Hooper is with the SEC, and twice a month for about the last five years, except during dates which fall within his three weeks of federal employment vacation, of course, that agency has paid for him to attend a consultation with me. At first, he spent the entire time talking about sports – he’s a rabid Redskins fan, despite the fact that he’s originally from Cincinnati, and likewise dotes on the Nationals, Capitals and Wizards. That persisted, by the way, right through Bear Stearns going broke and getting bought by JP Morgan, the federal government takeover of Fannie Mae and Freddie Mac, Merrill Lynch’s hasty shotgun wedding with Bank of America, the complete, utter, raggedy-bottomed Chapter 7 bankruptcy of Lehman Brothers, the cliff-hanging eighty-five billion dollar AIG rescue package, a devastating freeze in international lending markets, the FDIC seizure of Washington Mutual, and the total collapse of publicly traded equity in September, 2008. No, not once during sixteen months of the most harrowing financial ordeal experienced by the American economy since 1930 did Hooper breathe a word about anything but sports. Then, in November, 2008, right after Obama won the election, he lapsed into a deep funk that endured all the way until the Inauguration, during which he would simply lie down on the office couch and take a nice ninety-minute nap. I certainly can’t criticize his taste in places to snooze – Lord knows I’ve sacked out on that couch myself plenty of times, and it’s mighty comfy, no doubt about it. Then, ever since Obama was ensconced as President, he has used every single consultation session to complain about the Democrats. And so it had remained – one meandering, incoherent rambling rant about creeping Socialism, illegitimate birth credentials, uncontrolled immigration and the rampant resurgence of the welfare state after another – until this Friday, when, at long last, I received a shock so overwhelming, I damn near fell out of my chair. For the first time, Hooper actually described a problem and asked me for advice on a solution.
“Tom,” he glumly informed me, “the SEC is going to investigate what happened to the stock market yesterday.”
“What happened,” I replied, “was the stock market fell a thousand points when nobody was looking and scared the pants off everyone in the world who has two sawbucks they can rub together.”
“Yeah,” Hooper agreed. “More or less. And that’s why that [expletive] over there,” he nodded curtly at my office picture window, indicating the White House, “wants us to find out what the [expletive] caused what happened.”
“That shouldn’t be too difficult,” I opined, “I mean, you folks at the SEC, that’s your job isn’t it – to know, among other things, what makes the stock market tick?”
“Where, the [expletive],” Hooper demanded with a derisive snort, “did you get a cockamamie idea like that?”
“Well,” I reminded him, “the sign on the front of the building you work in says ‘United States Securities and Exchange Commission,’ doesn’t it?”
“Humph,” Hooper grunted. “‘Equal Justice Under Law’ is carved on the front of the Supreme Court. You believe that, too?”
“Point taken,” I conceded. “But even if, perhaps, there isn’t really equality of justice for everyone at the Supreme Court, they do, nevertheless, hear cases and make decisions.”
“That’s because,” Hooper explained, “the Supreme Court still has a function to perform.”
“And the SEC, in your estimation,” I softly pressed, “doesn’t?”
“Of course not,” Hooper sniffed. “Not since Ronald Reagan taught us the truth about the evil influence of government interference with free markets, the Divinely inspired wisdom of Adam Smith, and the ultimate power of deregulation to create universal wealth and prosperity. So, for both Bush administrations, and even that [expletive] with that [expletive] hillbilly [expletive] Bill Clinton, in between, it’s been ‘hands off Wall Street.’ Yeah, sure, I’ve heard that even as late as 1986, before Alan Greenspan became Chairman of the Federal Reserve, a little bit of stuff kept coming in for the SEC to deal with, but after Phil Gramm got the Glass–Steagall Act repealed in 1999, the hand writing was on the wall: the financial markets are run by the smartest people who have ever lived and, if they are just left alone to do their work without unnecessary government meddling, then they and the Invisible Hand of God Almighty will see to it that everybody gets rich. And that,” he proudly stated, “is what I believe, and why I’m proud to be a Republican; and also,” he added with a wink, “how I got my job at the SEC.”
“So, in that case, what, exactly is it you do all day in that building which says ‘United States Securities and Exchange Commission’ on the front?”
“What everybody else in the federal government does all day,” Hooper informed me. “We surf the Internet, play with our Blackberries, send emails, chat on instant message, attend meetings and go out together for lunch.”
“No… ahem… working, by any chance?” I inquired.
“Work?” he sneered. “Are you [expletive] nuts? We have [expletive] contractors for that!”
“No… how shall I put this? No… thinking?”
“Not just no,” Hooper proudly proclaimed, “hell, no! We have consultants for that! Like you, for instance! Speaking of which, what do you think I should do?”
“About what?”
“About getting out of having to investigate what happened last Thursday,” Hooper huffed with a slight air of exasperation, “what else?”
“But,” I gently protested, “aren’t you the least bit… curious about what caused the biggest one-day fluctuation of the stock market in its entire history?”
“No,” Hooper shook his head emphatically, “not at all.”
“Okay,” I continued, “in that case, may I ask if the SEC has assigned you to investigate the matter yet?”
“No,” he admitted, “they haven’t. But lately, there have been these… rumors going around that Obama is going to start demanding results from the SEC. Which means anybody who gets assigned to the May Sixth Investigation Task Force is going to have to…” he hesitated, barely able to pronounce the phrase, “produce something.”
“Like what?”
“The rumor mill,” he confided, “hasn’t been real… ah, specific about that. But the smart money says we’re all going to have to make PowerPoint presentations.”
“PowerPoint?” I asked. “What’s the issue?”
