Flash Crash Page 5

  It was an honor to work out at Vlad’s gym—especially for David, who was considered an outlier in his own community. Every single person at Vlad’s gym knew him personally. One didn’t just sign up at the front desk and accept a keychain and towel. They earned the right to be there. The men in the gym were tighter than tight and thick as thieves. They all grew up in the neighborhood and applied to themselves most of the same assumptions about the general ethical rules of life. Petrov and Roschin, two identical twin brothers, sparred in another ring beside David. Watching from outside the lines was the amiable and bushy-haired Baranowski, standing with Konstantin, who didn’t speak a lick of English at all. David continued to pound out the bag ferociously. He wished that one day his own colleagues, like Tyler, could meet these dudes. They were still David’s friends when it was convenient for both sides. But they were his people always. They’d attended the same schools since they were babes in diapers, and most of them had graduated from New Utrecht High School as “Utes.” Tyler would piss his pants if he could meet David’s old pals in their natural state. What did that say about David? God, how David would love to see the tables turned on Tyler for once. But that would never happen. Tyler would never come here in his entire life. Deep down inside, every man knows his true place in the world. That’s why David was punching a bag in a dingy boxing gym surrounded by a bunch of thugs who reminded him of his father, while Tyler played squash at the Yale Club.

  Left. Right. Jab. From across the gym, Vlad continued to clock David’s frenetic activity with cool detachment.

  ■

  After an hour or so, David rested. He padded into the old-school Russian banya in the back of Vlad’s facility. The paneled room had a small firewood stove set underneath a vat of water to create a perpetual haze of steam. A series of large wooden tiers were built into the sides of the space. Wearing a towel, David sat on the highest level and soaked up the steam, expelling oxidants. He opened his eyes as Vlad entered the banya.

  “Bad day, my peach? Haven’t seen you here in awhile,” Vlad said.

  David looked up and noticed that Vlad was completely naked, except for a diamond-encrusted pendant depicting a scorpion suspended by a gold chain off his neck. Vlad was a big guy, built like a giant oak tree. He sat down as close to the fire as he could muster.

  “Saw Cat this morning,” David said with a smile.

  “Ya. She told me. She said the pool was a nightmare. Every fuckin’ ten-year-old Ivan in town was there with three floatin’ noodles and a watergun.”

  “Same pool. Just a whole different experience from ours.”

  “Yeah. Instead of ice cream bars, we had bloody noses.” Vlad chuckled.

  “And worse,” David said. “Thanks, though. I know Marina needed the day off.”

  “Anything for you and your family. That’s the truth,” Vlad replied. He stood again and ambled towards a venik hanging from the wall. The venik was a small broom created from the branches of a birch tree. Vlad soaked the tool in a bucket of ice water. “How’s the devil?” Vlad turned back and asked. He handed David the venik. “Do the honors, please.”

  “You mean the bank?” David asked. David held the venik and Vlad turned away from him. David did exactly what the instrument was designed for and briskly smacked Vlad’s back, then targeted the major muscles of Vlad’s shoulders. Vlad shook his head as he received the painful whipping voluntarily. His mouth wobbled back and forth humorously, spittle flying from his mouth.

  “Buncha’ Ivy League pricks. Never know why you’re happy working for a bunch of pompous morons,” he finally muttered.

  “I’m not one of them,” David replied.

  “I know it. And so do they,” Vlad said.

  “Hey. I’ll do anything for Mikey.”

  “Ya. I know,” Vlad replied. “Remember when we were his age? How good we were at hoppin’ those trains on Coney Island down by Gravesend?”

  “That was fun. But we were dumb.” David grinned at the memory.

  “Brave—we were brave.”

  “Most of the time we were just running away from the five-o. Call it what you want. But I hadn’t learned about risk management back then,” David said as he finished slapping Vlad with the venik.

  “You really do sound like a banker.” Vlad laughed a huge guffaw, which bellowed through the chamber. “Been a long time since you stole anything with your hands, hasn’t it? Now it’s all with your head?”

  “I take pennies from other traders all around the world,” David said. “Legally,” he added after a moment’s thought.

  Vlad picked up the cold-water pail. He poured the remaining water over the hot coals situated in a cavity above the banya’s wood fire. A massive cloud of steam erupted into the room and all visibility was instantly reduced.

