved along the stepping stones, she noticed that the
pathway had been swept clean of
falling leaves, after which the gardener had strewn a few back to give it
wabi, an unaffected natural look. The art of artlessness, she thought, as she

paused at a stone water basin to rinse her mouth from its bamboo dipper,
part of the preparatory ritual.
The cha-no-yu or "tea ceremony," she knew, required almost a lifetime to
master completely. It was a seated ballet of nuance and perfect clarity of
motion. One awkward gesture and its carefully orchestrated perfection
could be spoiled. She hoped she could remember the rules well enough to
get it right.
Ken was already seated across from her, tending a small charcoal brazier
sunk into the tatami-matted floor. From its light she could just make out the
room's rough-hewn timbers, the straw and mud walls, bark and bamboo
ceiling. A small calligraphy scroll hung in the tokonoma alcove. As he
beckoned her formally to sit, the room was caught in an unearthly silence,
the only sound the sonorous boiling of the kettle.
Ken was profoundly transformed, almost like another being. Warm and
attentive only minutes before, now he was part of a different world, solemn
and remote. The black silk of his kimono seemed to enforce the seriousness
in his dark eyes.
She watched as he ritually wiped a thin, delicately curved bamboo scoop
with a folded cloth, first touching the handle, then the uptilted end, after
which he balanced it atop the lacquer tea caddy. Next he lifted the tea bowl,
an earth-tone glaze that shifted from mauve to brown as he rotated it in his
hand and wiped the rim. Finally he swabbed the bottom and positioned the
bowl on the tatami in front of him. Now the utensils had been formally
cleansed. He was ready. From the tea caddy he spooned a mound of jade-
green powdered tea and tapped it into the bowl. Then another, this last with
a carefully prescribed twist of the scoop.
Next he extracted a dipperful of boiling water from the iron kettle and
measured a portion into the bowl, lifted the bamboo whisk sitting inverted
beside the bowl, and commenced a vigorous blending. The tea immediately
began to resemble a pale green lather. Still no words, no sound save the
whir of his whisk intruded upon the quiet of the room. It was a moment
hundreds of years old, framed in silence.

The economy of ideal form. That, she found herself thinking, was what
this was all about: how flawlessly could you perform what seemed the most
simple, humble act. And he was good. Whereas the mastery in his hands
revealed itself by the control with which he whipped the tea, the rest of his
body remained taut as a spring. Total discipline. Each tiny motion was
distilled to its crystalline essence.
At last, when the green froth was ready, he gave the whisk a final half-
turn, then set it aside. Next he lifted the bowl, rotated it in his hand, and
placed it on the mat beside the open charcoal fire.
His part was over. It was as though the authority had been passed. Ken
had prepared the work; now it was her turn to take up and finish it. Her role
was different yet required its own kind of skill.
She bent forward and ceremonially shifted the bowl a short distance
toward her. Then she scooted backward on the tatami and again moved the
bowl closer. Was she doing it right? The flicker in Ken's eyes said yes.
Finally, with a bow of acknowledgment, she raised the bowl in both
hands and brought it to her lips. After her first sip she bowed again, then
drank it down as he watched in silent approval. The powdered green tea was
harsh and bitter, just as she remembered from times past. Even for a
Japanese it was difficult to feign appreciation of the musky beverage
produced in the cha-no-yu.
She recalled what was next. With deliberate dignity she extracted a small
napkin from the obi of her loose yukata, wiped the rim of the bowl, and
placed it carefully onto the tatami in front of her. The motion had to be
quick, spare. Ken didn't try to disguise his pleasure; she had passed some
sort of crucial test.
And she told herself, he had too.
Together they had joined in one of the most demanding yet exquisite
bonds two people can share. At that moment she felt—was it imagination?
—like an ancient Fujiwara, celebrating some age-old tradition. . . .
The ceremony was over now. She bowed again, then lifted the bowl to
admire the light crackle in the glaze, the slightly inturned lip.

"It's Raku. I think it's the finest I've ever seen."
"From my collection. It's by the hand of Chojiro, the seventeenth-century
Korean who was in the employ of the Shogun Hideyoshi." He smiled. "I
had it brought down to Kyoto especially for tonight. For you."
"I'm honored." She was.
After she had admired the rest of the utensils—the remaining formality
of cha-no-yu—they both relaxed, their minds purged, their spirits attuned.
Like the ceremony itself, the moment was esthetic and sensual.
"Tam, this has been a wonderful rebirth for me, being with you again.
You've helped revive in me so many feelings I'd almost forgotten. The joy
of it all. Who could have known?" He leaned back and reached for a flask
of plum wine. Formalities were definitely over. "As someone once wrote,
'Love. Its roots are deep. Its source unknowable.'" He was pouring two
small glasses.
"That's from the Tsurezuregusa, fourteenth century. Right?"
"Again you amaze me. You really are Japanese."
"I like the poetry."
"Then you know, Tam, our poets excel in feeling. We've always
celebrated emotion over logic." He smiled. "Which one said, 'Love is the
passion in the heart of man—those who will not listen to reason'?"
"What does reason have to do with love?" She took a glass. "Didn't
Shakespeare say 'love and reason keep little company together'?"
"My turn. That's from Midsummer Night's Dream, which was . . .
sixteenth century. You're pulling out the moderns on me." He laughed with
delight. "You know, in Heian times, eight hundred years ago here in Kyoto,
I'd be expected to make a linked verse about the night now." He looked out
the doorway, then back. "How about . . .

The moon in veil,
Perfumed with night,
Who can deny love
At a time like this?"

Then his visage quickened, another mood switch. His eyes mellowed as
he turned and carefully lifted the bud from the vase behind him. It was a
camellia, purest white. He held it before him as he turned back, its long
stem still dripping.
"You know, there's a haiku by Basho I love very much. Let me give it in
Japanese . . . a haiku only sounds right in the original.

time ga ka ni
notto hi no deru
yama ji kana."

She paused to let the meaning sink in, to feel that open- ended sensation
a good haiku always sends your imagination spinning off into. "How's this
for the English?

With the scent of plums
on the mountain road—suddenly,
sunrise comes."

"Not bad." He glanced at the blossom in his hand. "I don't know why, but
the camellia makes me think of you." He rotated it carefully, then looked
back. "Let's dedicate tonight to our own sunrise."
He inspected the flower again, then impulsively leaned forward and
placed it onto the tatami in front of her. Next, with the same control in his
powerful hands that had touched the glaze of the tea bowl, he gently
gripped the shoulders of her loose yukata. She felt her body flush with
warmth as slowly, gently, his strength once more held in check, he carefully
slid back the cloth off her shoulders until her breasts were free. Then
plucking a petal from the bud, he reverently brushed one nipple, then the
other.

It was an erotic game she knew he loved, one of many. Games.
Sometimes she had imagined them inhabiting an eighteenth-century
shunga, those woodblock prints picturing lovers in what she had once
thought impossible embraces.
He'd once declared that the kimono was actually the most sensual
garment in the world. Take a look at some of the shunga, he said, and the
possibilities become obvious. Though it seems cumbersome, entangling, yet
it lifts away like a stage curtain to invite all sorts of dramatic possibilities.
The human nude is only interesting when half concealed.
Games. She reached and took the petal from him, then ran it along the
silk of his own kimono, over his muscular thighs as he sat, Japanese-style,
feet back. Next she lifted away the silk from the flawless ivory skin she
knew so well. She drew it along his thighs to tease him.
"Tam . . ." He reached to slip away her yukata, but she
caught his hand. Then she touched his lips with her fingers, silencing his
protest. She pushed away his kimono and trailed the petal upward, lightly
brushing his own nipples. Finally she pushed him gently backward and
smoothed her cheek against his thigh, drawing back his kimono even more.
The glow of the coals was dying now. As the last shadows played against
his face, she laid the petal on the tatami and moved across him. . . .
They lingered till the moon was up, then strolled back through the
garden wearing their antique wooden clogs. The air was scented, musical
with the sounds of night. Later that evening they downed an eight-course
meal off antique stoneware plates, drank steaming sake on the veranda, then
made love for hours on the futon.
Around midnight he ordered one more small bottle of sake, a go, and
suggested they move out onto the veranda again, this time to watch the
moon break over the trees. She slipped on her yukata and padded out. She'd
just decided.
"Tamara, I want to tell you something." He poured her small porcelain
cup to the brim. "You are everything Matsuo Noda is seeking. The way you

held the tea bowl tonight, tasted the tea. The cha-no-yu doesn't lie. You have
discipline, our discipline. That's very, very rare."
"You mean, 'for a gaijin'?"
"For anyone. Besides, I don't think of you that way. You are one of us
now."
She looked into his eyes, dark in the moonlight. Then she remembered
the tokonoma alcove in the teahouse where a rugged vase had held the
single white bud, its few petals moist as though from dew. Not a bouquet, a
single bud—all the flowers in the world distilled into that one now poised to
burst open.
Kenji Asano lived that special intensity, that passion, which set Japan
apart from the rest of the world.
"Ken." Her voice was quiet. "I'll do it."
"You mean Noda?"
"Noda."
He said nothing for a moment, then finally he spoke.
"The game begins."

CHAPTER TWELVE

Over the last three weeks I'd spent long hours on the phone handling
Matsuo Noda's new hedging in the currency markets. The play started out
modestly, but as his Eight Hundred Year funds became bloated with cash, it
grew into an avalanche of speculative positions.
His guiding principle was to keep a low profile in order not to spook the
markets, same as any good trader would do. Whenever the FOREX desk of
one market-maker bank on his list would start getting nervous, I'd just hit
the next place in line. Finally after everybody on this side of the ocean
began backing away, he went international. Zurich, in particular, loved the
action and took everything he threw in its direction. I guess the Swiss are
used to high rollers, since their financial casino never got cold feet and
invented a house limit.
Somewhere along the way I also came to realize I couldn't possibly be
the only agent in his employ; there was far too much money to move. Also
my list of contracts eventually got pared to manageable levels, so somebody
else had to be picking up the slack. It appeared that just as I was spreading
the action he'd assigned to me all over the globe, he was spreading his own
assignments worldwide. The man had to be covering a major chunk of the
world market in interest-rate futures and currency forwards, but not a penny
of it was traceable to Japan. Or to Matsuo Noda.
How, I kept marveling, could this be happening right under the nose of
all our supposed geniuses of world finance? One thing, Noda had all his
moves down pat. My hunch was he'd started routing a lot of short selling
through Sydney and Hong Kong, and also was hitting the off-exchange
"third market," anyplace he could find somebody to take his bets. If you
remember how the dollar plunged in the mid-eighties, you'll also recall that
anybody who'd had the foresight to dump it in advance would have been
sitting pretty. Plenty of traders did, but none of them received any particular

attention, since the pond is so huge. In cumulative totals the currency
exchanges worldwide easily handle as much as two hundred billion dollars
a day. Although DNI's massive short position clearly signaled that
somebody major was anticipating a crash of the dollar, Noda realized that
all he had to do was keep moving and nobody would put it together.
Need I add that my own little dollar hedge for Amy was peanuts
compared to what was going on now. Dai Nippon through its anonymous
agents was dumping American currency in the multi-billions worldwide,
but since Noda kept the action spread out, nobody bothered to notice the
pattern. Ditto his awesome "naked" shorting of Treasury futures. I mean,
anybody who'd troubled to assemble the numbers could have predicted
somebody up on the bridge must have sighted a reef dead ahead. I kept
trying to warn traders I knew, both on and off the exchanges, but nobody
wanted to hear downbeat speculation from some Cassandra. They were all
too busy pocketing commissions and ordering more champagne.
And then it happened. In broad daylight. I'll explain the operative details
shortly, but if you were there, that could be a little like reviewing the theory
underlying nuclear fission for somebody standing at ground zero when the
bomb hit. So first let me recollect how it felt down in the trenches.
I was breakfasting at the dining room table downstairs that particular
Monday morning—November 7, as we all remember so vividly—when
Matsuo Noda dropped the first shoe, or maybe it's more accurate to say he
began loosening the laces. I'd just finished squeezing some orange juice
when I punched in the number of a financial update service on my trusty
cordless phone, mainly to hear the (recorded) sound of a human voice. I'd
totally forgotten the U.S. Treasury was holding its quarterly refunding that
day.
Newsbreak. Dealer banks were reporting that demand for the long bond,
the thirty-year, was extremely soft to nonexistent. Equally unnerving, there
wasn't any noticeable interest in Treasury's ten-year notes either. The reason
seemed to be that the usual heavy participation by major Japanese

investment houses (typically twenty to forty percent of the total) had
inexplicably evaporated. In fact, a rumor currently flying across
the floor of the Chicago Board of Trade said a number of Japanese
securities houses and banks in New York had begun what appeared to be a
program to divest their current Treasury holdings massively. Since
spokespersons at Japanese outfits like Nomura and Daiwa Securities had
clammed up, refusing to deny that rumor, the usual institutional buyers like
Oppenheimer and Goldman, Sachs were holding back, nervous.
Hang on, I said to myself. Can this mean we're about to test out
Henderson's "worst case" scenario, that Japanese pullout all the analysts say
could never happen? But there's no reason. No sudden icebergs out ahead. .
..
Noda. I said the word out loud. Noda's kicked off his play.
I almost laughed at the thought of his naivete. Was this going to be his
game? Who was he planning to fool? For once you've got a little surprise in
store, chum. Treasury may have to sweeten the pot, but there's a lot of
money in the world. The United States of America can't be blackmailed.
Then I glanced out at the blue morning sky, empty except for a single
swooping sparrow, and had a strange premonition, one of those mystical
moments when everything sparkles with crystalline clarity. I had this
feeling I can't explain. Still in a reverie I carefully set down my orange-
juice glass, walked upstairs to the "office," and dialed one of the computers
into Reuters's Wall Street service. How were the securities markets taking
the news? It was already ten-thirty, time enough for some initial response.
Dear God. For a second or so I just stared at the numbers in disbelief.
What was happening? Noda hadn't gone near the stock market.
I quickly switched on the TV and located CNN, which was already
carrying a special report live from the floor of the New York Stock
Exchange. There stood a badly shaken Lou Dobbs, minus his tie. Minus, in
fact, his jacket. The scene around him was pandemonium.
". . . and the Dow Jones Average . . ."—he glanced down at a monitor
—". . . has dropped six hundred and eighty points in the last twenty

minutes. . . ." At that moment somebody jostled against the cameraman,
giving us a momentary view of the ocean of paper buy-and-sell slips
littering the floor. "A hundred and ninety million shares have already
changed hands in the first half hour of trading this morning. ..."
My God, I thought, the market is in free-fall. Was Meltdown Monday in
'87 just the warm-up?
"As yet unconfirmed rumors concerning a slow foreign response to
today's Treasury auction . . ."—although he was weighing his words
carefully to give the appearance of calm, the hasty makeup on his forehead
was already beginning to bubble with perspiration— ". . . seem to be
responsible for what most analysts are describing as an entirely
inappropriate overreaction in securities prices here this morning. ..."
What else could he say? It was as though everybody's gnawing, primal
fear had just been confirmed. There really was a hairy beast lurking in the
bedroom closet, waiting to jump out and eat us in our sleep. The market was
running to mommy: safe and soothing cash.
Next he made the tactical error of buttonholing a couple of floor traders
and specialists for comments. They didn't bother to mince words. Their one,
terrified question: Had Japan finally decided to let the U.S. and its towering
debt just twist slowly in the wind? If that happened, U.S. capital would
simply dry up, sucked in by Treasury's massive money-sponge: interest
rates would soar, murdering the U.S. economy. The Great Depression of the
nineties.
As I watched, a bulletin started running across the bottom of the screen:
bids on the new issue of thirty-year bonds had now dropped an amount
equivalent to raising their return almost two full interest points. I zeroed in
as the text continued. Worse news. The "coverage ratio," which measures
how many more bidders there are than necessary, had plummeted from 2.7
to 1.3. And still dropping. More and more potential buyers were running for
cover.
Lou, who was now surrounded by traders in blue jackets and couldn't see
his own monitor, was assuring his viewers that experienced market analysts

were all saying the slowdown in Treasury action did not accurately reflect
worldwide demand, that deutsche marks and pounds sterling undoubtedly
were already winging westward to take advantage of the new higher rates.
Sweating there in his melting pancake, the poor guy had no inkling the
patient was slipping into a coma just as he'd forecast full recovery.
Well, I thought, there's always prayer. Anything's possible. But . . . as
Henderson used to say, if frogs had wings, they wouldn't bump their ass.
I got up to go downstairs and pour another cup of coffee. Coming back, I
decided to forget about the stock market for a moment and just focus on
Treasury, so I clicked on my Telerate service and scrolled through the
financial quotes.
Friends, by that time there was no, repeat no, market out there for
Treasury paper. Now that the Japanese dealers appeared to be dumping
everything, European banks had hit the sidelines, waiting to see what
transpired. Would rates continue to move up? Would Treasury be forced to
withdraw the issue? Should everybody be bailing out now before bond
prices went through the deck and demolished years of interest earnings?
Looming over it all was that standing terror of the bond markets: no
liquidity.
Back to Cable News Network. An officer from one of the dealer banks
(which bid on big chunks of Treasury paper, then retail it) had rushed over
to CNN's midtown studios and was explaining to us all it was clearly
nothing more than some minor trans-Pacific communications snarl. The
problem, obviously, was simple: Japanese securities firms here just hadn't
received authorization from their head offices in Tokyo, where it was after
business hours. A clarification would be forthcoming any minute now.
Well, if you've ever been turned down for a mortgage and you fantasized
a day when you'd see that high-and-mighty clerk behind the desk have to
ask you for a loan, I hope you caught that one. This paper-shuffler whose
secretary had a secretary had agreed a week earlier to take on three billion
dollars of Treasury's new debt issues—paper he now couldn't give away, let

