THE TAINTED TRUST (Volume 2 of The King Trilogy)

CHAPTER 20

          New York. Friday, October 16, 1987.

The following day's record plunge of 108.35 points in the Dow Jones industrial average on the New York Exchange, served as a clear warning to investors. Something was terribly wrong. The stock market dive could have been compared to a loud tremor in advance of a violent financial earthquake.

Panic swept financial markets on the following Monday. Stock trading activity was frantic and emotional. The swiftness and magnitude of the decline was staggering. Widespread panic selling steadily gained momentum with each passing hour. The activity tested the technical capacity of the New York Exchange. The ticker was more than one hundred points behind actual trading activity for much of the day. Traders were ordered to remain on the floor of the exchange until transactions were completed.

The capital implosion was far worse than that recorded during the massive stock market crash of 1929 that ushered in the Great Depression. Fortunes were lost in a matter of hours as the New York Stock Exchange suffered a gut-wrenching collapse.

The sudden financial meltdown resurrected fears that the global economy was about to slide into recession. It more than wiped out the gains made on the New York Exchange, the financial heartbeat of the United States, since April 7, 1986. In percentage terms, it was an incredible disaster, almost double the mark of twelve point nine percent, recorded on October 29, 1929.

The Dow Jones industrial average, the most widely watched measure of share values on Wall Street, lost over five hundred points, a precipitous drop of over twenty-two percent. It closed at 1,738.41. By the end of the day, more than six hundred and four million shares had changed hands. The previous record daily volume of three hundred and thirty-eight million shares, achieved the previous Friday, was smashed by midday, as investors liquidated their holdings and fled the market.

The scene at the posh and lavishly decorated offices of Mara, Griesdorf and Visconti was a recreation of an ugly image from October 29, 1929. Wealthy investors clustered around in stunned silence, staring in disbelief at the electronic ticker tape giving the latest bad news from the floor of the New York Exchange, blocks away.

From the moment the market had started its plunge on Friday, Mara's staff had been frantically trying to reach Visconti, or someone who knew where he was, without success. Visconti's partners worried that he was enjoying his holiday, unaware of the unfolding financial nightmare. He alone had the power to deal with and trade the stocks in the fat portfolios he

managed. Without Visconti, all of them were naked to the ravages of the market. They desperately needed attention. With each passing hour his portfolios were losing enormous amounts of money.

Jerry Mara, a tense and excitable individual, took a long and deep drag of his Marlboro while staring at the moving electronic tape with glazed eyes. "Where the hell are you, Louis?" he muttered, deeply worried, not only about the failure of Visconti to liquidate stocks, but also the implications of that failure for the reputation of the partnership.

        The King's trust, by far the largest and most exposed, was poised to take the largest hit. With divine premeditation, and in flagrant violation of Mike King's directive, Visconti had maxed the trust's risk, loading it with numerous highly volatile stocks of small to medium sized companies. Unless he returned to liquidate those investments, the losses and consequent fallout would be horrendous.