“I…” Hooper hung his head sheepishly. “I’ve never used PowerPoint.”
“Well, that’s certainly no show-stopper,” I assured him. “You can just get a contractor who knows PowerPoint and have them do it.”
“Yeah,” Hooper acknowledged, “but that’s only the tip of the iceberg. Because my PowerPoint presentation would have to be… you know… based on some facts and stuff. I mean sure, you can put a lot of graphics in a PowerPoint presentation – they have all those neat backgrounds, and pictures of hands shaking, idea light bulbs and smiley faces and stuff, but the cold, hard truth remains, you can only put so many things like that in a PowerPoint presentation. Somewhere along the line, you have to put in some… some…. whatchacallit…”
“Content?” I prompted.
“Yeah, yeah,” he sighed. “And there’s where the big snag is.”
“Don’t worry about it,” I countered. “You can go get an IDIQ GWAC, or even just the plain old vanilla GSA Schedule, and order up a consultant to do the investigation, perform the research, and then write up the content.”
“But,” Hooper objected, “I’d still have to read what the consultant writes.”
“Not necessarily,” I suggested. “You could hire another contractor and have them read it to you.”
“Maybe,” he shrugged. “But in the end, I’d still be… responsible, wouldn’t I, for what the content says and all?”
“Theoretically,” I yielded. “But in practice, as we both are well aware, nobody who works for the United States federal government is ever held responsible for anything, anytime, anywhere, no matter what they do or don’t do, no matter what they are supposed to know, or… as is perhaps more applicable in this situation, don’t know.”
“I don’t care,” he shot back in a peevish tone, “I still don’t want to get involved.”
“How come?” I delicately chided. “It’s not like you’d have to do very much, and, given that the present Administration will be around for at least another two and one-half years, it might be good for your career.”
At that, Hooper knew I had him cornered and responded with a look which was the perfect imitation of a deer caught in the headlights of an oncoming truck. “I… that is…” he stammered, “uh… that stuff they do on Wall Street, it’s got a lot of… um, you know, math and stuff going on in it, and… well, I’m not too good at math, not at all. Plus I hear they use computers a lot and…”
“So do you,” I pointed out. “You said yourself you spend plenty of time surfing the Internet. There’s a lot of quite useful information on the Internet, articles about financial programming and trading algorithms, resources on mathematics…”
“I don’t,” Hooper interjected, “surf that kind of Web site a whole lot.”
“What kinds of Web site,” I wondered, “do you visit, then?”
Hooper pondered briefly, biting his lip, then spoke. “Triple X hot stuff, mostly.”
“You mean, you spend all day,” I sought to confirm, “watching, ah, pictures and videos in, um… questionable taste?”
“Yeah,” he affirmed, “me and just about every other guy in the SEC Headquarters building. My hard drive’s full of it, but some of the guys, they’ve got even more.”
“Where?”
“They told the IT contractors to put it on the network someplace,” he stated with an air of indifference, waving his hands in a dismissive manner. “Who cares what we do down at the SEC, anyhow? Those guys on Wall Street get millions, hell, billions, and what do I get? A lousy hundred eighty-seven thousand a year! Now tell me, why should I have to do jack squat for a piddling salary like that?”
“An interesting question,” I allowed. “But what,” I explored, “would you say if I told you I already know what caused the thousand point drop in the Dow last Thursday which set off a ripple effect that spread throughout equity markets all over the world?”
Suddenly, Hooper’s cloud of listlessness disappeared like a street corner knot of homeboys in Northeast who just saw a SWAT team pull up in front of the local crack house. “You know?” Hooper exclaimed as he sat bolt upright. “You already know? What was it, some guy at the NYSE who entered a trade to sell sixteen billion shares of Johnson and Johnson in reaction to the FDA finding huge filth and tainted products at their childrens’ Tylenol plants?”
“No.”
“Was it the one about the guy at Citigroup who posted a futures trade based on a price for Proctor and Gamble that was thirty-seven percent lower than it really was?”
“Negative.”
“Those riots in Greece about the Euro that killed three people when a mob burned down the central bank?”
“Nope.”
“That oil spill in the Gulf of Mexico that’s about to put BP in the toilet?”
“Afraid not, old boy.”
“The ninety-six percent plunge in the price of Phillip Morris?”
“Effect, my friend, not cause.”
“Then it must have been…” Hooper stuttered, suddenly realizing, “it must have been all those trading programs on all those computers, executing all those stock transactions!”
“Correct!”
“And nobody could stop them!” Hooper shouted.
“Actually,” I corrected, “the secret your investigation will find is that they could have, but they didn’t.”
“What? Why… why not?” Hooper managed to mutter in astonishment. “How come the guys on Wall Street who were in charge of those programs didn’t stop them?”
“None of those guys were paying any attention to their automated trading software,” I revealed, “not a single one of them. Why should they have been bothering with that – don’t those programs trade faster and better than any human could? Isn’t that why Wall Street used them in the first place?”
“Really?” Hooper gawked at me as if I had two heads. “What were they doing instead?”
“Visiting Triple X hot stuff Web sites,” I said.
Hooper smiled. “In that case Collins, I guess you’re absolutely right – if they pick me to be on the May Sixth Investigation Task Force, I’ll go right along with it, PowerPoint presentation and all!”
“Might as well,” I congratulated. “And I’d say you’re doing the right thing, too.”
“Absolutely,” Hooper grinned as he rose and extended his hand. “Because if there’s any explanation for what the financial markets did on May 6, 2010 I know my bosses at the SEC can understand, it’s got to be that one!”