alone resell—and he was practically on his knees begging America to save
his bank.
What the hell was going on? My mild-mannered friend Matsuo Noda
had inadvertently (I assumed) kicked off a major financial panic.
I clicked the dial over to Financial News Network, FNN, which had
momentarily interrupted its heavy midday fare of California snake-oil-and-
options hucksters. Now a decidedly pale investment banker, this one an
unindicted employee of Drexel Burnham, was declaring it was all merely a
little "tempest in a teapot." His precise words. The Japanese securities
houses wouldn't dare pull out their funds and kill the market, he explained.
It was absurd. If they did that, their investors would lose a fortune, since
any big sell-off would automatically drive down the value of their own
massive portfolio. Ergo, Japan's funds had no choice but to stay invested.
No problem.
My friend, I thought, where have America's bankers been? Out
repossessing some widow's Chevy? As a matter of fact the Japanese outfits
here don't give a flying fig what happens to our debt market. If you'd been
doing your job, you'd know that Matsuo Noda had already sold Treasury
futures far in excess of Japan's portfolio back when values were still high.
Now he can go out and pick up all the notes and bonds he wants, cost
approximately nothing, and turn around and deliver them at yesterday's full
price. The man must feel like a riverboat cardsharp who's lucked into a
saloon full of Huck Finns on payday. Don't you realize he's just cleaned you
out, right down to the fillings in your teeth? And now he's got his team on
the bus ready to roll.
Over to CBS, a Special Report underway. It featured a stream of well-
meaning and incoherent Treasury officials, none of whom had the slightest
inkling what to say. Then Jack O'Donnell came on from the Senate
pressroom, breathing fire. The administration's "light at the end of the
deficit tunnel" had turned out to be a freight train heading our way, just as
he'd predicted. America's debt chickens were coming home to roost. He was

demanding that the Speaker call a joint session of Congress this very day
and by God do something.
Right, Jack. What? Looks like our pal Matsuo Noda is about to have the
U.S. of A. exactly where he wants us. By the balls.
I guess I must have been operating solely on instinct by then, because a
phone number popped into my head that I hadn't recalled in years. Sam
Kline, my old broker at Merrill Lynch. I hadn't talked to Sam in ages, but
his number used to come to my fingers whenever the market started acting
up. Maybe he was sort of a father figure. Truth is, I'd first learned what little
I know about the market watching that giant ticker ML had up at one end of
the office just above Sam's desk—and long gone in this age of computers. I
remembered how heavy trades—over ten thousand shares—were marked
with stars, always fun to watch.
Forget the "financial experts." They were reduced to spouting pure
gibberish. Time to check in at the real front line. Sam Kline.
Maybe I just wanted to have Sam to soothe me like in the old days, pour
some of that dreadful coffee he had in his Thermos, tug down the cuffs of
his trousers, and say not to worry, there's always tomorrow, the disaster in
my portfolio merely reflected a long-overdue and healthy "correction" in
the market. (Only years later did I finally realize that "correction" was a
special Wall Street expression meaning all the stocks you own just tanked.)
When Sam finally got around to my call, he was barely coherent but still
trying.
"Matt, what's new?" There was turmoil and yelling behind him, as
though the office was about to go under a wrecking ball.
"You tell me."
"Well, at the moment it's something of a downside morning, but—"
"Sam," I snapped, "this is me, Matt, save the Pollyanna."
A short pause, and then he crumbled. "Matthew, want the truth? The
Monday Massacre of '87 was a rally compared to this. That crash was just
stocks. This time it's U.S. bonds, the dollar, everything. The market's falling
apart. Right this minute the trust departments at First Boston and Morgan

are dumping entire sectors like they were some nervous greenhorn in
Oshkosh. Pension fund managers I've known for years are liquidating whole
blocks 'at the market,' for whatever they can get. One specialist downtown
just told me he had to eat a hundred thousand shares of, Christ, General
Dynamics. You can't give away Northrop. And Lockheed, forget it. . . ."
Another pause. "God Almighty, Matt, we need a market up here. How about
—"
"Not now, Sam." It was like hanging up on my own father. A knife in my
heart. "Look, I'll get back to you. Best to Naomi."
Good God. I wanted to hire an airplane and skywrite a big sign over
downtown: WAIT. Trouble was, I wasn't sure myself what it was all about.
However, there was one thing I could do. I punched in the contact
number for Dai Nippon, uptown, and told the polite little lady who
answered the phone to get Tanaka on the line this goddam minute. About
ten seconds later he was there.
"Are you guys nuts?" I yelled. "Doesn't anybody up there know what's
happening?"
"We are well aware of the situation, Mr. Walton."
"Well, then, do something, for chrissake!"
"Our securities dealers here are in contact with the appropriate officials.
Nothing is to be done without explicit instructions from Noda-san. He has
not yet been in communication."
"Well, get him in communication."
"There is no cause for alarm, Mr. Walton." He continued calmly. "Noda-
san has made sure that our dealers' exposure in Treasuries is covered by the
futures contracts DNI has acquired. Japanese investors are sheltered from
price fluctuations. Noda-san is most grateful for your—"
"Listen carefully," I said. "Fuck Noda."
I hung up.
The rest of the morning I just sat there and watched the market crater.
After bond futures prices on the Chicago exchanges had sunk the daily
limit, as far as they could drop in a single session, the action merely moved

elsewhere. A cash market developed off-exchange worldwide and was
going crazy, with spot quotes nose-diving. Prices now were only rumors,
but the satellite services were still trying to track them. At exactly 12:37
P.M. the President finally got around to issuing an Executive Order
suspending all trading at the exchanges in government bills, notes, and
bonds, including futures contracts, until further notice. It turned out to have
been about as effective as Prohibition. Besides, by that time I figured Noda
had already cleared at least fifty billion.
Enough. I couldn't watch anymore. All of a sudden I felt like a guy
who'd bailed out of his flaming F-16 only to see it total a schoolhouse. I
kicked off the computer, slipped on a suede jacket, and headed for Bleecker
Street to fortify myself with mussels marinara and a stiff Bloody Mary. The
early Post at the corner newsstand proclaimed with characteristic
understatement the imminent passing of the civilized world.
Over cappuccino I finally started to think rationally. Nothing anybody
was saying added up to a full picture. There had to be more, or less, to the
story. . . .
Then the truth glimmered before my eyes, yet another transcendental
moment. What Noda was planning was obvious. At last I realized why he'd
hired me. Like a great chess player, he could see about ten moves ahead.
The question now was no longer what his next move would be. It was
when.
You want to win World War III with a quick blitzkrieg, knock America to
its knees? Simple. Go for the blind side. First you short a piece of the debt
market, then for fun you dump the currency in advance (since it's just
naturally gonna go the way of the peso when you make your opening move,
and you might as well squeeze the orange if it's just lying there anyway).
Next you kick things off by giving everybody the impression you're
divesting all Treasury paper, which causes the dollar to predictably
plummet….
Christ! What about Amy's currency hedge! Three weeks ago I'd
contracted to sell the banks of New York ten million dollars she didn't own.

In all the pandemonium, I'd completely forgotten.
I threw down a twenty for the lunch and literally raced around the corner
to look for a pay phone on MacDougal. When I finally found one that
worked, I shoved in a quarter and dialed the FOREX desk at Citibank for a
dollar quote.
Henderson was right. Paper money is predicated on trust. It seems that
when the second largest industrial nation in the world apparently doesn't
think enough of the credit rating of the first largest industrial nation in the
world to loan it two cents, then talk about the full faith and credit of said
first largest, etc., doesn't cut much ice. The Fed was out there buying dollars
and dumping marks and yen and pounds in the billions to try and keep the
dollar afloat, but nobody else in the Group of Five—those countries
supposed to step in and buy each other's faltering currencies to prop them
up—was lifting a finger. In spite of our treasury secretary yelling fire and
damnation, all they'd done was announce an evening meeting in Paris.
Period. What, they inquired, had the U.S. done lately to help out France,
West Germany, Britain, or Japan?
Behind our allies' diplomatic and not-so-diplomatic posturing lay a
simple, rhetorical question: Who needed passage on a sinking ship? At the
moment the only thing governments around the world wanted less than U.S.
Treasury debt was U.S. greenbacks. I'd contracted to swap ten million of
them for other currencies back when they were worth a dollar. That
afternoon I settled with bills worth eighty cents and sinking. That's right.
Amy's college-fund hedge cleared two mil.
And if you think Miss Amy Walton survived the dollar's crash intact,
what about Matsuo Noda, now holding tens and tens of billions in world
currency forwards?
What didn't prosper that Monday was a state of mind called Wall Street.
By mid-afternoon all the market indexes were down by half; exchange
trading had been halted in a good two- thirds of the Dow stocks; a major
brokerage house had frozen accounts and announced Chapter 11; and gold

futures were soaring. The October crash of '87 was now a nostalgia item,
remembered as a few sessions of light trading with a hint of downside bias.
A lot of investors went to cash, but most switched into money funds
(what else could they do?). While sophisticated players were shorting the
stock indexes and futures, the newsletter gurus—who charged two hundred
dollars a year for hot tips about equal in worth to those of a New York
cabbie—were calling their major clients. A big sell signal was emblazoned
in the streets of lower Manhattan. Everybody assumed the situation was
temporary, but nobody needed to ride the ship down. By the closing bell the
Dow had sunk over eleven hundred and fifty points. And don't forget, the
DJ Average represents blue chips; prices for over-the-counter outfits like
Widget-tronics Inc. just packed up and headed south for the winter.
The way I figured it, Noda was probably more or less on schedule. By
nightfall the stock exchanges had blood on the floor, a dollar was worth
roughly two-thirds what it had been at sunup, and the U.S. Treasury
couldn't have panhandled a nickel anywhere in the Free World.
I've mentioned Jack O'Donnell a time or so previously, the Columbia
University professor turned politico. Jack was the junior senator from New
York: Irish idealism goes to Washington. I'd gotten to know him reasonably
well, thanks mainly to a series of rubber-chicken dinners I'd pitched in to
help him with.
Needless to say, O'Donnell's well-known attitude toward fiscal sleight-
of-hand in the corporate sector had made raising money on Wall Street a
decidedly uphill endeavor. His Insider of the Month award was especially
unpopular. That was a large gold-plated screw, suitable for mounting, which
he regularly bestowed on any corporate board members who'd just
happened to dump big blocks of their personal holdings about a week
before a disappointing quarterly report sent their company's stock price
through the floor. For some reason Jack never seemed to buy their
collective "Gee, we had no idea" explanation.
Jack always assumed that corporate managements would walk off with
anything not securely riveted to the floor. He also believed most of the

corporate takeovers these days were about as helpful to America's
competitiveness as masturbation was to population growth, a viewpoint I
tended to share—which is one reason why I helped him raise money from
time to time. More than that, though, I admired him immensely. The man
was a real samurai. Unfortunately, however, he was his own worst enemy
half the time when it came to soliciting campaign checks; he could never
understand why executive dining rooms weren't necessarily the optimum
terrain to start raising hell about shareholders' rights. I once sent him a dog
muzzle for Christmas after he pulled just that trick at a CEO fundraiser I'd
carefully set up in one of those private suites atop the World Trade Center.
He'd been especially busy this session. When he did come to New York,
he spent most of his time up at the West Side apartment of a female aide of
his, where they reportedly were polishing a lot of position papers these
days. Monday, however, he had only one thing on his mind: how to keep the
U.S. monetary system from going belly up. Trouble was, he had no idea
what to do. Naturally he immediately canceled his subcommittee hearings
for the day—an inquiry into how charge cards and the banks touting them
(loving those wonderful loan-shark rates) were lofting consumer debt to
dizzying heights. That afternoon he began working on a speech for the
Senate floor, a hellfire preachment intended to shame the administration
into some kind of action.
After thinking about it awhile, he'd decided that, since all the
nervousness in the market was traceable to an apparently total Japanese loss
of confidence in U.S. government obligations, he'd have his staff call
around concerning what other Japanese moves were underway. He had
questions such as: If they're pulling out of Treasuries, are they dumping
corporate bonds too? Real estate? Where in blazes is it going to stop?
Simple questions, maybe, but tough ones to attack on short notice, given
the clampdown at the source. So his people started making calls, and finally
one of them got hold of Charlie Mercer, an Executive VP at Shearson.
Purely chance. Did Charlie happen to know any big Japanese players in
town?

Well, yes and no, replied Charlie. Strictly off the record, one of his
biggest personal clients lately was an attorney here in New York, who
always paid with corporate checks bearing the logo of a Japanese-sounding
outfit. But it was a purely private arrangement and he was sure . . .
The staffer immediately told him to please hold while she switched the
call to Senator O'Donnell.
Actually I'd known Charlie for years, and I also knew the poor guy's
wife had some kind of esoteric bone cancer that meant ten thou a month in
radiation therapy. So I'd let him set up an account on the side and do some
full commission churning in the name of one of Dai Nippon's dummy
fronts. Why not?
Then Jack came on the line. "Mr. Mercer, am I to understand you've been
handling heavy trades for a Japanese firm?"
"Nothing illegal about that, is there, Senator?" Charlie was growing
nervous, suddenly seeing himself under the hot glare of TV lights in Jack's
finance committee. "Truthfully, the man I actually deal with is an American
attorney here named Walton."
"Matt Walton?" roared Jack.
"You know Matthew, Senator?" inquired Charlie, stunned by the sound
of the august public figure abruptly bellowing in his ear.
"Know him? I may kill the prick for not talking to me sooner."
Approximately five seconds after this conversation my phone erupted.
"Tell me, Judas," he yelled, "is it true you're helping them out? I want the
goddamn truth and I want it now."
"Jack?" I finally recognized the voice. "Helping who?"
"You know who, you fucker. Our good friends the goddam Japs, that's
who. They're—"
"Jack, calm down a second," I interrupted. "It's just possible this whole
thing is some kind of scam. Not at all what it seems."
"Talk to me."
"Not over the phone. Client confidentiality. But if you're coming up
anytime soon, I'm mad enough to give you a full rundown of all I know,

strictly off the record."
"I'm scheduled in on the six o'clock shuttle. Where can we meet?"
"How about the club? I promise you an earful."
"The Centurion?" He inquired sourly. I knew how he hated it.
"Jack, wouldn't kill you to rub elbows now and then with an actual
capitalist. Don't worry. There won't be any photos to sully your reputation."
I suggested the place partly to pay my respects to a wounded ward after
the day's carnage and partly for Jack's convenience. It was a combined press
hangout and "new money" convocation, located just around the corner from
his New York office in one of those old mansions right off Fifth, midtown.
They'd just begun allowing the fair sex to cross their hallowed doorstep
(after a lawsuit), a move certain diehards felt signaled the curtain raiser on
the West's Decline. For my own part I'd actually put up Donna for
membership as pan of the test case. We eventually established that the
Centurion's unwritten membership criteria were actually pretty simple: in
addition to being white and male, you also needed to be either rich or well-
known. Being all four made you a shoo-in.
A couple of us fortunate enough to have friends on the circuit bench
called in a few favors and arranged for a black, female judge to hear the
case. The proceeding was over in time for lunch.
"Is eight okay?"
"Done," he said. "I'll be there on the dot."
He was late as usual, but I managed to pass the time. It was enough just
to sip a Perrier and observe the shell-shocked faces of golden boy brokers
presently mainlining martinis down the bar. Fortunately the place was on
the ground floor so nobody could take a dive out a high window, but the
crowd had all the insouciance of hookers working a Salvation Army
convention. I checked over the room—lots of designer suits topped off by
long faces—and wondered how many millions had been dropped that day
by those present. Booze was flowing across the mahogany bar as if there
were no tomorrow. Maybe there wasn't.

At a quarter to nine Jack O'Donnell marched up the blue marble steps, a
man in from the war front.
O'Donnell was a big guy who looked every inch a senator, right down to
the thirty-dollar haircut and the eight-hundred-dollar suit. I think it was his
overcompensation for being Irish and being crapped on by the Columbia
University administration most of his days. A so-so academic, he'd
blossomed as a politician—firm handshake and steel eye—and had easily
devastated the smooth-talking Long Island party hack the big money had
thrown against him. The man was a straight shooter who believed the
purpose of capitalism was to make a better place for all Americans, not
merely enrich the unscrupulous or crafty few. As a result, his Senate
harangues were a lonesome cry in the
takeover/arbitrage/leveraging/executive-perk wilderness. His contempt for
overpaid investment bankers was exceeded only by his disdain for overpaid
corporate CEOs.
Anyway, we settled into the leather chairs of the back room while he
ordered a medicinal Scotch, double. After his nerves stabilized a bit, I
suggested he let me give him an informal rundown of what little I knew.
"High goddam time." He grimly extracted a notebook.
"Jack, here's the mea culpa. I now confess before God and you that I've
been a very uneasy point man for an outfit that calls itself Dai Nippon,
International. They have been playing a little game with interest-rate futures
and currency forwards in quantities that stagger the mind. Thus far,
however, their activity has been strictly legal and right out there for
everybody to watch. I also tried to warn anybody who would listen.
Consequently any of our financial analysts who didn't see this brouhaha
coming a mile away has been suffering a severe rectal-cranial inversion."
He snorted and pulled at his drink. "Okay, since you seem to know so
much about this Dai Nippon outfit, care to clue me in on what's down the
road?"
"Jack, I think the answer is one nobody's figured." Then I delivered my
brand-new theory.