  “Now the kids hang out more than us,” Vlad said ruefully.

  “Kids have time. We don’t.”

  “I was thinking . . . What if we did another scuba trip with the girls sometime? Like to Belize,” Vlad asked.

  “Sure. Sounds good,” David replied. He checked his watch. “I gotta run, Vlad.” He stood up while Vlad talked to his back.

  “Life is going good for you now, ya?” Vlad said. “I get it. But don’t forget . . . A rising tide lifts all boats. You don’t learn anything about a man when things are good. And you learn everything about him when it all turns to shit.”

  “You’re a poet,” David turned and said.

  “Nah. I’m just a gangster. But at least I know it,” Vlad retorted.

  David grinned and exited the banya.

  SEVEN

  AS THE SUN FINALLY set on Sunday evening, David parked his light-green Honda Civic in front of his house. Hair freshly washed and combed, he walked up the steps with his gym bag in hand. It was at the top of the stairs that David abruptly noticed the front door was wide open. He hightailed it up the remaining front steps towards the glow.

  “Hey guys!” David yelled once he was inside. But there was no one in the kitchen. That was unusual around dinnertime, especially for Mikey. As David walked through the kitchen, he noticed a knife lying out on the floor. David instantly became more alert and insistent. “Mair? Mikey!” he called out loudly. No response.

  David scrambled around the entire first floor of the house but couldn’t find any sign of either of them. He ran up the stairs and into the master bedroom. Nothing. In Mikey’s bedroom? No one. The guest room? Nope. Then David heard an unusual ringing noise emanating from downstairs, towards the kitchen. It wasn’t a ringtone he was familiar with.

  He instantly raced back downstairs towards the kitchen. David noticed an older-model flip phone on the counter. He must have missed the device on his first mad dash through the room. An “unknown” number was calling. The call stopped before David decided whether or not to answer it. He was already beginning to feel a horrible premonition of the future. This was not good. This was an emergency. He stared at the phone and then noticed Mikey’s Froggie Finder sitting on the counter as well. All of a sudden the phone began to ring again. It was the same caller. David took a deep breath and finally answered. A man’s scrambled and filtered bass voice boomed onto the line.

  “David Belov?” the man asked through electronic garbles.

  “Who’s this?” David said.

  “We have Marina—and your son Michael,” the man said quickly and confidently. Although David was a cynic, there was something in the man’s tone that made it very clear he wasn’t lying. David crumbled onto a chair while the man continued to speak. “You have something very valuable to us, and now we have something very valuable to you.”

  “Who do you think I am? We don’t have anything! I barely have savings . . . I’ll give you all of it,” David exclaimed. This couldn’t be happening. He’d done everything he possibly could in life to avoid a circumstance exactly like this. And yet it was occurring, right in front of his eyes.

  “On the contrary. It’s not your money we want. What you have is in your head, M
r. Belov,” the man said slowly.

  “What could you possibly mean? What do you want from me?”

  “This phone contains a microSD card. There is an assignment on the card. Follow it. Keep the phone on you at all times,” the man ordered.

  “What’s on the card?” David asked.

  “All you need to do is read. Do your part—then get out of the way.”

  “No. Wait. How do I know you have them? I need proof.”

  “Your wish,” the scrambled voice said.

  The flip phone suddenly vibrated. David looked down. There was a small pixelated photograph of Marina and Mikey on the cell’s tiny screen. They were handcuffed to bedposts on a bed in a blank-looking apartment. Duct tape had been wrapped liberally around their heads. David began to hyperventilate.

  “Mikey needs his shots. He’s a diabetic,” David scrambled.

  “Yes. Your wife informed us of that fact.”

  David raced to a closet in the kitchen. He opened it and found that all of the family’s unopened packages of insulin were still in the closet.

  “He will not receive any insulin until you save him,” the man said.

  “No! You can’t do that. He won’t make it for more than twenty-four hours. I’m telling you—that’s the truth.”

  “You don’t even have twenty-four hours. We may call you again. Do not call us back. Do what we ask and save your family. This number is scrambled.” With that, the unknown man hung up.

