“But they’re not fools.
“Corporations can’t downsize and outsource the work overseas anymore—not like they could in the noughties—not without a hostile social-responsibility audit and crippling fines. But governments can. And they can get rid of the national debt by parcelling it up as, what’s the term, debt securities. They hand the debt securities over to some fictional entity like, oh, a breakaway republic, in return for buying its independence. Don’t look at me like that, there’s a long history of countries buying themselves out; Haiti did it with the French empire. Issyk-Kulistan is buying its independence by taking on most of the national debt of Kyrgyzstan. The current Kyrgyz president is a very interesting fellow, lad. A compromise candidate, one who didn’t offend any of the major power brokers—more importantly, before he was shoved into the hot seat, he was a professor of economics.”
He holds up a hand. “Yes, I know what you’re going to say: They don’t want to be independent. Tough. Anyway, I suspect the angle they’re playing in Bishkek is that IRIK has been set up to fail, declare bankruptcy, and Bishkek is expected to ‘send in the army to re-establish order’ or some such bullshit. Meanwhile, they’ve sold—through cut-outs—a ton of credit default swaps hedged against ARIK’s national debt. In the short term, it looks like they’re selling insurance. What everyone is supposed to think is that they’re stupid-greedy, and when the IRIK collapses, the debt bomb will empty the Kyrgyz coffers.”
“But that’s stupid—” You swallow. “They can’t do that! Can they? Isn’t that what made the banks collapse?”
“Well spotted.” The Gnome grins humourlessly. “It’s not the only thing they might be doing, though. IRIK’s credit rating has got to be in the shitter, so betting they’ll collapse is a sucker bet. What I think Kyrgyzstan is doing is, they’re selling CDSs to foreigners who expect IRIK to collapse under the debt. And they’re over-selling, selling multiple CDSs leveraged against the same asset. Meanwhile they’re using the income from the CDSs to reduce the debt load—until they arrange for reunification, which, with 72 per cent in favour, isn’t going to be hard. The idiots who bet on IRIK collapsing will miss out on the fat payout they were expecting: Serves them right. What interests me is why the IMF and the credit-ratings agencies aren’t yelling about it. The Kyrgyz government must have figured out a way to buy off the regulators and oversight agencies. So what’s the angle? There’s one obvious one: inward investment.”
“Inward—who’d want to invest in Issyk-Kulist…” You trail off. The answer stood staring you in the eye a few short hours ago. “Oh.”
“Yes, indeed. Picking the pockets of honest bankers is frowned upon in polite company, but the same people would tend to turn a blind eye to a lawful government’s attempt to sting crime syndicates in the wallet by selling them junk credit default swaps leveraged on a sock-puppet’s debt. Think of it as an anti-money-laundering operation on an epic scale—the cops have laid a trap for the gangs using an entire country as bait. The real problem is avoiding being assassinated afterwards: The RBN and the cartels take a dim view of overly successful confiscatory policies, and they’re bigger than some governments.”
The Gnome drains his glass then waggles it at you. “Will you stay for a refill? I think it’s about time we had a heart-to-heart talk about how to buy and sell derivatives…”
When you finally go back to the house, you fail to work up the nerve to tell Bibi about your house guest. She’s home late from work, tired and silent from too many hours in the pharmacy, and lavishes all her warmth on Naseem and Farida, who’ve been staying round at Mrs. Uni’s house after school. The cone of silence she traps you in is poisonous and chilly; you know from bitter past experience that she will make you wait on the threshold for three days and nights before she relents.
Three days is her usual sentence for drunkenness and foolery: not one minute more and not a second less. She has the measure of a judge and the restraint of a probation officer. You’ve been on the receiving end of this sanction before. Bibi can be a harsh woman, when she wishes to teach you a lesson. And so you take the spare key wordlessly when you leave for work the following morning. Let John Christie—no, Peter Manuel—explain himself to her when he arrives, if he arrives. After all, it might never happen.
You sit behind your desk in a haze of mild dread for a couple of hours, a cup of tea cooling by your hand as you try to distract yourself by chasing naughty pictures on the Internet. But your heart isn’t in it, and in the end you give up and stand, meaning to go in search of water to pour on the endlessly dying rubber plant, when your mobile rings.
Your heart sinks as you recognize Bibi’s face: It’s most unlike her to phone you from work. “Hello? What is it?”
“Anwar? Praise Allah, it’s you! Please, can you go at once and look after my mother? She just called. I think she’s having another of her funny turns—”
Sameena lives with her husband Taleb and Cousin Tariq and assorted grown-up children, their spouses and descendants in a stillslightly-ramshackle town house Ali bought back in the nineties. You weigh Bibi’s plea momentarily. It’s an imposition, and it means closing the office, but on the other hand, it means early release from the cone of silence. “All right, my love. Just for you I’ll close the office early and—”
“Please, Anwar! Just go, right now. You might need to call in help—I can’t leave the shop, but—”
Five minutes later, you’re on your way, heart singing and feet light. Bibi has not only forgiven but, in the urgency of her call, has forgotten to be angry at you.
It doesn’t last. The hairs on the back of your neck begin to rise as you turn the corner on their cobbled side-street on the wrong side of Bruntsfield Place and see two—no, three—police cars sprawled across the parking bays. Coincidence, you tell yourself, and anyway, even if Tariq’s got himself into trouble, you’re here with the best of intentions, to give aid and comfort to his mother, who is doubtless—
Their front door is ajar. As you approach it a fourth police car turns the corner, lights flashing, and double-parks a couple of doors along from you, and as you reach up and ring the doorbell, you hear sobbing from inside, the sound of your mother-in-law losing it wholesale in the kitchen.
The cop who opens the door is instantly suspicious. “Who are you and what are you doing here?” he demands, scanning you with a small forest of cameras. His free hand twitches in the direction of a beltful of handcuffs. “You can’t come in.”
Your shoulders slump. “My wife got a call from my mother-in-law,” you say. “Is she alright? Has there been an accident?”
“What’s your name? What’s your mother-in-law’s name?” He looms over you, overbearing.
“I, uh, I’m Anwar Hussein. My wife’s mother, Sameena Begum, is she alright?” You blink at him, trying not to cringe away. Your stomach is churning again. The rozzer’s eyes twitch behind his head-up shades, fingers twitching on some kind of air keyboard, then his shoulders relax slightly.