He stared at me skeptically, sipping at his drink. "Good God, you've
gone off the deep end, Walton. I always assumed it would happen
someday."
"Jack, from what I hear, none of the big Japanese securities dealers here
will even pick up their phone. What does that tell you? They're softening us
up using the weapon the market dreads the most. Uncertainty. What better
way to terrify the Street? Christ, let somebody start a rumor the President
has a toothache, and they practically have to shut down trading."
"Matt, nobody's going to believe your crazy scenario.
Matter of fact, I don't either. It's too wild. I'll tell you what most people are
saying. All the news shows tonight hauled out our doomsday economists,
Lester Thurow and his ilk, to declare we had this one coming. The
consensus going around is the Japanese are finally fed up hearing us
bellyache about trade barriers; so they've decided to treat us to a pointed
demonstration concerning exactly who needs who. That's all. Japan now
controls America's destiny. But since a few people here still have the idea
we won the last war, Tokyo just wants to make sure we get our history
straightened out."
Could be, I answered. But I still thought everybody was missing the
forest for the trees. Then I went on to describe Noda's building, his high-
security computer setup. Nobody would install an elaborate headquarters
like that merely to get your attention.
He listened in uncharacteristic silence, beginning to appear a little more
convinced. "Well, let's run with your cockamamie theory a second." He
rattled his ice cubes, a habit of his I always found distracting. "Say
something bigger is coming up, and this is just the pre-game warm-up.
What can we do?"
My suggestion, that the President close down all our financial markets
immediately to keep Noda's hands off them, was not received
enthusiastically.
"You want me to stand up in the Senate and propose that?" His already
ruddy cheeks were beginning to redden even more as he glared around the

paneled room. "Matt, I'd be tarred and feathered by every stockholder in the
country."
Maybe so, I said. But what about Noda's vast Third Avenue nerve
center? His supercomputer? The Uzis? It had ominous portent. "Tell you the
truth, Jack, I'm not even sure I should be talking to you. After what
happened today, that guy scares hell out of me."
We ran through the known facts a couple of times more, not getting any
closer to agreeing on the big picture. Finally he summed up his own fears:
"In my view, we weathered the October '87 crash because the Fed still had
some control over liquidity. When money started disappearing out of the
market, they just printed more. They countered deflation with inflation, kept
the dollar in balance. This time, though, we've lost all three pillars under
our financial house—stocks, bonds, and the dollar. There's nothing the
government can do to stop this one."
At that moment there was a tap on my shoulder, and I looked up to see
Eduardo, the club's recent attempt at Hispanic affirmative action, handing
me a cordless phone. Then I remembered I'd set up things downtown to
forward calls to the bar. The next sounds in my ear were the mellifluous
profanities of Dr. William Henderson.
Bill had just gotten off a plane after spending a few days loosening up at
the Sandy Lane in Barbados, assaulting its reserves of Sugar Cane Brandy,
and he was mad as hell. His "Georgia Mafia" had been caught flat-footed.
Why hadn't I warned him that the Japs had scheduled this move? Surely I
must have had an inkling. He would have shorted the market and scored a
pile.
I suggested he calm down, that nobody, me included, had seen it coming.
What's more, I had a strong feeling it was all—
"What the hell's next?" Bill continued, oblivious. "What's Noda saying?"
"Nothing here but speculation. He's probably getting his beauty sleep at
the moment. But take some of your own advice, friend, and stand clear. I've
got a feeling there's less here, and more, than meets the eye. Don't, repeat,

don't get the idea you can outguess Matsuo Noda. I think he's pulling a
number, but—" "
Bill interjected something brief and unrepeatable and rang off,
undoubtedly headed for consolation.
"Was that Henderson?" Jack asked, then watched me nod. Bill had
pitched in to help Jack out of a few tight spots on the money front, in
appreciation of which O'Donnell had proposed him for the Council of
Economic Advisers—and shortly thereafter forfeited all credibility with the
administration. These days he couldn't have gotten into the White House on
a VFW tour. "Well, the man's got no idea when to keep his mouth shut with
the press, but he's nobody's idea of a fool. What does he think this is all
about?"
"Sounds like he's just studying the tea leaves like everybody else."
Jack sighed, then rattled his cubes some more. "Well, if Henderson can't
figure out what's going on, then nobody can. That in itself ought to tell us
there's a patch of slippery ice down the road. My own guess is the Japanese
have decided to play a little poker with the American markets without
having the damnedest idea of the consequences."
"Jack, what if they do?"
After we sat there gazing at the gilded plasterwork ceiling for a while,
we started getting caught up on old times. He inquired what I thought the
press would do to him if he married one of his staffers. My guess was that a
photo of Washington's most eligible divorce veteran at the altar once more
would probably make the cover of People. Everybody loves a lover. That
possibility seemed to cheer him up a bit.
It was round about then, probably close to ten-thirty P.M., that another
call came through. This time I already had a feeling who it was, and I
momentarily considered not taking it. But then, why not let O'Donnell have
the story straight from the source.
The caller was, of course, Matsuo Noda. It must have been late morning,
Japan time, after a very long night.
What, he inquired, was my on-the-spot reading of the scene?

"I don't know." The phone had that same funny whine I remembered, as
though he had a private phone system worldwide. "Maybe you should be
telling me."
Noda-san, no surprise, didn't seem particularly unsettled by the
developments.
"I assure you there is no cause for alarm, Mr. Walton. The situation may
seem temporarily unfortunate, but I have long believed all things turn out
for the best."
"Could have fooled me. But while we're all waiting for the silver lining
to this cloud, you could do everybody a favor and get your goddam
securities dealers here to issue a statement clarifying their intentions."
"Mr. Walton"-—he chuckled—"you ascribe far too much influence to
me. I am merely a banker, one of many in Japan. I have no control over
what our institutions choose to do or not do."
"I wish I could believe that."
"Well, I suppose there are many things about Dai Nippon that need to be
explained more fully. I look forward to seeing you next week. We can talk
then."
Upon which he advised me just to sit tight. All further communications
would be routed through their office uptown. And with that dictum in place,
he suddenly had better things to do and said thanks for all my help. There
was the sound of some satellite bleeps, then silence.
Welcome to the Brave New World, I thought. Again I had this definite
feeling the DNI rodeo had just begun.
By then Jack was nearing terminal exhaustion. I passed along Noda's
cryptic refusal to lift a hand, advised him to make a statement tomorrow
that the U.S. financial markets could be dangerous to everybody's health,
and helped him into a cab for his aide's place uptown. The evening was
fizzling out with nobody left at the bar but regulars. Thus I went home
alone to check in with Amy and then drift off into a very unsettling dream.
My nightmare was over by morning. America's was just beginning.

CHAPTER THIRTEEN

Funny thing about investor confidence: often as not it relies more on
faith than facts. Give it a little unsettling heat, and it can just melt away.
Belief turns to fear, then blind panic.
Insight number two: the bigger you are, the more scared you tend to get.
So what appeared to be a sudden Japanese loss of conviction regarding the
U.S. Treasury's ability to meet its standing obligations received close
attention from the world's bankers, from Zurich to Hong Kong. The
Japanese securities outfits just kept dumping, and nervous phone inquirers
from locales as diverse as the White House and Red Square were all
advised that everybody was "in a meeting and will get back to you." As a
natural consequence the world's major financial players succumbed to a
terminal case of nerves.
When the bond markets finally reopened on Wednesday, Treasury's
thirty-year issue had scooted up four full interest points. There was still a
market for Uncle Sam's IOUs—everything on this planet will move for a
price—but buyers were wary. They wanted their newly perceived risk
sweetened considerably.
Predictably rates on corporate and municipal bonds did a similar tango
north, leaving America's conservative investors wondering what hit them. In
fact, a lot of scheduled corporate debt offerings were scuttled to await more
settled times and lower rates.
The dollar also stayed on the critical list. Everybody was worried the
U.S. Treasury might just rev up the printing presses to produce enough
greenbacks to pay off all the foreigners who wanted their money back.
Since Paul "tight money" Volcker—who probably would have thrown his
robust torso onto the ink to prevent that from happening—was now gone,
there was nobody at the Fed with a real commitment to holding back the
flood.

And the stock market. People weren't starting to call this Black
November for nothing. A lot of players feared that the higher rates would
hobble the economy, a perfect excuse to head for the exits while the getting
was good. As Henderson liked to observe: psychology is a fundamental too.
The next day the Dow sank another two hundred points; the day after that a
hundred more. (Where had those sellers been two days before?) The fourth
and fifth days it slowed, heaved an audible sigh of exhaustion, and sort of
peered up out of the bunker to see if the bombing runs had let up. The
downward pressure was still evident, but it was finally losing some of its
steam.
Yours truly did a lot of thinking as the week wore on, while the country
appeared to wobble on the brink of unprecedented disaster. I also conferred
now and then with Jack O'Donnell and with Henderson in between their
appearances on TV chat shows. Although Bill's bearish reading of the
nation's estate had been vindicated well beyond what even he had
envisioned, I can report he took small pleasure in his newfound celebrity;
he was increasingly miserable over his own missed opportunities in the
financial casino. Jack, for his part, had gained a profound appreciation of
the helplessness of government to intervene when fear and greed seize the
marketplace.
My personal ruminations on the situation turned out to be too
Machiavellian for anybody to entertain seriously. Question: If you wanted
to pull all your money out of the U.S., is this how you'd do it? Answer: No
way. Instead you'd go about it gradually, a little at a time, in order not to
stampede the markets and cause exactly what was happening now.
Ergo, I concluded, this isn't real. Noda just wants every
investor in the world to assume there's a Japanese pullout underway.
But why the grandstand play? Sure, he'd made a pile, but he didn't seem
like a guy who had to sweat his mortgage payments. Nor did this kind of
market manipulation require a building in midtown Manhattan and a
computer setup to rival NORAD headquarters. Something more had to be

coming. And the only thing I could think of was that Noda's something had
a lot to do with my profession.
This was not a welcome piece of prognostication to loose upon the
world. Since the financial markets already had plenty of problems on their
plate, there wasn't all that much interest in speculating about the next
course. Consequently nobody made the slightest attempt to man the
ramparts for what was ahead. Our financial battleship had been stopped
dead in the water and its engines disabled, but nobody was even bothering
to prime the guns. This couldn't be an all-out attack. Right?
Wrong. The stage was now set for Noda's real move. The following
Saturday I was summoned to Dai Nippon's midtown fortress where I
watched my crazy theory become reality. Before anybody in our shell-
shocked financial centers had time to digest what had happened, Matsuo
Noda—his Dai Nippon Eight-Hundred-Year funds underwritten through a
syndicate of Japanese banks and insurance companies led by the Dai-Ichi
Credit Corporation, Ltd. of Tokyo—hit the beach.
In the days to come I did manage to assemble a rough outline of how
Noda pulled off his brilliant opening feint. It was elegant, and to savor it
fully requires a quick peek at his reserves—Japan's bankbook.
Start with personal savings, the hundreds of billions being squirreled
away by individual Japanese. Then add to those monies the assets of
Japanese pension funds, private savings organizations with several hundred
billion dollars to lend out. Next come insurance companies and
corporations, similarly awash in loose cash. Taken together, the total
amount of excess capital in Japan is now well over five trillion dollars.
If all those zeros befuddle you as much as they do me, try thinking of it
like this: a trillion dollars is the size of the annual U.S. budget. So if the
Japanese regulators opened the floodgates and let all that money roll, its
citizens have the ready bucks to finance our government's entire budget—
Lockheed, stockpiles, and pork barrel—for at least five years using just
what's in their mattresses.

As it happens, all this Japanese cash has become an important, nay,
indispensable, component of the American financial scene. We and the
Japanese are like an old married couple: they're the wife who scrimps and
saves, we're the husband who borrows and squanders. The middlemen who
rifle her purse and ship the proceeds to us are, increasingly, Japanese
investment firms.
At least half a dozen major Japanese securities dealers with offices in
New York run big bond departments. The foremost of these is, of course,
Nomura Securities International, the world's largest brokerage house
(having aced out Merrill Lynch). With over two hundred billion dollars in
customer accounts, Nomura is now a primary dealer in U.S. Treasury
issues, meaning they can buy directly from the government and sell to their
clients. And since Treasuries pay several interest points better in return than
Japan's miserly savings accounts, their customers back home think they're
getting a terrific deal. Little wonder Japanese investors finance a full third
of America's budget overdrafts these days.
Another major player is Daiwa Securities America, which also
underwrites federal paper on its own. Nor should we overlook Nikko
Securities and Yamaichi Securities, both handling money in the tens of
billions. These outfits and others are well past the beachhead stage of entry
into the world capital markets. They're entrenched; they're big; and they
know how to play hardball. Were they involved in Noda's assault? Nobody
ever knew for sure. But you figure it out.
Banks. As it happens, the biggest one in the world is Japanese. The Dai-
Ichi Kangyo Bank, Ltd. of Tokyo has unceremoniously reduced Citicorp to
second banana. Rounding out the top five worldwide are Fuji, Sumitomo,
and Mitsubishi. And worldwide means everywhere. Japan controls ten
percent of the U.S. banking business, a quarter of all British banking. Of the
ten largest banks in the sovereign state of California, four are Japanese.
Japan in brief has become banker to the world, with more ready money than
anybody else, and it also has a battalion of financial samurai who know the
game.

What makes these Japanese players especially powerful is the kind of
bucks they represent. It's called hot money—cash lent out short-term and
therefore subject to immediate withdrawal. Instead of tying up their
overseas bankroll for years, they stick to offshore investments that can be
called in tomorrow. At home Japan invests for the long horizon, but abroad
the bulk of the money is short. Hot money.
Since foreign investors normally pick up well over half of a given
Treasury refunding, the paralysis when Japan began recalling its hot money,
thereby spooking buyers worldwide, was as predictable as the sunrise.
Matsuo Noda didn't have to be a Rhodes Scholar to realize how much
mileage there'd be in a big Japanese sell-off program and a "no comment"
from his dealers.
Here's how he orchestrated the details. Apparently it had all been very
Japanese, very consensus. A few phone calls, then a lot of meetings over
green tea. Later on, some late nights with sake. Noda, thanks to his new
clout, had been in the driver's seat from the start. The money managers in
Tokyo were all feeling the heat over demands by investors that they
participate in the multiple Eight-Hundred-Year funds he'd floated. All
across Japan people were starting to ask whether their savings were out
there waving the flag too. A lot of those managers were starting to get edgy,
so Noda thoughtfully struck a deal, a little consensus.
Okay, hold your monies, but let's get organized. When the next Treasury
collection plate comes by, don't roll over any more short-term U.S. T-bills
and don't take a piece of the next sale of long bonds. In fact, that's the day
you begin to divest. Staggering losses? No problem. I just happen to have
everybody's portfolio insulated with futures contracts. Sell away, and even
when the price plummets, nobody's gonna lose a yen. In fact, you can have
a piece of the currency windfall I've set up. Apparently everybody shook
hands on it, or whatever they do in Japan nowadays.
Consequently none of the big Japanese houses in New York had to take a
lot of risk. The sellers were covered by Noda's rate contracts, which I later
discovered he'd passed along (at cost) to anybody who needed them. The

rest he sold himself for a hefty profit. So in the course of his play, he
incidentally raised several billions in additional operating capital for Dai
Nippon while fully protecting the home team.
When the dust had finally settled, it turned out he didn't actually
liquidate very much Treasury paper after all. He didn't need to. In fact Japan
dumped only about eight percent of its
holdings. If you think about it a minute you realize they couldn't possibly
have hoped to divest everything they had in dollars. What would they do
with all that cash? Loan it to Brazil?
Veterans of world finance will tell you there were already precedents for
this kind of Japanese muscle. Back in the mid- eighties, Nomura Securities
had unsheathed its financial sword and totally controlled the Eurobond
markets for about a fortnight. They were just letting everybody know they
were in town. So there was nothing particularly unprecedented about a little
number whereby a handful of Japanese banks and securities firms could, by
concerted action, bring the U.S. financial system to its knees.
Although I'd been convinced from the very first that Matsuo Noda had
engineered the whole move, I had no hard proof. Besides, what was I
supposed to do? No laws were broken. He was playing strictly by the rules.
So I just took cover like everybody else and watched the marketplace
disintegrate. My main preoccupation was a growing suspicion that Noda
was now moving up his battery of guns for the next round of shelling.
I was right. His Treasury sell-off had merely been a demonstration of
firepower. Its effectiveness must have given confidence that his beachhead
was secured, since he came ashore at the end of the week to take personal
command of the real landing.
He and his general staff hit town quietly and with no fanfare on
Thursday, spent Friday in a strategy session, and on Saturday took over the
computerized command HQ on Third Avenue. That afternoon Tanaka called
and ordered me (very politely but curtly) to assemble my records and come
uptown. The operation was being consolidated and Noda-san wanted me
coordinated. From now on I would be working out of their offices.