  “Wait! Shit!” David screamed. He immediately popped open the battery cover on the flip phone. He pulled out the microSD card as instructed and ran towards his office.

  David and Marina’s house contained a converted sunporch along its flank that doubled as David’s office. It was packed with computers, partially assembled motherboards, and random circuitry lacking a home. The remnants of a technical past. David scrambled for a microSD reader. He found one in a box of other peripherals and hooked it up to his computer. The drive appeared on his desktop. He clicked on the folder, and opened a readme file located within. He stared at the instructions on the screen but he couldn’t believe what he was seeing. This definitely wasn’t what he expected. There were no programs on the drive. No executables. No algorithms. No raw code. Just a simple text file with instructions:

  “Crash the gold index 500 basis points. Tomorrow at 1:15 PM. Don’t worry about server room authorization. You’ll be approved.”

  David read the message again and again, trying to parse it for any additional information.

  “Oh Jesus. There’s no way. Oh god . . .” David whispered to himself. He quickly made a decision. It was a logical conclusion because he was a rule-following man and he’d always figured out how to solve his own problems. This was a completely insane moment in his life, and he knew exactly what one was supposed to do in a situation like this. He reached for his cell phone and dialed 9-1-1.

  After a few rings, the emergency dispatcher picked up, “State your emergency.”

  “My name is David Belov. I’m at twenty-one hundred Seventy-eighth Street, Bensonhurst. My family’s been taken—my family. . . . Two—Marina, and Mikey Belov. They’re gone—” David stopped as he heard the ringing of the flip phone again. He glanced down to his desk to see the “unknown” number calling him for a third time. He hung up on 9-1-1 and picked up the flip phone cautiously.

  “Do not call the police. I am not joking you. This will end very, very badly unless you do exactly what we have instructed you to do.” The garbled man’s voice was back and much more angry and threatening than before.

  David glanced sharply around. Were they watching?

  “I’m sorry. I’m so sorry,” David said. “The gold market? How do you expect me to do that? It’s swimming in liquidity. I’d have to send a couple million orders just to move it one percent.”

  “If the police come to your house, you will keep all the lights off and not answer the door,” the man said.

  “Okay. I will. I—”

  “You’re smart, David, but be smarter. Maybe you can find us—eventually. But there won’t be enough time for you to save them. When it comes to your task, I know you can do it. You were selected because you are the man for this job. I have full confidence in you.”

  “That—that’s my family you’re threatening.” David stammered.

  “Check your phone.”

  David looked down. A second photograph had been sent to him. It was Marina. She was still handcuffed, but her clothes had been ripped off and she was exposed down to her underwear. David observed the picture with horror.

  “Don’t hurt her. Do not hurt her. I’ll do it. I’ll do . . . anything,” David said.

  “This is your last chance. Complete your assignment. Only you can do it. If you don’t? There won’t be a third picture. There won’t be any more calls. Your wife and son will simply cease to exist,” the man warned ominously and then hung up on David.

  David turned off the lights in the kitchen. He walked into the living room and did the same. Standing in the dark, his house phone began to ring, startling him. It was a random New York number that he didn’t recognize. Must be the police again. He picked up.

  “Hi. . . . Yes. I just called. . . . No. Everything’s fine. I found them. Sorry about that. . . . Right. False alarm,” David lied to the dispatcher. Then he took a deep breath and sat back down at the computer with the instructions in front of him: Crash the gold index. Tomorrow.

  David loaded up his Borland C++ programming application and began to program frantically. His fingers typed incessantly on the keypad, forming a rhythm. The scariest part about the problem ahead was how easy he found it to solve. He had lied to the man on the phone. Considering that he had access to the buying power and trusted exchange connections of Montgomery Noyes’ servers, he knew that he would have no problem manipulating the market to do exactly as the kidnappers intended. Then again, they probably knew that already. His obfuscation was useless. David’s fingers continued to tap as fast as his brainstem would permit the code to flow out.