This was it. Just what I'd been waiting for. At last I could confront the
bastard, one-on-one. No way was I going to be part of the big assault I saw
directly ahead.
My first look at the revised operation uptown confirmed my worst fears.
The technical analysts had been replaced by a new set of troops: money
men. Open collars were gone, supplanted by a lot of business-school types
wearing thin black ties. Tanaka's office had been moved off to the side; the
corner office now belonged to Dai Nippon's four-star commanding general:
Matsuo Noda. After I'd cleared security, that's where I was led.
"Mr. Walton, how good to see you again." He looked up from a printout,
his silver hair perfectly groomed. "I do hope today is convenient for you."
"This is going to be brief." I ignored the chair he rose to adjust for me.
"I'm only here to advise you that my participation is officially terminated as
of this moment. I'll be sending you a final invoice next week. You can find
yourself another attorney."
"But your work has scarcely begun." He appeared to be mildly puzzled,
as though I'd just made a small misstatement about the weather or some
such. "We expect your participation to be crucial."
"Surely you're joking." I was turning to leave.
"Mr. Walton." He shifted the printout around and shoved it across the
desk. "Contrary to what you may presume, we are here to help this country.
You might wish to look over our program for the near term."
"This I've got to see." I came back and studied it for a few seconds . . .
then stared back at him.
"Impossible." I finally realized he was serious. "Whatever you're
thinking, I'll tell you right now you don't have a chance. These outfits have
lawyers. Hundreds of them."
"Ah, but that's why you are on our staff. This is your specialty." He
smiled. "Remember the Book of Five Rings by the swordsman Miyamoto
Musashi? In it he describes the three kinds of attack. There is the Ken no
Sen, where you move first and catch your opponent unprepared; next is the
Tai no Sen, whereby your initial move occurs a split second after your

opponent's; and finally there is the Taitai no Sen, in which you and he attack
at the same instant. What has happened up until today might be likened to
the Ken no Sen. We have made sure that nothing was anticipated. Very
soon, however, we will have to move to the Tai no Sen, responding with
lightning speed to the moves of those who would thwart us. Miyamoto
Musashi declared correctly that if you are attacked with force, you must
counterattack with even greater force and thereby upset momentarily your
opponent's rhythm. That moment can mean victory, but only if you are
totally prepared." He leaned back. "We must be totally prepared."
"Why in hell would I want to help you? I guess you didn't hear me. I've
just resigned." I turned for the door. "Besides, nobody could pull off what
you're planning. You're going to have battalions of attorneys moving against
you."
"I expect that." He stopped smiling. "But that area is your responsibility
now, Mr. Walton. A good swordsman does not think, he acts. Intuitively."
"And if I refuse?"
"You cannot possibly."
"Try me."
"Only you can handle this, Mr. Walton. Betray us, and you may well
witness the disappearance of America as an industrial nation. The time is
now or never."
That zinger gave me pause. He meant it. But before I had a chance to tell
him he was completely crazy, he went on to sketch out what he claimed was
his objective. How he planned to address the American "crisis" and resolve
it.
Let me tell you my first impression of Matsuo Noda's scenario. It was
legal, it was legit, and it was—as Joanna's teenage niece used to describe
notable phenomena—totally fucking awesome.
What's more, he wanted me to stay on as tail-gunner. The truth? I felt the
disorientation of a kid who'd been fooling around in the Soap Box Derby
suddenly being handed a slot in the Indianapolis 500.

The most astonishing part of all was, I had the feeling he just might pull
it off.
You're right. I should have said no, not on your life, this is way out of my
league, never in a million years. . . .
Instead I said I'd think about it.
Good, he said. Why didn't I stick around till Monday and get a feeling
for the operation?
I didn't shake his hand. I just walked out and poured myself a cup of
green tea from the huge urn there in the middle of the floor. Walton, you
idiot, how did you get yourself into this?
Which is when I spotted a sporty looking lady way across on the other
side of the floor, over by the climate-controlled NEC mainframe.
Something about her seemed vaguely familiar. Definitely not DNI staff.
Wearing jeans, dark hair in a nice designer cut, handled herself like a
mover. Not to mention a world-class bottom inside those tight, shapely
Calvins. From all appearances she actually seemed to be second-in-
command. She was reading the riot act to Tanaka about something to do
with the computer, had the self-important little fucker bobbing and
weaving. Who was that? Hadn't seen her around here before.
Well, now, no time like the present to head on over and check into this. A
fellow gaijin. Could be she'll explain what in hell's going on. Is Noda real?
Suddenly she turned around, saw me, and stopped. I stopped. We both
just stood there trying to remember. She hit pay dirt first, but I was only
microseconds behind.
Want to know my first thought, my very first thought? Matsuo Noda,
you son of a bitch, you're even smarter than I'd given you credit for. You've
hired the best, the very best.
"Is this how you pick up your women these days, Matt? Given up on
vegetable stands?" She was walking toward me wearing a smile. I tried to
grin back. "How are you, Matthew? Good to see you've still got your hair.
Well, most of it."

"Tam Richardson, I don't believe this. Now I know it all is a dream.
Please tell me you were kidnapped. None of this is really happening, right?
It's just a very big, very bad dream. We'll all wake up tomorrow and go to
the beach."
"Welcome aboard, partner." She stuck out her hand. "It's going to be a
wild trip."
"No kidding." I looked her over as I took her hand. Nice and warm. Time
had treated her well. Very well. "How long have you known Noda?"
"Less than a month." She was checking me over too. Wonder how I was
doing. "How long have you been helping him?"
It occurred to me that we both should have been using that classic
hooker response when the guy asks his young companion how long she's
been in her particular field of endeavor and she replies, "Long enough to
know better."
"Few months now. Noda is pretty impressive." I tried to sound casual.
"Not to mention persuasive."
"That he is."
"Well, let's have a toast to winning this." I turned to the urn. "How about
some tea, Professor?"
"Love it."
"Tam, let's just hope these guys don't suddenly decide to eat us alive." I
passed it over. "What do you think our chances of survival are?"
That one startled her. I got the impression she was half thinking the same
thing. Then she managed a thin laugh.
"We'll eat them first if they try."
"You still talk tough. I always told you you should have been a lawyer."
But she was right. Once the cards are dealt, you play to win.
Which is exactly what I planned to do. Since my own part was still down
the road, that weekend I just sat in their offices watching spellbound as
Noda and Dr. Tamara Richardson reviewed the data and put together the
financial details. Next, a lot of coded telexes were sent out to pile up
somewhere in Tokyo with instructions for routing of the funds.

After I'd digested his opening move, I did have occasion to ask the boss
a few pointed questions. Such as, wasn't he at all nervous that Wall Street
might rebound before he could get rolling? He replied, correctly as usual,
that the total collapse in the financial markets would last for a while. Even
though the dollar was still down for the count (over forty percent), he
figured only the most intrepid foreign speculators would go plunging into
the American stock market looking for bargains. As for American investors,
most of them, including the institutions, were still in shock. He rightly
forecast that the herd mentality of the Street hadn't been repealed. War
stories of '87 were going around and nobody wanted to make the textbooks
as a fool. Better a little profit forgone than more money lost. The mutual
fund managers, most of whom had been caught with their pants at half-
mast, were devoting their energies that weekend to composing creative
explanations.
Events Monday proved him to be essentially on target. There was an
eerie quiet over the financial landscape. Everybody was waiting for
somebody else to try breathing life back into the corpse.
Then a few analysts noticed something peculiar. Anonymous buy orders
were coming in, more and more, for stocks in the sector hardest hit, high
tech. Maybe it was bargain hunters, but the buyers weren't any of the
"growth" mutual funds that might have been expected to lead the action. In
fact, many of those hotshot managers were relieved to part with some of the
dogs they'd ridden down that long, lonesome decline of the week before.
Gradually the prices of certain securities began to edge up
in this early thin trading, enticing more and more holders to "sell on
strength." What issues? First off, anything to do with computers. Of course
there weren't all that many hardware manufacturers left around by then,
after the shakeout and mergers of the mid-eighties, but somebody was
buying heavily into the few that remained. They were also actively
purchasing little software outfits. Those stocks had taken a heavy beating
over the past week, so prices were at an all-time low for most.

Other industries they started to nibble at were telecommunications,
aerospace, biotechnology. They seemed to be looking for outfits with
substantial R&D operations: the focus was on creativity, growth sectors, the
sunrise industries.
Of course, what this mysterious new buyer was really doing was
snapping up outfits loaded with labs and Ph.D.'s. Dr. Richardson and my
new client Matsuo Noda had DNI acquiring companies short on competent
management and market share but long on research, innovation—the one
thing we were still halfway good at. Looked at differently, what Dai Nippon
was really buying was underused brainpower, the American smarts
currently going to waste thanks to inept corporate management.
Explanations began to sprout all over the place—from the "Heard on the
Street" column in the Journal to Dan Dorfman, a guy with a bloodhound's
nose for Wall Street shenanigans. But the hard truth was nobody could put it
together. Who could have? The play was too ambitious even to imagine.
You guessed it. With the trillions and trillions now at its disposal, Japan
was about to take charge of America's future.

CHAPTER FOURTEEN

The task ahead can be described very simply. I was going to help Dai
Nippon acquire controlling stock positions in a bevy of ineptly managed
American high-tech companies, and she was going to be in charge of
turning them around. I was DNI's takeover artist; Tam was the fix-it expert.
That probably sounds a bit ambitious on everybody's part, but after
watching the Dai Nippon juggernaut for a couple of days I knew one thing
for sure: we'd have plenty of heavy backup.
Why did I agree to ride shotgun for Matsuo Noda's "Save America"
project? Because, if he meant what he said, such a program was long
overdue. American industry was in trouble, and it was hurting a lot of good,
hardworking people who didn't deserve to be hurt. Worse still, this wasn't
some random act of God. It was largely the result of self-serving corporate
management. Most occupiers of the executive suites these days were too
busy merging and acquiring and leveraging to do what stockholders thought
they were paying them for: building industry and creating American jobs.
(Well, maybe that's an overstatement; they had kept Drexel Burnham's junk-
bond cowboys working overtime.) In the mid-eighties, American
corporations were spending two and three times more on mergers and
acquisitions than on research and development. Most industrialists here no
longer cared to try making anything as old-fashioned as competitive
products; they preferred to make deals and sell imports. The net result was
that America, the world's major economic locomotive, was veering off the
track and seriously in danger of taking everybody else in the world along
with it.
That's where Matsuo Noda came in. Part of the arrangement he'd made
with the Japanese institutions putting up the funds was that he would be
given proxy to exercise all voting rights. Face it, he had a pretty impressive
performance record overseeing the long-range planning and investment of

well-run corporations. So after I'd helped Dai Nippon acquire control of a
long list of poorly managed companies, he and Tam Richardson were
planning to move in, clear out the deadwood, and lay down priorities for
restructuring. She was Dai Nippon's technical director for all U.S.
operations, which meant she was going to head up the team on the newly
evacuated floor just above the financial section—Noda's management
samurai.
Enough theory. Here's how it actually went. On Friday the story was
finally broken by The Wall Street Journal, a little squib in "What's News,"
with a short two-column analysis on page 3. The piece revealed that all the
heavy new activity building in the high-tech sector of the market
represented buys being coordinated by a new Japanese investment concern.
This sudden, unexpected program of foreign investment was heralded at
first as a salubrious omen, refuting those doomsayers who were claiming
the world had lost confidence in the U.S. In fact, if anything it was proof
that overseas enthusiasm was actually increasing. Japan's previous practice
of focusing on debt instruments was at best passive investment. But buying
heavily into a sector of the economy that appeared weak was something
else entirely. It was a rousing endorsement of America's prospects.
To be fair, there was still a modest case to be made in that direction. Our
high-tech sector wasn't all struggling high fliers operating out of some one-
story cinder block on Route 128 or the Washington Beltway. America had
plenty of solid industry in high tech—computers, aerospace, office
machinery—and American laboratories and universities were the envy of
the world. The problem lay with the downside. We'd lost our lead in
electronics, drugs, scientific instruments, plastics, communications
equipment . . . it's a long list. In fact, America's overall trade balance in
high-tech products had actually gone negative, shrunk from a twenty-five
billion dollar surplus as recently as 1980. The ignored question, therefore:
Given the direction things were headed, why were the Japanese suddenly
supposed to be so impressed?

The market's initial euphoria didn't last long however. By the end of the
second week the SEC was sniffing the air and the lunch talk downtown,
from the AMEX traders at Harry's to the expense-account crowd at historic
Fraunces Tavern, was
focused on what appeared to be a major shift in Japan's investment strategy.
Now that the stock market was in shambles, they weren't just dabbling
anymore; they were cashing in on the fire sale hand over fist.
Thus the Street's early cheering melted into apprehension. Japan had
already taken apart our debt and currency markets, turned them upside
down, and scored a bundle. Now Noda had Wall Street looking over its
shoulder and reminiscing about the good old days when all it had to worry
about was rich, crazy Arabs. When it became clear that Dai Nippon was
assaulting the U.S. securities markets with high-speed computers and a
checkbook that just kept coming, there weren't all that many wisecracks
about camels and tents.
Wall Street, however, merely counts; it doesn't think. The real disquiet
was reserved for corporate boardrooms. Take it as a given that when the
Securities and Exchange Commission reports some ten, twenty, or thirty
percent of your company's stock has just been swallowed by a cash-rich
Japanese raider, your attention can focus most exquisitely. In a word,
Matsuo Noda was the talk of industrial America. More to the point, and
exactly what he had expected, the boards and CEOs of the companies being
bought were beginning to be scared shitless. A major player with seemingly
bottomless pockets was gobbling up heavy blocks of their publicly traded
shares. Worse still, nobody had the slightest inkling why.
What all those entrenched CEOs didn't realize, in their wildest paranoia,
was that seven-figure salaries and cushy executive perks were about to go
the way of Cadillac tail fins. World competition, not executive
compensation, would be the new game. Playtime was over; America was
about to get serious again.
My early suspicions concerning my role in Noda's design had been
precisely on the mark. I was indeed the freelance gunslinger he wanted by

his side when the companies he was aiming at started to shoot back, which
they surely would. Needless to say, if his plan was ever allowed to reach the
courts, it would create a virtual "living trust" for half the corporate lawyers
in the land. He'd be in litigation through the twenty-first century as
managements fought to the last stockholder's dollar to keep their jobs.
Enter Matt Walton. Time for some samurai-style legal swordsmanship.
The rules: If you're CEO of a company and somebody starts buying up a
major chunk of your stock with the intent of taking you over, you've got
roughly four basic ways to stop him. The first is to try and bribe that buyer
to go away, paying him a ransom—politely called greenmail—to sell his
holdings and disappear. (More than one corporate raider you've read about
in the papers has made millions in a couple of weeks using that very play.)
The drawbacks of trying to buy off a potential acquirer are, (1) it's
expensive, and (2) maybe he really does plan to eat you, in which case it
won't work anyway. Matsuo Noda was in that category.
A second popular means to thwart a hostile takeover is to go out and find
somebody else to buy you first, the proverbial "white knight." Ideally this
friendly buyer should be, (1) too big to be taken over himself, and (2)
willing to let you keep your playpen.
A third technique to stop somebody from acquiring a controlling chunk
of your stock is to jack up the price, usually by offering to buy it yourself.
Float some junk bonds, sell off a few divisions, do anything that will raise
cash and then offer the shareholders more than the raider is willing to bid.
This can be very expensive, but if you're a CEO with millions in
compensation every year, why should you care if your stockholders'
company is leveraged to the brink of ruin? You've still got your job and
your goodies. It's used a lot.
The fourth and most fashionable way these days to stop hostile mergers
is to try and make yourself unmergeable. To do that, you get your board of
directors to vote a poison pill. What this does is make sure that any
company that swallows you is going to be ingesting a piranha that will eat
said company's own guts instead. The newest twist on this is to use phony

bonds with a so-called flip-over provision, a killer pill invented by a clever
New York law operation I won't name but whose initials might be WLR&K.
Their game is as follows. In order to protect yourself you invent some
convertible bonds and stash them away somewhere, ready. Then, should a
raiding company start acquiring your stock or make an unauthorized tender
offer to your shareholders, you hand out these little bombs to everybody
who owns your shares. If this unfriendly company is then unlucky enough
to actually acquire you, those convertibles "flip over" into the stock of that
buyer. Your stockholders suddenly have the right to exchange their funny
paper for huge, discounted chunks of real stock in the acquiring company—
which would, naturally, be ruined should that happen. And usually, just for
good measure, you also vote through a few "golden parachutes" for you and
all your cronies, giving everybody in the executive suite severance pay in
the tens of millions.
Those were the stakes. Now, a lot of outfits suddenly found themselves
being bought by a mysterious Japanese entity named Dai Nippon,
International. What were they going to do? At first of course everybody just
assumed NDI was merely angling for a little greenmail. No such luck. After
a couple of days went by and we hadn't returned anybody's phone call, they
knew that wasn't it. Next, a few went looking for a white knight with more
money than DNI (a tough assignment). Not surprisingly, however, most
corporate managers very quickly decided to call a board meeting and ram
through a poison pill.
I got more than a few phone calls at my downtown office from CEOs
wanting to know if I could pitch in and help them stave off what looked like
an unfriendly Japanese buy-up. I had to say, sorry fellows, I'm unavailable.
But why not give it your best shot and try the old "pill"?
Most of them did. They had no option really.
Which suited me fine.
The time was late Friday—the afternoon was gorgeous, sunny and crisp
—and the place was Noda's office. Naturally he understood all about poison
pills, so he knew the problem. What he wanted to hear was our solution.

"I'd like to try something that's never been done before. A different battle
plan." I glanced out at the blue sky and wished I was already in St. Croix on
holiday with Amy. "However, I think it's possibly just unconventional
enough to fly."
"It has to be legal, Mr. Walton." Noda leaned back in his chair, waiting.
"It is. But in order to lay the groundwork, we'll first need to set up a
string of dummy corporations."
"Any particular state?" He was listening closely now, his mind clicking
away. I was never sure what the man was thinking, but I figured he'd
probably seen it all before.
"That old standby Delaware should do fine, though you might want to
consider going for some offshore tax-haven places, if only because the
paperwork is minimal. In the Caribbean I'd recommend the Turks and
Caicos Islands, maybe the Cayman Islands. Then there's Bermuda or the
Bahamas or the Channel Islands. If you really want to get esoteric, why not
Vanuatu—used to be the New Hebrides—in the South Pacific."
"I'm familiar with world geography, Mr. Walton." He was deadpan. A
joke?
"Fair enough. These dummy corporations of course will have no assets."
"I understand." He smiled and ran his fingers through his silver hair,
doubtless already miles ahead of me. "Absolutely no problem. Please
proceed."
"While those corporations are being set up, you continue buying stock in
whatever companies you need to control, making sure in all cases that you
acquire just enough to deliberately trigger their poison-pill mechanism. We
force them to issue their flip-over bonds. They can't stop the process, since
it's always set up to be automatic after a certain percentage of stock has
been acquired. Not even the boards of directors can revoke it."
"Yes, Mr. Walton. I'm aware of that." He didn't seem the slightest bit
ruffled by my unorthodox opener.
"Well, let me elaborate. The reason we want to trigger their poison pill
first is so that nobody can later come in as a white knight and save them.

They're totally isolated. They'll have made themselves into sitting ducks."
"Very good." He leaned back. Was he really that far ahead of me?
"While that's happening, you 'sell' the stock acquired thus far to one of
the dummy outfits we've set up, in return for debt paper. Which puts DNl at
arm's length and untouchable. After that, you lend that dummy corporation
the rest of the millions or billions necessary to acquire a controlling interest
in the company, taking back as collateral more junk bonds at absurdly
usurious rates. That makes it a financial leper, but you don't care: you're
merely lending yourself the money. This paper corporation is all that can be
touched when the acquired company's poison bonds flip over. So instead of
being convertible into the stock of some cash-rich corporation, the way they
were intended, those flip-bonds are going to give their holders a piece of
some offshore phone booth with zero assets and enough debt to choke a
horse. They're worthless paper. And you're in the clear."
He smiled. "Which means our program can proceed on schedule?"
"Dai Nippon will be totally insulated from their poison pills. Like the
guy who sells his house and boat to his company and then lets it file
Chapter 11 bankruptcy in order to protect his personal assets from creditors.
Nobody can lay a glove on you."
"Mr. Walton"—he leaned back, a twinkle in his dark eyes—"that's
exactly why I knew you were right for us. You have an intuitive grasp of
tactics."
"If you do this, there're going to be a lot of unhappy, unemployed
lawyers in this town."
"Most regrettable. Some of them might even have to go out and find
productive work." He rose and shook my hand. "You've destroyed the
prospect of years of legal roadblocks in a single stroke. It's elegant."
It was. Sun Tzu and Miyamoto Musashi would definitely have approved.
But there still had to be more. An unexpected opening is not enough in
itself; it needs an equally deft follow-up. Bushido, the Way of the Sword,
teaches that you should first surprise your antagonist, and then you must
confound him. Both the initial attack and the carry-through are crucial to

success. Among other things, that meant Noda's mechanism for calling a
board meeting of the companies he'd be acquiring had to be instantaneous,
without the usual niceties.
"This setup should do the job, but only if it's used with finesse.
Otherwise the whole system gets buried in paperwork."
"What do you mean?"
"You have to be fast, and flexible. Once you've taken ownership of a
company, you've got to gain immediate control over its board of directors,
in order to block any and all countermoves."
"I understand."
"Do you? I'm talking about the ability to call an executive session out of
the blue. The kesa stroke of the sword. The power to cut a CEO in half
before he can blink. No time for consensus and the usual Japanese niceties."
He stood quietly, thinking. At last he spoke.
"In other words, I must be able to convene the board at a moment's
notice. Is that the essence of what you are saying?"
"Nothing else is going to work."
"Very well. After we have a commanding stock position, we can institute
the necessary changes."
"Good. Remember though, that's still merely half the battle. Besides
being able to call board meetings, you need full authority to institute a
shareholders' vote, which in this case will consist of nothing more than you
signing your name."
"Perfectly reasonable."
"It is. But it also means you've got to be available to me at all times. Can
I rely on that?"
He turned and strolled to the window, pensively. "That may not always
be possible."
"Then you've got a potential problem."
He revolved back and studied me a second, finally taking the bait.
"There is, of course, one very simple solution. I can merely assign you
power of attorney, allowing you to act in my name if I cannot be reached."

"That would do it. But you'd be handing over a lot of authority."
"I envision no difficulty." He looked me over with the self- assurance of
a tiger contemplating a haunch of beef. "I have every reason to believe you
would always act in DNI's best interest, Mr. Walton."
It was possible he knew a few things I didn't. On the other hand, maybe
Matsuo Noda had just overreached, taken too much for granted. Whichever
it was, the maneuvering just completed had been one small step for Tam,
and Matthew Walton. Should we ever need them, I'd just conned Matsuo
Noda into giving me duplicates of the keys to his Kingdom. It was our
protection and, in a way, my secret price for putting our heads into Dai
Nippon's noose.
"Then it looks like we have everything we need to move forward." I
nodded.
"Excellent."
Upon which I absented his office, safety net in place. The play was on.
Which brings us to Tam Richardson. If my approach to this new job was
a little unconventional, what about the college prof who showed up in jeans
as she readied to renovate corporate America? One thing, we suited each
other. It was a tag team made in heaven. After I'd pried open the door to the
companies DNI was buying, she was going to roll in, guns blazing, and
shove everybody against the wall.
Let me add one important distinction, however. Whereas I may have
been wary, even slightly skeptical, Tam was definitely the idealist. She was,
by God, going to get this country moving again. America was once more
going to lead, she declared, not follow. No defensive Fortress America
claptrap. Hers would be nothing less than a full-scale assault, intended to
win back and keep a solid manufacturing base here, toe-to-toe with the
world.
Since no overall American program existed to rescue industries now
being killed by foreign competition, she was going to do it herself, create a
coordinated battle plan for our strategic sectors. Backed by Noda's Japanese
billions, she was about to try and redeem this country's future, leading us

back to number one. She also was quick to add she had no intention of
merely copying Japan's famous management techniques. Japanese industry,
she insisted, hadn't invented long-term planning, sound capital investment,
dedication. What they did over there these days was what the U.S. used to
do. The American work ethic was alive and well; it was just temporarily on
the wrong side of the globe. She was about to bring it home again.
Maybe she could. One major impediment at least would be out of the
way. Since the companies Dai Nippon was taking over would no longer
have to answer to a lot of fickle fund managers every three months, they
could start investing for the longer term. Also a lot of unnecessary fat was
going to be sliced out of upper management. If things went as planned, Dr.
Tamara Richardson and Dai Nippon were about to become the ruthless
architects of a new corporate America.
Unless . . . well, there seemed no reason not to take things at face value,
at least for now. DNI's new Industrial Management Section on the twelfth
floor had already begun filling up with young Tokyo University graduates,
guys who embodied the work ethic in human guise. They meant business.
Nobody was sipping coffee and critiquing last night's rerun of Dynasty. I
got the definite impression one of the unsmiling whiz kids in Noda's
handpicked cadre could chew up about five American MBAs for breakfast.
Tam currently had them working overtime, putting together a reorganization
plan for an outfit in Boston, one of their new acquisitions, which I guess I'd
better just call XYZ. The previous week Dai Nippon had purchased some
twenty-four percent of its stock, presently at a historic low, and she was
planning to make the company her showcase turnaround.
Stock in hand, she'd buckled down with her new staff and using DNI's
analytical machinery confirmed some alarming suspicions. It turned out
XYZ was practically a terminal case, living at the moment off its real estate
assets, which were being systematically dribbled away to mask heavy
losses. Layoffs would be next.
By Thursday of the second week, however, she'd put together a
restructuring, including some painful austerity that might just salvage the

company and its American jobs. She went home that night feeling quite
proud of herself, and Friday she flew up to Boston for her first official
conference with XYZ's chief executive officer.
Since a quarter of a company's shares gives the holder reasonably high
recognition, the CEO was understandably nervous about who exactly had
acquired a fourth of his company inside of a week and a half. He appeared
at Logan with his Rolls limo to receive Dr. Richardson personally.
She explained right off that she was there merely to pass along a few of
DNI's "recommendations." She took one look at the Rolls and added that,
for example, one of the first was going to be to divest all limos forthwith,
along with the new fifteen-million-dollar Gulfstream IV he'd bought for
weekend fishing trips down in the Keys, and direct the proceeds toward
capital investment.
From there on things progressed pretty much as might be expected. By
the time they reached his paneled office she had been obliged to explain
that his options were either (1) to get in line, or (2) to watch DNI pick up
another thirty percent of his company's O-T-C shares, then march him and
his "golden parachute" past a stockholders' vote they would call to review
his career options. After that she had claim to his unalloyed attention.
It was a tough Friday. After she flew back late, she dropped by the office
to pick up a few things and fill me in on how it went.
"Good. You're still here." She popped her head around my office door.
"Who won? The Christians or the lions?"
"Want to hear about it?" She came on in and dropped her briefcase on
the desk.
"Wouldn't miss it for the world."
"Matt, you should have seen the look on that man's face." She clicked
open the case and pulled out the action plan she'd developed for XYZ. She
was exhausted but still wired. "These CEOs forget it's shareholders who
own the companies and pay their salaries. They start thinking they're little
Caesars."

"Hey, those are the kinds of operators who used to be my clients. Believe
me, I know the type."
She then proceeded to give me the rundown. Outfit XYZ specialized in
high-tech widgets it sold in the U.S., Latin America, and Europe. Problem:
their widgets cost too much, broke down more than they should, and
consequently folks didn't tend to buy them the way they once did. As a
result XYZ had dropped about five million last quarter and (unbeknownst to
its workers) was currently on the verge of closing two of its three U.S.
plants and exporting the assembly operation someplace where it could
exploit two-dollar labor, a move that would tank just over a thousand
American jobs. Management says, gee, that's tragic, and awards itself
another year-end financial tribute.
Dr. Richardson had just dropped a bomb in the playpen. First off, she
told them, XYZ's damned widgets cost too much not because American
workers are overpaid, but because its assembly plants were a candidate for
the Smithsonian. Therefore, starting immediately, short-term profits as well
as dividends and all management compensation would be slashed and the
resulting capital, together with a new offering of long- term corporate
equities, would be invested in automating its facilities and retraining
workers. There would, in fact, only be workers in future, since all
freeloading middle managers, attorneys, and drones with titles such as
'administrative assistant' were to be terminated. She gave them a list.
Henceforth, she went on, management would begin planning ten years
ahead, not three months. XYZ would concern itself with world competition
then, not now, and it would develop a substantially more diversified product
line to cushion slumps. As part of that shift, it would double the budget for
R&D immediately and expand the lab. Innovation would once again be
brought to the product stage fast and adapted quickly to world markets.
XYZ's new focus would be on making its market share grow in the decade
ahead, which also meant cracking down on quality and halving the current
customer-be-damned response time on deliveries and service. Concerning
those last items, product managers would now be required to address

customers' complaints personally. She figured that in itself would turn
around XYZ's substantial quality control debacle overnight.
Finally, there would be an immediate crash program to rectify XYZ's
costly illusion that English was the worldwide language of business. These
days, she explained, the language of business is the one your customer
speaks. Accordingly all XYZ's overseas operatives would be required to
enroll in intensive language training now, including formal study of the
history and social customs of their territory.
"Sounds like you let him have it with both barrels. Keep on like this, and
the U.S. of A. may never be the same."
"That's the idea. One company down and about three thousand to go."
What's that saying about a journey of miles and miles starting with the
first step? Well, she'd taken the step. The future lay ahead.
"Hey, can I buy you a drink?" I was winding up the day, the week.
"You've earned it."
"Like nothing better." She was repacking her briefcase. "Matt, I'm
having the time of my life. All the things I've always wanted to do. This is
like a fantasy come true. We're going to pull this off, wait and see."
"Could be." I was switching off the lights in my office. "Tell you
something though, Doctor. I keep wondering what will happen when Noda
gets through with us."
"Thoughts?" She glanced back.
"Well, after Japan takes over half the companies in this country and
starts running them right, then what?" We were headed for the security
doors. "But maybe we ought to talk about that some other time. And place."
"I'll think about it tomorrow. Just now I'm bushed."
"Tomorrow, in case you've lost count, is Saturday. Don't know about
you, but I'm taking the day off. The hell with Japanese business hours. My
daughter comes this weekend." We were saluted by heavies in the security
airlock, then the doors opened. "Matter of fact, we're going to eat
somewhere down in SoHo tonight. Care to join us? Be warned it'll be
mostly soy by-products and brown rice."

"I'd love to meet her." She looked at me. "Matthew Walton with a
daughter. My God." She laughed. "Sorry, Matt, but you really don't seem
the father type."
"Amy's mother said approximately the same thing as she was packing
her bags. But I'm now undergoing intensive on-the-job father training. Fact
is, I'd planned to knock off around Christmas and take her down to our
place in the islands, though now I'm not sure there'll be time."
"Sounds very fatherly. You should go."
"I'm still hoping to." I looked her over again. "Well, the hell with it, why
mince words. Tell me, Tam, how's your love life these days?"
She burst out laughing again. "You haven't changed a bit. Not at all."
"Spare the commentary, okay? Just stick to the question."
"Excuse me, counselor. The honest answer is it's nonexistent, which you
surely must know, since I'm here every night till midnight just as you are."
She examined me pointedly. "Matthew, could this conceivably be construed
as a proposition? To a horny, bone-tired woman in her moment of mental
fatigue?"
"It might be a tentative gesture in that direction. I'm a slow mover."
"You always were." She finished buttoning her coat. "What time's
dinner?"
"I'll pick up Amy and buzz you. Give us an hour."
"Think she'll like me? Some stranger competing for Dad's attention?"
"If she does, it'll be a first." I pushed the down button on the elevator.
Guess what. Matthew Walton barely got a word in edgewise the entire
night. Then around eleven, in the cab headed home, Amy whispered to me
she thought Dr. Richardson was "kinda neat." Was she gonna be my new
girlfriend?
Tell you, it's not always simple learning to be a father.