  But David wasn’t really focused on the words onscreen. All he could do was replay the moments of the last ten minutes in his mind: A knife on the floor. Was there blood? He didn’t think so. Maybe Marina had picked it up to defend herself? A new cell phone with a microSD card. Obviously whoever did this was well aware of his skills—his edge. The American ideal. He’d have to talk to his mother about that later. He knew one thing for sure: No one would go to this extent based on a fluke. Howard Bergensen kept floating into David’s mind as he typed. It had been just a few hours before when Howard was questioning him about the engineering of a flash crash. Did that mean that Howard could be responsible? No way. Why would Howard ever do something like that? Howard had too much to lose. That would be impossible. When you own a house in the Hamptons, you don’t kidnap housewives and children. It made no sense. David thought about the kidnappers themselves. They knew that he was calling 9-1-1. Or was it just a coincidence that they called him back? It couldn’t have been. So they were watching him in the house. Were they outside? Had they hacked into his computer or his cell phone? Something worse? Cameras? All of these thoughts raced through David’s mind like an endless conveyor belt ripping through an Escher drawing. There were too many moving parts to encompass the whole. If he focused too hard on one element, all of the other connective pieces would fall out of line.

  What David did know was that those pictures were real and the voice on the line meant what he was saying. He could do the work, right then, that might get his family back to him alive. That’s why his fingers rat-atat-tapped. While he wrote the custom code, he thought about whom in the world he could possibly go to.

  That’s when he realized that he was actually a lucky bastard—because he had a friend named Vlad Zhadanov. And if there was any time that Vlad could be useful, that time was right then. Should he go to Vlad? Vlad solved problems. But unlike David’s programming skills, Vlad was never elegant in his approach. And ther
e just wasn’t enough time.

  David wrestled with the decision in his mind as he typed. But before he could plan a new course of action, he’d already finished the algorithm.

  EIGHT

 

  AT ONE SIXTEEN ON Monday afternoon, David’s flash crash algorithm operated like a charm and Montgomery Noyes experienced a brush with Armageddon.

  ■

  On the evening of the crash, Howard Bergensen reclined in a bathtub at Windswept, his mansion in the Hamptons. There were only a few nights a year in which Howard would take a bath after work. His time was precious and he rarely splurged, but his wife and children knew to never disturb him on the rare evenings when he was soaking. They knew that bath days were the very worst ones. He sat in the piping-hot tub with an iced towel over his face and he listened to CNBC playing on the small flat-screen in the bathroom, still unable or unwilling to completely unplug himself from the situation.

  “After today’s flash crash, you’re wondering . . . Is the American dream dead?” one of the anchors pondered and subsequently self-answered, “Maybe it’s just on vacation.”

  The crash had shaken Howard, even though he was better prepared than the majority to stay on his feet no matter what calamities befell the markets. Howard was a survivor, but that didn’t mean he still couldn’t be shot out of the sky. He was acutely aware that he wasn’t infallible. That’s probably what had kept his career going so far. He’d survived much scarier moments in financial history, from the Long-Term Capital Management debacle to Black Monday in 1987, when the Dow dropped twenty-two percent in one day—not to mention the first tech boom and the more recent credit and housing crisis.

  But because he was also a human, Howard was worried about the tangential effects of the flash crash. He didn’t want this event to negatively affect his wife and kids—the same ones who would furtively glance into the bathroom every hour just to make sure he was alive. Marjorie was actually his third wife. And the kids still living in the house were his fifth and sixth kids. Howard had already planted two earlier generations of family tree, with whom he was certainly still intertwined, plus he had the newest version to worry about. All of his progeny required constant payments—“annuities” as he viewed them—because the bloodletting never stopped. Once child support was over, the kid was going to college. And Howard was not a cruel man. He loved his children. So he was going to pay for all of them to go to school. At that time it was Sebastian, from Howard’s second and shortest-lived marriage, who had just started at Columbia. What Howard had learned recently, via family unit number one, was that even after college graduation the expenses didn’t end. His second-eldest had moved to Los Angeles to be an assistant in the film business. Howard was convinced that he paid his gardener more to trim rhododendrons than his son was paid to coordinate big-budget movies. And rent wasn’t cheap in Santa Monica. More payments. And then his oldest, Caroline . . . Well, she’d gotten married. That costed money. And like clockwork, the baby came along. Hell if Howard was going to allow his first grandchild to grow up in an apartment in downtown Chicago. He knew that he was soon to be on the hook for a substantial deposit on a nice house in Evanston or Lakeview.