CHAPTER FIFTEEN

Over the next couple of weeks I began to wonder if the scenario wasn't
going a little too smoothly. Everything about Noda's setup seemed
surprisingly pat. The answers came too easily. Was it all really what it
seemed?
I should also add that in the fortnight since Tarn's first contact with
America's shell-shocked industrialists, the situation had not gone unnoticed
in Washington. Tuesday of the second week Jack O'Donnell called and left
a message downtown with Emma, asking if I could arrange a meeting for
him with the elusive Matsuo Noda. Although I'd tried to keep Jack informed
as to developments, he still wanted to confront America's New Age maker
face-to-face.
"Walton," he said when I got back to him, "I just heard your guy's too
'busy' to meet the press, but maybe he'd chat with a close, longtime friend of
his American attorney. That's me, in case you don't recognize the
description. Why not try and get me in to see him?"
"You're dreaming, Jack." I told him that a U.S. senator was about the last
person Matsuo Noda would be interested in meeting just now. "Don't hold
your breath, but I'll bring it up and see what he says."
And what do you know! Noda declared that nothing would please him
more. Naturally there had to be a few ground rules about confidentiality—
this was after all a delicate corporate situation—but otherwise he'd be
delighted to chat. You could have knocked me over with a feather.
Thus around two P.M. Thursday, Jack O'Donnell arrived at the new
twelfth-floor operation, ready to get the truth or by God know the reason
why. After he made his way past our Uzi- outfitted reception, I brought him
on through the floor and introduced him to Dr. Richardson. Jack knew of
her writings

and hit the ground running, asking who, why, when, where, etc., but before
he could get any real answers, Noda appeared and took over.
O'Donnell confided later that his first impression of Matsuo Noda
matched perfectly my description of the man—every bit central casting's
image of the in-charge Japanese honcho. After the usual routine
pleasantries, Jack said he'd like to record their talk. Noda politely demurred,
saying recording instruments stifled his spontaneity, then proceeded to laud
Jack's own articles and speeches urging American industry to get its house
in order. Senator Jack O'Donnell, he declared, was a visionary American
statesman.
Jack accepted this praise warily, then asked if he could maybe have a
peek at the computer operation on the floor below, the analytical armory I'd
told him about. Again Noda begged off, claiming he'd be honored to guide
the esteemed senator's tour personally, but surely they'd both prefer to
postpone that until such time as they had the leisure to review the operation
in detail.
Jack sensed, and I did too, that he was getting a polite runaround, so he
decided to get down to business. He clicked open his briefcase and took out
a notebook.
"Mr. Noda," he began, "there's been considerable speculation in
Washington this past couple of weeks regarding the specific intent of
Japan's sudden heavy involvement in America's high-tech sector. My
subcommittee has monitored foreign investment here for a number of years,
and frankly I've never seen anything remotely like what's now underway. I'd
appreciate an informal briefing, unless you wish to open the regrettable
possibility of a formal subpoena to appear before our subcommittee."
Whereupon Jack received the first whoosh of what soon blossomed into
a roomful of aerosol bullshit. Noda started with some malarkey about the
great tradition of economic cooperation between our peoples, advanced to
balderdash about Japan's desire to share her resources with the world's less
fortunate, then outdid himself with triple-distilled crapola about the timeless
trust and regard his country's ordinary citizens cherished in their hearts for

our Christian nation (which had merely torch-bombed and nuked them a
few decades past). Worst of all, Jack had to sit there and listen. I've never
seen the guy so uncomfortable.
Clearly Noda intended to give him pure tatemae - soothing generalities
that added up to zip. The man was, by God, going to do exactly what he
wanted, all of which was perfectly legal, so he didn't really see any point in
drawing a picture for the U.S. Senate.
Finally Jack just closed his notebook. "Let me put this differently. I
understand that your objectives are not merely acquisition, but also an
attempt to rejuvenate U.S. business. Beginning, I take it, with the lackluster
segments of our high-tech sector?"
"We hope to offer suggestions from time to time that may prove helpful."
Noda just sat there like a sphinx. "Perhaps I can offer an example. As you
doubtless know, Senator, Japanese firms build plants overseas these days
primarily to be more competitive in those foreign markets. You Americans,
however, are moving your manufacturing abroad now mainly to compete
with foreign goods here it home in your own market. You appear to think it
as comparable, but of course it is not. What you are doing is exporting your
own jobs. Your strategy is defensive, ours is offensive."
Jack looked him squarely in the eye. "Quite frankly I must tell you that
not everyone in Washington these days trusts Japan's 'offensive' in
international trade. I for one would be very interested in knowing exactly
why Japan has chosen to invest billions of dollars in keeping America's
manufacturing alive. Particularly when so much of it is competitive with
your own."
"Yes, Senator, I realize you Americans prize frankness." He wasn't
giving an inch. "Very well. Quite honestly, no one in Japan believes it is in
the interest of the Free World to allow your industrial base to continue its
current decline. Our economic condition is linked to yours, like the vital
organs of Siamese twins. We cannot afford to let you atrophy. For one thing,
you are our only defense shield, since we have none of our own. I might

also add, though it is a comparatively lesser concern, you are Japan's
primary customer."
"So what you're proposing—if you'll permit me to paraphrase—is to take
certain of our strategic industries, the ones in trouble, by the neck and
institute the management, investment, and research necessary to keep them
competitive."
Noda just smiled. "Dai Nippon expects to offer occasional
advice in the spirit of friendly cooperation. Which is why," he went on, "I
am so happy to have this opportunity to review our program with someone
such as yourself. Your understanding of America's industrial malaise has not
gone unnoticed by those Japanese who take the longer view, who worry
about world economic stability."
Jack tugged at his silk tie and nodded his thanks. Then Noda continued.
"You will be pleased to know I have been in contact with the Japanese
trade organizations that have political action committees, or PACs as you
call them, in Washington. Last year we distributed over fifty million dollars
. . . at least if you believe the Senate Foreign Relations Committee's staffers
. . . in an effort to clarify misunderstandings about Japan's trade and
investment position here." He smiled. "That averages out to about a million
dollars per state, to take a somewhat clinical view. Of course I will try to
use my influence to see what our PACs can do to help you next fall."
"Mr. Noda, your expression of support is, naturally, appreciated." Jack
was turning politician again. "However, you should be aware of Section
441(e) of the Federal Election Campaign Act, which states that 'no foreign
national shall make a contribution, or an implied promise to make a
contribution, in connection with any federal public office.' I don't think this
discussion is proper."
"That law says nothing about PACs of duly incorporated American
subsidiaries of foreign-owned organizations, Senator. For example, Sony of
America and a coalition of Japanese investors recently contributed hundreds
of thousands to legislators of Florida and California to encourage the defeat
of those states' unfair unitary taxes on foreign-owned companies.

Sometimes it's necessary to remind your federal and state governments that
Japanese investment can be very problematical in an uncongenial
environment." He smiled. "Americans investing overseas have a long
history of making their interests known to those governments; why should
Japanese businessmen be expected to do otherwise?" All of a sudden Noda
glanced at his watch, rose abruptly, and bowed. "Well, the afternoon seems
to have gotten away from us. I wish you to know I am extremely honored
you've taken time from your undoubtedly busy schedule to visit with us,
Senator. It has been most pleasant."
He shook hands with Jack as he continued. "Of course I have not yet had
the opportunity to review the thinking of the man expected to oppose you in
next fall's senate contest. I believe he is Representative Mark Reynolds, is
he not?"
Jack's polite smile sort of froze on his face.
"But, I'm sure I will," Noda proceeded blandly. "Again let me stress that
voices such as yours are important. There are so few opinion-makers in
America, individuals such as Dr. Richardson and yourself, who have the
receptivity to appreciate the importance of Dai Nippon's program and its
objectives."
I quickly offered to show the distinguished senator to the door, hoping I
wouldn't need that Christmas-gift dog muzzle. He was still closing his
briefcase as we passed the guards, a couple of guys who looked like the
heavies in an old Bruce Lee karate epic. Click, we were on the elevator,
click, we were headed down.
"Good Christ!" He exploded. Before he could say anything else, I waved
for silence. Around here the walls probably had ears. (Shortly thereafter I
discovered I'd underestimated even that.)
In minutes we were on Third Avenue, autumn wind in our hair, with
O'Donnell positively awestruck by Matsuo Noda's balls.
"Matt, did I hear what I thought I did?" His eyes were grim.
"That he's got X million bucks that say you get retired if you fuck with
him?"

"My reading was, I play ball with him and his crowd and he'll write a
blank check for my campaign next year. I cross him and I'll be watching the
Mark Reynolds show every night on prime time right through election day."
He was livid. "Matt, take my advice and get out of this thing. That bastard
thinks this country's for sale. If he expects me to run interference for him on
the Hill while he gears up for World War Three, he's making a big mistake."
"Jack, I can't quit now. Who else is going to keep an eye on this guy?
Besides, he'd never let me. I know too much."
"So what? He's got to be stopped."
"Look, if you're so worried, then deliver a major speech on the Senate
floor. About all these Japanese billions rolling in, absorbing companies,
with a lot of samurai fanning out to take
names and kick ass across the boardrooms of America. It ought to get
picked up by the Nightly News. Then we'll see what the country wants to do
about it."
The problem, obviously, was what could the country do about it. And
more than that, where would it eventually lead? Did anybody—Tam
Richardson included—seriously believe this was merely a temporary
helping hand? History had a practice of going in one direction—forward.
So after Noda had acquired a lot of our high-tech outfits, maybe even kept
them from going the way of Mostek and others, what next? More and more
I was beginning to wonder if this was really preferable to our blundering
along as best we could on our own.
After gazing at the sky a minute, he declared he was going to do exactly
what I'd said. Blow the whistle. He was about to write a speech that would
be read the length of America, maybe even in the White House—unless, as
Henderson claimed, nobody there these days read anything but
TelePrompTers. Nobody was going to buy off Jack O'Donnell.
I watched as he bulldozed a matron and her fur-collared pooch out of the
way to grab the next cab for his midtown office. On the way back through
the lobby I stopped off and grabbed a copy of Time. Had we made the
weeklies yet?

Yep. Lead article, all about how the Japanese loved investing here.
Going up in the elevator, though, I happened to flip past a profile of some
recently disappeared luminary in the academic world, the guy who was
supposed to have been the father of artificial intelligence. It occurred to me
the piece might be of interest to Tam. She'd been so busy she was probably
out of touch.
When I got back up to twelve, Noda was gone. Vanished almost as
though he hadn't been there. I wanted to huddle with Tam about his evasive
new song and dance, but since I was holding the magazine, I showed her
the item. The rest of what happened you can probably guess. She had been
out of touch.
"Oh, my God, Allan!"
"Friend of yours? I'm sorry."
"Nobody told me." She grabbed it and quickly skimmed the article.
Finally she headed for her office. "I've got to call Sarah."
"Tam." I caught her arm. I'd finally made the connection.
"I think I already know the story." Then I recounted Henderson's bizarre
tale.
That was the first time though not the last that I saw Tam Richardson
look scared. She obviously knew something I didn't.
"Matthew, something is very, very wrong."
"Just repeating what I heard." I looked at her, now twisting the magazine
in her hands, and decided to press. "Is there more to this than you're telling
me?"
"I don't know." She glanced around. "I really don't want to talk about it
here."
"Whatever you say." I paused. "How well did you know him?"
"He had dinner at my apartment not more than a couple of months ago."
She tossed down the magazine. "And he asked me to do something for
him."
"Did you?" Don't know why I asked. It just seemed relevant.

"No. I guess you could say I did just the opposite. Now it all makes me
wonder if . . . if maybe it has some connection with . . ." Her voice trailed
off.
"What? What connection?"
"Nothing." She was starting to clam up.
She didn't say anything more. And, so far as I know, that phone call
never got made.
Besides, something else occurred that night to occupy her mind. When
she got home, she picked up her mail and decided to crash. She'd been so
busy she still hadn't finished with all the odds and ends that had stacked up
during the Tokyo trip, but that night she was too knocked-out to bother. She
poured herself a glass of white wine, quickly checked the mail, and was
getting ready for bed when she first noticed the light flashing on her
answering machine. For a minute she considered just letting it wait. There
was nobody she wanted to talk with who wouldn't still be there in the
morning. But finally curiosity got the upper hand, and she pushed "Play."
There was only one message. In Japanese.
Ms. Akira Mori wanted to see her Friday morning, at the DNI offices. It
wasn't a request; it was a summons.
Wait one minute! Mori? When did she get into town? And more to the
point, where did Mori-san come off summoning Tam Richardson for a
command appearance? She had another
glass of wine and finally went to bed wondering who exactly was now
running the show at DNI.
Friday late she awoke still thinking about Allan. What was going on?
She was beginning to get worried, and maybe a little frightened. Finally,
just before lunchtime, she got her briefcase and hailed a cab for uptown.
After she cleared the checkpoint at the twelfth-floor elevators, she
spotted Mori-san, right there in the midst of the action. This woman wastes
no time, she told herself. Mori, an incongruous peacock of designer
elegance in the midst of the bustling, short-haired staff, was poring over a
stack of printouts assembled on a desk in the center of the floor. Meanwhile,

the office was going full tilt: the green print of CRT screens glowed;
printers hummed all around; data bleeped between terminals; and staffers
were hurrying over selected documents for Mori to review. Also, since
heavy buys were underway, the latest SEC filings (required when one entity
acquires more than five percent of the stock of a given company) were
being readied.
As it happens, I was already on hand too, over in Noda's office where we
were going over some paperwork. The day's news as far as I was concerned
also was Mori-san. She'd appeared bright and early, held a closed-door
confab with Noda, proceeded to do some photocopying, then
commandeered an office.
By purest coincidence I was doing some copying of my own round about
then and ended up on the copy line right behind her, inhaling her perfume.
Next an odd thing happened. As we all sometimes do when rushed, she'd
snatched up her copies while the last original was still on the machine. Then
she asked me if I wanted regular size or legal. Legal, I said, and she reached
to flip the switch. As she did, though, she accidentally clicked the "print"
button with those long fingernails, whereupon she stalked off, rummaging
through her copies and forgetting the original.
Not for long. Two seconds later she was back to claim it, but by that time
an unauthorized copy was lying in the output bin. I didn't even see it.
However, when I scooped up my own pages a minute later, mixed in with
them was a sheet listing some names and numbers with REVISIONS
lettered across the top. I started to toss it, then paused to glance over the
names for a moment.
Hang on, everybody, this is very out of line. That's when I decided to slip
it into my briefcase.
When Mori saw Tam come in, she quickly stacked the printouts she was
reviewing into a neat pile, then beckoned her toward the far corner of the
floor. Tam noticed that Mori's new office was at the opposite end of the
building from Noda's.

"I understand Noda-san has appointed you director of this division."
Mori was ushering Tam into the office, all the while running her fingers
nervously through her sculptured black hair. "Congratulations."
Not exactly a great opener. It sounded even harsher in Japanese, since it
was so at odds with the usual polite greetings.
"I've been hired to do a job, Mori-san, and I intend to do
it."
"So desu ne," Mori concurred in Japanese, her voice a trifle strained.
Tam thought she looked a bit bleary-eyed after her flight in from Tokyo, but
there were no half measures about the woman. She was all business in a
prim silk suit shading to gray with a bright blue scarf tied at the neck. She
wore high heels, but they didn't slow her brisk stride as she paced around
her desk. "I am sure you will do it well. I would like you to know I am
prepared to assist you at every step."
Well, Tam had a pretty clear idea of how she intended to proceed, which
didn't really include a lot of assistance from Akira Mori. What exactly had
Noda been telling this woman? Maybe, she mused, Mori-san just hadn't
been fully brought up to speed.
"I noticed that you're reviewing our analytical sheets." Tam continued,
"Those are the firms we're going to start restructuring first."
"And if you do not receive the desired cooperation? What will you do
then?" Mori asked evenly, as though she didn't already know the answer.
"We'll just keep up stock acquisition till we have whatever we need.
Also, I intend to appoint a representative to sit on the board of directors, to
monitor performance and make sure our program is implemented."
"That is my understanding as well." Mori went on, "And concerning the
matter of who will be assigned—"
"I've just finished putting together a list of management experts. They're
dedicated people. Most of them will probably help us for a small
honorarium instead of their usual consulting fees."
"These personnel are an area I wish to discuss with you," Mori pushed
ahead, almost as though not listening. That was when Tam realized she was

finally getting around to the real agenda of the meeting. "It is our opinion
that, at this stage, the heavy involvement of Americans in that capacity
would be counterproductive."
"'Our opinion'?" Tam didn't like the sound of this. "Who exactly is 'our'?"
"I have reviewed Dai Nippon's program in some detail with . . . the
interested parties in Tokyo." Mori appeared to be making an announcement.
"They have concurred that at this stage it would be more efficient if we
assigned our own specialists to assist in the management of these
companies."
"Your own specialists?" Now Tam was starting to bristle. "Just whom do
you have in mind?"
"Industrial experts such as Kenji Asano, for example, may be involved."
She continued, "We have a great reservoir of talent to choose from,
particularly within the Ministry of International Trade and Industry."
"MITI?" Tarn stared at her, dumbfounded. She couldn't believe her own
ears. That was like calling in a fox to fortify your henhouse. "You've got to
be joking."
"The decision was made last week." Mori fixed her coldly. "Noda-san
has been informed, and he finds the suggestion . . . acceptable."
"Well, I don't," Tam flared. "It's outrageous."
"There is something you must understand, Dr. Richardson," Mori
continued in Japanese. "The management of a company should represent its
ownership. Since Dai Nippon will be holding what amounts to a controlling
interest in these firms, we are obliged to assist them using whatever
international specialists we feel are most qualified to contribute. For now
we believe that the expertise in our Ministry of International Trade and
Industry is most appropriate since it has guided corporate growth in Japan
for many years with undeniable success."
"That's irrelevant." Tam steamed. "First, most MITI executives don't
necessarily understand American business. And second, MITI has no right
involving itself in the operation of our industry. It's a flagrant conflict of
interest."

"There I must disagree with you. On your first point, many Japanese
firms have been manufacturing here and have an excellent record of labor
relations and management success. As to your second point, using
specialists trained by MITI is simply the most efficient way to transfer
Japanese expertise."
"It won't be allowed."
"Why shouldn't it be? Any people we bring here will be on leave of
absence. Hence they will no longer have any official ties to the Japanese
government. No law prevents us from appointing whomever we wish."
Ouch, Tam thought. She's right. Nothing could stop Dai Nippon from
restructuring the boards of directors of the companies in which it held a
voting majority of shares. In fact, several Japanese firms had already taken
over and reopened the manufacturing facilities of some of the very
companies MITI's "targeting" had decked only a few years before, bringing
in Japanese board members as part of the deal. What's more, Americans
loved it. Governors were falling over themselves to attract Japanese joint
ventures to their states.
"Does Noda-san understand the significance of bringing in MITI
personnel?"
"There are many interests to be addressed . . ."
At this point I wandered in, together with Noda, to talk about setting up a
meeting that afternoon. We'd been reviewing DNI's plans for a new program
of real estate investment and construction, part of expanding the research or
manufacturing facilities of the firms it was now in the process of absorbing.
I passed a pleasantry with Tam, then studied her, puzzled. "You look a
little distressed this morning."
"I'm receiving an update on a change in our program." Tam glared back
at Mori, then turned to Noda. "What's this about bringing in people from
MITI?"
Noda smiled, but he looked a trifle uncomfortable. "Think of it as a
temporary measure." He nodded toward Mori, then looked back at Tam.
"We always like to operate by consensus. And that consensus among the

fund managers who have joined us appears to be that our investments
should initially be monitored by our own people."
"I thought this office was going to be in charge of determining who our
people would be, not somebody in MITI." Tam fixed him coldly, then
turned on me. "Did you know anything about this?"
"Bringing in honchos from MITI? News to me." I examined Noda. "I
understood the management end of this was going to be directed by Dr.
Richardson."
He was smiling again. "But it will be. She will continue to meet with the
CEOs of the firms we intend to assist to provide our preliminary analysis of
their operations, and she will be with us every step we take."
"It hardly sounds that way." Tam was boiling. "The way it looks now, I
set up a reorganization plan, then MITI's people come in and take over."
"Merely for consultation, Dr. Richardson. I assure you." He glanced
uncomfortably at Mori-san. Both Tam and I had the same hunch at that
point: Noda's backers had started to get a little edgy about his investments,
so they'd decided to send in some brass from the Delta Force to keep an eye
on things. But you'd never have suspected that as he continued, "Dr.
Richardson, surely you must be aware that MITI personnel are not in the
habit of, as you phrase it, 'taking over.' At most MITI merely recommends
policies to enhance competitiveness. Furthermore, the individuals we will
engage will no longer be associated with MITI. They will merely be
specialists in our hire. Their participation will be extremely beneficial,
please believe me."
"If making decisions like this is your idea of consensus, then I don't
think much of it." Tam was getting increasingly wound up. "And I'll tell you
something else. I intend to review the government connections of anyone
you bring in. I'm going to have final say."
"We all want to work together," Noda continued smoothly. "Our plans
are continuing to evolve. Of course I will insist on full American-Japanese
coordination and cooperation at every stage." He looked squarely at Tam.
"You have my word."

She glanced over at me, trying her best to keep cool. I was toying with
my papers, still posing as a neutral observer, but I was equally puzzled.
Why would Japan's Ministry of International Trade and Industry let its
people be used to assist American companies? Okay, MITI's elite
technocrats were probably the cream of Japan's management talent, but they
already had their hands full.
More to the point, given MITI's sorry history of rule bending and
economic guerrilla warfare, why would it now cooperate in Dai Nippon's
plan to restructure the high-tech segment of U.S. manufacturing? I asked
Noda point-blank.
"Mr. Walton, if you choose to see Japan and the U.S. as competitors,
then I suppose you could regard this as our ancient tradition of 'giving salt
to the enemy.'" He smiled awkwardly.
Bullshit. That's what I thought, not what I said, which was nothing.
Tam in the meantime had her own question to chew on. Mori had
mentioned Ken Asano. Was he involved too? Since Mori had specifically
named him as being on the MITI team that she or somebody now planned
to enlist, was this a tip-off that Ken was in with them up to his neck? Was
this the "trust" he'd talked about?
Since Tam looked as if she was getting ready to resign on the spot, I
figured a little cooling-off time for everybody might be in order.
"Dr. Richardson, if we're about through here, could you help me a
minute?" I thumbed toward the open door. "Tanaka wants you to approve
the final setup for the partitions."
I quickly discovered I was wrong about the idea she would quit. As we
worked our way past the computer terminals and stacks of printouts,
retreating toward the center of the floor, she declared war. "MITI or Mori or
whoever's behind this is going to have a fight on their hands. We don't need
them involved."
"Hate to be the bearer of bad news, but I think we're being kept in the
dark about a lot of what's cooking." I kept my voice low, scarcely above a
whisper, as the Japanese staff milled in and out. "There's a sheet of paper in

my briefcase that I'd like to go over with you. Yet another example of the
curious new developments around this place."
She poured herself a cup of green tea from the large urn stationed in the
middle of the floor. "What do you mean?"
"We'll talk about it later." I poured some tea for myself. "I think
something's gone haywire."
That startled her, and she began to tune in. "Things are pretty haywire
now."
"This may be even worse. I came across something a while ago that
doesn't add up." I looked at her. "I think we ought to talk about it."
"Now?"
"Not here. How about tonight?"
"Can't. There's a damned faculty dinner I have to attend."
"Then tomorrow night?"
"Where?"
"What would you say to my place downtown? I think you live right
around the corner from me."
"This has to be strictly business, Matt."
"Guaranteed." I raised my palm.
"Well, I've got a lot of work—"
"Shall we make it for seven?" I was handing her my card, address and
number thereon. "The cocktail hour?"
She was still glaring at Mori's office as she absently took it. "Well . . . all
right." She glanced back. "Seven."
"See you there."
. . . Jack O'Donnell's speech, to be delivered to the Senate that Tuesday,
sort of slipped to the back of my mind. Maybe it shouldn't have. After
getting back to his office that afternoon he dictated about three versions
before he had it the way he wanted it. Friday morning he messengered a
copy down to my office, and I can tell you it was a beauty. He'd got it all,
and he'd got it right.

Later Friday, however, he received a phone call from Matsuo Noda.
After the usual preliminaries, saying how much he'd enjoyed their meeting,
Mr. Noda confided he was calling as a personal favor to the senator, since
they'd hit it off so well the previous day. Turns out he'd just been talking to
the CEOs of various Japanese outfits scheduled to set up manufacturing
operations in some of the "rust-belt" mill towns in upstate New York. Here
was the distressing development: seems they were all of a sudden taking
another look at sunny Tennessee. The problem was, they were upset by the
anti-Japanese tone a lot of New York publications were taking these days—
Japan bashing in the Times editorial pages, things like that. Noda, however,
felt all this was very shortsighted of those Japanese investors; and he
wondered if Senator O'Donnell would like him to put in a word for the
Empire State. Pause. He hated to mention this, but people were even talking
of closing certain Japanese-operated factories already in place, such as that
big one in Elmira, Jack's hometown, and moving them south. But he
thought threats such as that were very impolite and he was hoping he could
find time to straighten the whole thing out.
Like I said, it would have been a hell of a speech.

CHAPTER SIXTEEN

That Saturday turned out to be the day when winter descended abruptly
and with rare vengeance. Remember we're only talking mid-December, still
a dozen full shopping days till you know what, but it could have been the
depths of January. After things kicked off with what seemed a foot of snow
around three, the elements really started to unload. Everything from sleet in
historic proportions to a wind-chill that would have frosted the horns off a
Bexar County billy goat.
While I waited for Tam, I battened down the garden, covered the outdoor
furniture, and prudently provisioned the larder with a flagon of Remy
antifreeze. Ben in the meantime was lumbering around downstairs, eyeing
the snow-covered garden with an air of disgruntlement. The universe had
turned unacceptable, something he never greeted with equanimity. I decided
to try and divert his misery by hauling him up on the long Country French
dining table and combing some of the knots out of his shag. When that
merely reinforced his overall gloom, however, I called it quits, located a
consoling rawhide stick for him to gnaw, and poured a brandy. It was along
about then, shortly after nightfall, that Tam finally appeared.
A cab with snow chains dropped her off (she'd come directly from the
office, which Noda had just shut down for the weekend), and I helped her
navigate the sleet-covered steps. I got the immediate sense that her first
impression of my living quarters was unchanged from the old days. In spite
of all the art, armor, and antiques, the place had a poignant rootlessness
about it. Boys like toys; they just get more expensive as the bank account
grows. Also, since she'd been in the man game long enough to spot a
divorce-rebound case a mile off, she probably had me figured from the
start: part of that army of emotional paraplegics in our feckless day and age.
After the MITI twist, however, I suppose she was ready to consult with
somebody concerning the direction things were headed. I warmly invited

her downstairs to the sisal-carpeted den just off the garden and dumped
some logs in the fireplace. Next I pulled out a few discs—Mendelssohn
seemed about right for some reason—and offered to whip up a batch of
margaritas. 'Twould be, I dared to hope, a long winter's eve. Alas, she said
no thanks, a club soda and lime would do fine. Looked as if I would be
working barehanded, without aid of that universal socializer, distilled spirit,
so I rustled up a Perrier, then poured another snifter of brandy for myself.
Since she appeared exhausted, my first suggestion was she kick off her
shoes and get comfortable. No argument.
After settling in, shoes off and feet to the fire, she announced she was
ready to hear what I'd come up with.
Before an awkward silence could grow, I snapped open my briefcase.
"Dr. Richardson, in keeping with the ground rule that this is a formal
business meeting, let me introduce my first agenda item." I flashed her my
best smile, then pulled out the purloined page. "This is part of the
paperwork Mori seems to have brought with her. I don't understand too well
what it's all about, but my first impression is that somebody has decided to
do some major tinkering with your program. Take a look at this and give me
an opinion." I passed it over.
She glanced down, then back at me. "Are you supposed to be bringing
DNI documents home?"
That was her first reaction, swear to God.
"Look, this just accidentally got in with some of my photocopies. All it is
is a list of companies. And I didn't want to talk about it there in the office." I
reached over and ran my finger down the string of firms, then to several
columns of numbers off to the right. "The question is, what are these outfits
suddenly doing on DNI's buy list?"
She studied it a second, looked around the room, and said exactly
nothing.
"Doesn't that seem at all strange to you?" I finally spoke up. "As I
understand the plan, you want to shift more corporate funding into research
in the companies you're buying into? I do have it right, don't I?"

She nodded.
"Okay, then you're with me so far. But take a look at this." I indicated the
column of numbers. "That's the current research budget for these firms—it
says so right up there on the top. Presumably these figures came out of the
analytical setup down on eleven. Does anything about those figures seem
out of line?"
She looked at it, her eyes widening, then narrowing.
"Well, I don't know what this sheet is all about." She glanced up. "These
companies aren't part of our buys."
"Got news for you. I think they just made the team." I pointed to the
heading. "See that—'ACQUISITION SCHEDULE: REVISIONS.'"
When she said nothing, nada, I continued, "But you're right; they weren't
on the original list. The reason being, I would surmise, that they didn't need
any of this so-called management Rx you guys are supposed to be cooking
up. Look at that one, and that one. Even I know enough to realize those
outfits are operating with a real cash surplus right now, have plenty of R&D
funding already, and hence are doing just fine, thank you. The figures, in
fact, are right over there in that column on the right."
"Matt, we don't know what this is for."
"True, true. So let's just play pretend. And to make it fun, let me show
you something else." I rummaged through my briefcase some more, finally
extracting another paper. "I copied a corresponding page from the file on
current buys."
I laid it alongside the first.
She picked up the second sheet, checked it over. "I helped compile this
list."
"Then maybe you'll see what I'm saying? Format's the same. The only
difference is, some of the dogs have been dropped and replaced by some
very well run corporations."
"You're right about that. All high-tech, heavy research investment."
Progress? The first scale to fall from her eyes?

"Then let's play another round of this 'pretend' game. As I understand it,
you and yours put together this original list of companies for one main
reason: lousy management. But all of a sudden the outfits in the worst shape
on list number one have disappeared on list number two. Meaning, I would
assume, that they're no longer part of the program, at least as it's laid out on
this revised version Mori must have brought in from Tokyo."
"What are you trying to say?"
For chrissake, what did she think I was trying to say?
"Oh, nothing much, I suppose. Except that it looks to me like
somebody's just knifed your program in the back. All of a sudden DNI's
going to start buying outfits that already have good management, not to
mention heavy research commitments. So what exactly is anybody
supposed to be doing to help them along?" I paused. "Maybe a better
question is, who removed those others, the ones now winging it on a hope
and a prayer."
She laid down the two pages side by side and began to compare them in
more detail, a finger here, a finger there. But strictly no comment.
Along about then Ben got up and checked out the sleet- covered garden,
then lumbered back and plopped down beside us, clearly expecting a pat for
diligence in the line of duty. She remarked that English sheepdogs always
reminded her of a big flotaki rug. After that put-down she returned to the
lists. I hoped the poor guy's sensitive ego wasn't mortally fractured.
Well, she announced finally, my so-called discovery didn't add up to
much.
"Matt, I officially have no opinion about this. It could mean anything."
She shrugged. "Maybe the new twist is to start with the companies that can
benefit the most from coordination. Take on the easy job first where the
payoff will be greatest. Save the tough ones for later."
"Oh, sure. Who knows? It could all be very innocent, right? I mean, for
all we can tell, the moon might really be green cheese." I wondered what
had gotten into her all of a sudden. It was plain as day what was happening.
But instead of congratulating me on my sleuthing, she was turning obtuse.

"Tell me exactly how you got this sheet."
"Like I said, more or less by accident." I told her the story again. "I was
about to chuck it, then I took a second to mull it over. That's when I got to
wondering why the numbers seemed so inconsistent. Next thing I noticed
was the new list of players. All of a sudden the heavens opened. A vision." I
got up to freshen my brandy, then came back. She was still sitting there,
maybe too exhausted to think straight. "But I take it you don't believe my
little epiphany means anything?"
"Since I don't know what it means, I'm not going to engage in a lot of
uninformed speculation."
Good Christ, I thought, what's happened to all her reputed brilliance?
"You know," she went on, "I don't think you should be taking any more
documents out of the office. There's a reason for all the security."
"Hey, back off. I just have boundless curiosity." I still couldn't fathom
her lack of interest . . . no, make that hostility. "Look, I don't claim to
understand how birds fly, how fish swim, or how this whole damned picture
fits together. However, my new, albeit uninformed, observation is that Noda
and Company are not exactly giving us the fine print on their scenario.
Exhibit A: this strange new list."
"I think some fresh air would be nice." She rose to her feet, located her
shoes, and strolled over to look out at the garden. The sleet and snow was
about a foot and a half deep. "Why don't we go into the back?"
"What?" I stumbled to my feet. "Do you have any idea . . ."
She looked at me a bit funny, then made some hand signals.
Huh?
Finally I realized she was telling me she didn't want to say anything
more inside the house.
Talk about paranoid! Suddenly the reason for all her hemming and
hawing over my little theft came clear. She actually thought we might be
bugged! Get serious, lady.
Anyway, she gave me the cool-it sign, then calmly started putting on her
coat. Astounded by the possible dimensions of human mistrust, I dug out a

sweater from behind the couch and opened the door. She was still nursing
that damned designer water.
Ben snapped to alertness and galloped to the door, whereupon he
confronted the weather. His strategic decision, executed with lightning
speed, was to switch into his patented "zone defense" surveillance mode
against backyard trespassers, which required staying inside where it was
warm. I gave him a pat, freshened his water bowl, and followed her out into
the snow.
There was a brief lull in the weather. The sky glowed red from all the
streetlights, at least what you could see of it through the surrounding
brownstones and the leafless ailanthus tree at the back. I looked around as
Ben gave the fence one last survey, then plopped down and settled his chin
onto his paws with a grunt.
Tam, I suppose, had finally concluded I wasn't pulling some kind of
loyalty check for Noda, so that was when she opened the real can of worms.
"How long was she making copies? I mean, you were standing right
behind her."
"Mori? I don't know. Less than a minute." I examined her, a trifle
puzzled. "Why?"
"How many pages?"
"Probably half a dozen or so."
She just stood there a moment, gazing up at the sky, then she went back
inside, stepping around Ben, and returned with the sheet. "Did you notice
this?" She pointed to the upper right-hand corner.
I took it and strained in the faint light from the back windows. "It says
'129/147.'" I looked up. "You think that means . . . ?"
"I think your episode suggests at least two things." She took back the
page. "The first one is, this is part of a much larger document."
"With you so far. A hundred and forty-seven pages. And the second?"
"You said she only made half a dozen copies, then overlooked this?" She
paused. "Don't you think Akira Mori can count?"
At that moment the snowy night grew silent as a tomb.

"What are you suggesting?" I finally blurted it out. "That she left this on
purpose?"
"Maybe. But I don't have the slightest idea why."
"Christ, you have a very mistrusting mind." I slogged on through the
snow for a few steps, then turned back. "I'm convinced it was accidental."
"All right, let's just say that's a possibility for now. But what we do know
for sure is we'd better get our hands on the rest of this."
"Hey, don't look at me. I'm already in this scam deeper than I ever
intended to be. I say we either play their way or cut and run. We start
getting too nosy and we could end up on the wrong end of one of those
Uzis."
"Matt, there's something else I noticed about the list. It's ominous."
"Care to elaborate?" I kicked at the snow.
"Well, not out here. I'm freezing." She pulled her coat a bit tighter. "Is
there someplace inside where we can talk?"
"I've got an idea. But let's warm up first." I led the way back in. The fire
had died a bit, so she settled on the floor next to the hearth, the smooth
contours of her cheeks golden in the flickering light.
"Sure you won't have a brandy after all. To combat the chill?" The
quartet Opus 44, No. 1, was enveloping us, both violins emerging out of the
shadows.
She looked up and smiled. "Maybe it would be nice."
I fetched it, slid onto the floor next to her, and stretched to stir the coals.
Ben sauntered over to keep me honest, plunked down, and was immediately
out like a light.
"How're we doing for warmth?" I propped the poker against the side of
the mantel, then reached over and touched her tangled hair lightly with my
fingertips. To my everlasting surprise, she leaned next to me.
"Much better."
"Maybe we should both bail out right now. Tonight. Why not just go
down to my place in the islands and monitor the apocalypse off the satellite
dish? Watch MITI eat America."

Was I joking? Only partially. Down home we have a saying about folks
with a certain . . . je ne sais quoi. They'd do to ride the river with. In my
book Tam was definitely one of the riders.
The fire snapped and startled Ben, who glanced up, checked out the
sleet-covered garden, then grimly resumed his snooze. She reached over
and gave him a pat. The first time. "You know, I can't believe MITI is
behind all this. I know at least one MITI person myself."
"You know somebody in MITI?" I was a trifle taken aback. "Who?"
She stared at the fire. "His name is Kenji Asano. You wouldn't have
heard of him."
I lay there for a moment listening to the quartet, my memory registers
running a quick sort. Then it came to me. Kenji Asano was the MITI guy
Henderson said had masterminded Japan's rape of the U.S. semiconductor
industry.
"You actually know him?"
"Sure do." She smiled. "Very well."
Shit. I didn't really need to hear this. "That sounds like a little more than
a professional acquaintance." I looked at her for confirmation.
"A little."
Okay, I thought. Guess we're getting down to the straight story here.
Press on. "Well, I have some news you may not like. This Asano genius
personally engineered the destruction of the U.S. industry in RAM chips.
Probably the most devastating sneak attack on America since Pearl Harbor."
She stiffened. "Who told you that?"
"Let's just say I heard it. So what's this guy doing all of a sudden saving
U.S. high-tech industry? He's already cost this country tens of thousands of
jobs and literally billions of dollars."
"I don't believe it. I know Ken. Sure, he works for MITI, but his job is
overseeing Japan's own research in supercomputers. He's very proud of
their progress."
Oops. I swirled my snifter. "Whatever you say. If that's really true, then
excuse me. I take it all back."

She looked up—probably not believing my diplomatic reversal—and
watched as I casually slipped my arm around her waist. I couldn't tell if she
wanted it to happen or not.
Thinking I might have some momentum going, I reached back and
pulled a couple of wide cushions off the couch, stationed them by the fire,
then eased us both against them. I tried to do it with naturalness, finesse.
It wasn't happening.
"Matthew, underneath all that unnecessary bluster, which is just as I
remember, you're still a half-decent guy, which I also remember. But I don't
really think this is a good idea." She looked at me, her face highlighted in
the orange glow of the embers.
"I hope it's not because you have other commitments." I heard my voice
harden. "Like maybe in Japan."
"I'm just a little distracted tonight, that's all." She watched as I trailed a
finger around the hard tip of a nipple beneath her shirt. Gently she moved
my hand away. "Don't start."
"Maybe I can at least get a rain check." I retired from the field.
"Possibly." She smiled, then gave me a telling glance. "A while ago you
said something about another place."
My soundproof chamber?
"Right." I rose. "We're always open around here for travelers on a frosty
night." I helped her up. "And for this evening's special introductory offer,
there's a hot tub down the hall. Why don't you let me fill it, and you can
unwind those muscles for a while, Japanese-style or California-style or
whatever. Do you good."
She looked me over a second, then smiled. "Lots of nice, loud running
water?"
"Exactly."
Off we went to the Italian-marble bathroom there off the downstairs
bedroom. I'd installed that little indulgence for Joanna back during happier
times; these days I used it as the world's largest laundry hamper—ripping it
out would have cost a fortune. Jo's revenge, I called the thing.

She marched in, took a look about the room, which had one of those big
tubs trimmed in redwood, and said it reminded her of a place near Ise. She
did at least have the discretion to omit the circumstances of that occasion.
What happened next sort of shook my cool, my being a good Texas
lapsed-Baptist. You see, I'd never bought into the nudity-is-wholesome ethic
of the Age of Aquarius. Passed me right by. I mean, where's the fun in life
without a little forbidden fruit? But Tam just began shucking her clothes.
Everything. Kept going till she'd even doffed her little beige knickers, piling
everything one piece at a time in a neat heap on the counter. Just like that.
While bold corporate raider Matt Walton stood there in terminal
astonishment, grasping the edge of the sink as if it were a life preserver. My
nonchalance was an Oscar-winning performance.
Now in the attire God gave her, she calmly inquired if I had any bubble
bath.
"Well, ah, sure, I mean, I suppose so, probably somewhere around here.
If not, there's probably a box of Tide in the basement." I groped blindly in
the cabinet and my hand fell upon a pink bottle whose label read "Mr.
Bubble." What's this? Then I realized it must be some suds stashed there by
Amy. Bet she saw somebody soaking on TV and concluded that's the way
grown-up women behaved. My God, it's in their genes.
Then I turned around.
Tell you one thing, Dr. Tamara Richardson was still in great
shape. All of her. Was she pulling a tease number on me, or just doing what
comes naturally? Sad to say, I fear it was the latter. I guess she'd somehow
internalized this Japanese idea that nudity is no big deal.
"Tam"—I finally found my voice—"you're something else. I know
you're smart, and I'm beginning to remember you never were all that
retiring. How about refreshing me on a few of the other things I seem to
have forgot."
"I think I wanted to be a boy." She laughed as she sampled the water
with her toe. "I thought they had all the fun." Now she was pouring in a test
portion of Amy's Mr. Bubble. "Then I found out girls could do anything

boys could, but usually better. So I stopped worrying about it." She stepped
in.
"Easy. You're talking to an unreconstructed male chauvinist."
"What else is new? You all are at heart. At least you have the decency to
admit it." She dumped in the remainder of the pink gunk. Will somebody
please tell me why women, all women, go for that stuff? An exaggeration,
you say? Ever see one turn it down?
"Hey, I'm trying to deprogram myself, but it's uphill work." I watched as
a perfectly formed breast disappeared beneath the foam. "I tend to be old-
fashioned."
"I recall all too well."
"Well, give me a chance." I leaned back against the sink. "You know, this
striptease isn't helping repress my primal male instincts a whole heck of a
lot."
"Matt, for somebody who's supposed to be an expert on Japan, you've
understood very little about us."
"Us?"
"You know. I'm half and half." She flashed me a Mona Lisa smile as she
was wrapping her hair in a towel. I found myself thinking that at least she
shaves her underarms, a minor concession to conventional propriety.
"Well, so what. I'm an equal-opportunity seductionist. That is, when I get
the opportunity."
"Not making much headway tonight, I fear." Another tricky smile. She
was starting to drive me distracted.
"Thought you'd never notice."
"Matt, you're an emotional basket case. I've seen plenty." She looked me
over sympathetically. "Sorry, but I've got enough problems of my very own.
You'll have to manage your own salvation."
"Could be you're just deceived by my sensitive nature." I leaned against
the counter, playing peek-a-boo with a tan nipple now half-concealed in the
bubbles. "Mistaking it for brain damage."

"Uh, uh." She shook her head in the negative. "I read your gender pretty
well."
I was beginning to get a little annoyed. Who needed this? "Tell you
what, Dr. Richardson, for all my putative failings, I do happen to possess a
modest allotment of native wit. And my male intuition tells me your dance
card is full right now. That same right-brain perception also suggests it has
something to do with this MlTl honcho Asano."
"So?"
"So that upsets me for a couple of reasons, only one of which will
probably be of any interest to you. I don't think you have an entirely open
mind on the possibility MITI or somebody may be about to try and nail this
country to the wall. Because if you admitted that, you would also have to
admit something you apparently find distasteful to concede about your
Prince Charming." I watched her eyes grow sad. "Stop me if I cross the line
from preaching to meddling—to use a little expression from my youth."
"Matthew, you've just ceased being nice." She looked down. "What do
you do if you think you trust somebody and then you find out maybe that
trust is . . . misplaced?"
"Old Ecclesiasticus, back in Bible times, told us, 'In the time of
adversity, consider.' As advice goes, that's still probably sound value for the
dollar. Like for example, you might want to back off and do a little thinking
on whether Noda and his crowd have been using you, and me for that
matter, like a couple of patsies."
When she said nothing, I pressed on. "I walk into the office yesterday,
the first thing I hear about is some MITI connection, then tonight I hear
about your MITI connection, and it's starting to sound like the same tune.
Like maybe these guys have been playing you like a violin."
"But why me?"
"Credibility. And low profile for MITI's grab. By sending you out to
meet the victims, they've thrown the hounds off the scent. Dr. Save-
American-Industry has come to help. You're so goddam clean, Tam.
Impeccable credentials. You're gold to those guys." I was set to give her a

blast, but I decided to try keeping the lid on for once. "Maybe a better
question than why they chose you is why you went for it. How did they
brainwash you?"
"Nobody brainwashed me. I still think Noda's being straight. He can
think in global terms. That's a rarity."
"And how about this Asano character? You sure gave me the message to
back off when I questioned his intentions."
"Maybe I've been thinking with something besides my head." She sighed
and leaned back. "But then, maybe not. I have no reason to believe he'd
mislead me."
"Look, I don't know anything about the situation. But I respectfully
suggest you ought to reflect on that possibility." I looked at her. "By the
way, I seem to remember you said there was something else about the list
that struck you as odd."
"It has to do with the kind of research being done by those new firms on
the list. A pattern." She paused.
"What pattern?"
"I'd rather not say just yet. Until I'm sure. It's probably just my
imagination."
Something snapped inside me about then. Anger. Tam Richardson, I was
rapidly concluding, was being used by those bastards. And as best I could
tell, this idealistic woman couldn't let herself believe it. The situation
royally pissed me off. Even more when I also suspected this Asano operator
had somehow been playing fast and loose with her heartstrings. I decided
then and there I wasn't going to let them get away with it.
A strange psychology takes hold of you when you sense you've been
temporarily outflanked; I think it's that primal human response somebody
once dubbed flight or fight. You realize you've got two choices: you can
either stand your ground, or you can make a run for the sidelines. So what
to do about Dai Nippon and Noda and Mori and Asano? Right then and
there I made a tactical decision. I decided that—like the caveman facing the

saber-toothed tiger—the best defense would be to try and make the beast
back off.
More to the point, it wasn't merely Tam that was imperiled. Maybe
Henderson's suspicions were right; maybe this was the handshake that
turned into a karate flip, the beginning of World War II, Part B. So I figured
I owed it to myself and everybody else to at least uncover the truth.
No entity, I've always believed, is unstoppable, no matter how massive.
There's always a soft underbelly somewhere. After a while any big
organization gets cocky and makes a blunder. Sometimes, in fact, you can
lure them into it. I concluded there was only one way to go, head-to-head
with Dai Nippon. You want peaches, you shake the tree.
"Okay, you've got your theories, I've got mine. But for both our sakes, I
think it's time we moved on them."
"What do you mean?" She looked up.
"I suggest we start with a little information gathering." I turned on the
hot water again, nice and noisy, then continued. "What do you say we go up
and take a little private look around the offices."
"Tonight?"
"What better time. Weather alert, right? Nobody's there. It's perfect. We
can fast-talk the security, get in, and check the place over."
"And where, exactly, do you propose we look?" She examined me
skeptically. "I'm there every day."
"How about that new office Mori commandeered for herself. I think we
ought to poke around and see what she's got. Maybe try and locate the rest
of that document, if nothing else."
"I'm not sure we ought to be doing anything quite that drastic, at least not
just yet."
"I didn't claim it was approved by Amy Vanderbilt. I just say we ought to
give it a shot. If we don't look into this, who will? Maybe we'll find
something to explain the so-called pattern you think you see."
"Matt, for all I know, that may be nothing more than a coincidence. If
Noda found out we'd done something like this, the whole ball game would

be over."
"That's the chance we take. Let's just see what we can come up with,
okay? Personally, I'm beginning to think Noda and your pal Asano are both
world-class con artists." I poured a little more cognac for us both. "But
whoever's right, we should at least try to find out. Who knows? What if it's
becoming a MITI show now, for some purpose neither of us can imagine?"
"All right." She looked apprehensive for a second, only a second, and
then her eyes hardened. "You know, Noda and Mori claim I'm Fujiwara ...
on my mother's side naturally." She laughed. "And you know something
else? I feel in my bones that it's true. I believe it. I'm Japanese, Matthew,
and I'm proud of that."
I glanced over at a set of samurai armor stationed just outside the
bathroom door, glistening enameled steel. '"Tell you the truth, I'm second to
nobody when it comes to admiring Japan's ethic and their guts. But I tend to
draw the line at 'master race' talk. As a matter of fact, I wouldn't object too
strenuously if they did manage to beat us in a fair contest. Hell, we won
round one and they were remarkably sporting about it. But what I want is to
make sure round two is fought on level ground. No inventing new rules, no
rabbit punches or below-the-belt stuff. That's all I ask."
"How about showing me some of those swords you claim you collect?"
She came out with it, just like that.
"My pleasure. Like nothing better."
Besides, it seemed a good time for a change of pace. I straightened up
and headed for the back parlor upstairs, then around the corner to the sword
room, its door now fully repaired from the strange break-in. I fished out the
key and snapped open the lock.
Funny thing, but walking around fully dressed / had started feeling out of
place. Maybe it is merely a state of mind.
All right now, where to start? This was a crucial moment. My first
impulse was to go all the way to gold, that marvelous katana dating from
the early Kamakura, or even before, said to have come from the forge of the
Shogun Yoritomo Minamoto's personal swordsmith. But wait a minute.

After that, what? Maybe the absolute tops should be saved for a more
auspicious moment. That sword was, to my mind, an almost sacred work.
Maybe instead we ought to start with something a little offbeat, then
gradually work up to the best and sharpest.
The obvious choice, in fact, was a piece I considered a real curiosity,
racked there on the left, top slot. As I lifted it off and slipped it out of its
scabbard, the metal glistened like a mirror, reminding me how long it's been
since I'd oiled and pampered my playthings.
"I'm afraid nothing here was handed down by the Sun Goddess." I was
coming back down the stairs a little unsteadily, like a half-drunk samurai.
"But this one's kind of like the old style, at least the metallurgy is. Unusual.
Heavy on copper and tin. In a way almost closer to bronze than steel."
Then I proceeded to point out a few interesting features—the nice curve
of the face line, the burl grain, the Shinto deities on the elliptical tsuba hand
guard, that kind of thing— taking care to keep it out of the damned bubbles.
I was starting to get wound up, as all enthusiasts do with a captive audience,
when she tactfully cut me off.
"How's the handle attached, or the grip, or whatever it's called?"
"That's the hilt, the tsuka. Held on with a little wooden peg stuck through
a hole in the metal. Here, let me show you." I had a small brass punch on
my key ring that was specially designed to push it out. "Under the grip
there's a wrapping of silk braid, and then a layer of the belly skin of a
stingray, to protect the steel. But you just remove this peg and the whole
ensemble slides right off." I removed the handle and laid it on the sink.
"Now you can see the untempered end of the sword, the tang or nakago as
it's called." I passed the weapon to her, blunt end first. "That's where a
swordsmith engraved his signature, his title, the place it was forged. So you
always should check. On a really important piece, there may be cutting tests
noted there. Like maybe they tried out the blade on a criminal or two just to
see if it worked. Quality control."
"God." She shuddered. "Really?"

"Licensed testers did it and certified it in gold engraving on the nakago.
Some of the ones upstairs have it. But this one's an ubu, virgin." I watched
her turn it in the dim light. "Careful now. That edge is very sharp."
"How can you tell if it's really old?"
"Lots of ways. The grain, the signature, and then too a good one should
have some rust there on the nakago, black not red."
She held it up a second and examined it.
"Virgin, huh? No signature?" She had a funny, almost embarrassed,
expression on her face.
"Correct. But like I said, this one's not—"
"Then who was 'Nihon Steelworks: Nagoya'? Somebody you bought it
from?"
"Anybody ever tell you you've got a crummy sense of humor." I wasn't
smiling as I reached to take it back. Her crack annoyed me and I'm afraid I
showed it. Some things you don't kid around about. "That's a modern
foundry that turns out crappy—"
"Don't get testy. I'm only reading. Right there." She pointed to some very
faint English engraved into the metal.
"Christ!"
I grabbed it back and held it under the light to look. No mistaking. There
it was, plain as could be.
That's when I finally realized the thing was a copy. A goddam replica of
the original. Okay, a remarkably good one, but a fake nonetheless.
How did this get in my closet?
Could somebody have broken in and . . . ?
Suddenly it hit me. The robbery. Whoever had lifted my records must
have also pulled a switcheroo on this katana, leaving this piece of Nagoya
junk and disguising the deed by replacing the original grip and tsuba hand
guard. I'd been too loaded to notice.
I wanted to crack the goddam fraud over my knee like in the movies, but
you don't do that with a samurai sword, even a phony modern one. So
instead I flung it down on Jo's Italian-marble floor and headed back upstairs