media the same day.”
“I read in the paper where the Fed left the interest rates the same.”
Burns pursed his lips and then eyed Sawyer. “That’s right, we didn’t
adjust the interest rates.”
“How exactly do you adjust rates?”
“There are actually two interest rates that are directly affected by the
Fed, Lee. The Federal Funds Rate is the interest rate banks charge
other banks who borrow funds to meet reserve requirements.
If that rate goes up or down, interest rates on bank CDs, T-bills,
mortgages and commercial paper will soon follow. The Fed sets the
target Federal Funds Rate at the FOME meetings. Then the New York
Federal Reserve Bank, through its Domestic Trading Desk, buys or sells
government securities, which in turn restricts or expands the supply of
money available to banks to ensure that that interest rate is
maintained. We call that adding or subtracting liquidity. That’s how
Arthur took the bulls by the horns when he became chairman; by adjusting
the Fed Funds Rate in ways the market didn’t anticipate. The second
interest rate which can be affected by the Fed is the Discount Rate, the
rate charged by the Fed to banks for loans by the Fed. However, the
Discount Rate is tied to loans for what amounts to emergency purposes;
thus, it’s known as the ‘window of last resort.” Banks who frequent that
window too often will come under increased regulatory scrutiny, since
it’s seen as a sign of weakness in banking circles. For that reason,
most banks will borrow money from other banks at the slightly higher
Federal Funds Rate, since there is no stigma attached to that channel of
credit.”
Sawyer decided to change direction. “Okay, had Lieberman been acting
strangely? Anything bothering him? Any threats that you know of?”
Burns shook his head.
“This trip to L.A. that Lieberman was taking, was it a regular thing?”
“Very regular. Arthur was meeting with Charles Tiedman, president of
the San Francisco Federal Reserve Bank. Arthur was very good about
making the rounds of the presidents, and he and Charles were old
friends.”
“Wait a minute. If Tiedman is head of the San Francisco bank, why was
Lieberman flying into L.A.?”
“There is a branch office of the Fed there. Also, Charles and his wife
live in Los Angeles and Arthur would stay with them.”
“But he would’ve just seen Tiedman at the November fifteenth meeting.”
“That’s right. But Arthur’s trip to L.A. was planned well in advance.
It was only a coincidence that it occurred shortly after the FOME
meeting. However, I do know he was anxious to talk to Charles.”
“Do you know what about?”
Burns shook his head. “You’d have to ask Charles.”
“Anything else that might help me?”
Burns considered the question briefly and then shook his head again. “I
can’t think of anything in Arthur’s personal background that would have
led to this abomination.”
Sawyer rose and shook Burns’s hand. “I appreciate the information,
Waiter.”
When Sawyer turned to leave, Burns gripped his shoulder.
“Agent Sawyer, the information we have at the Fed is so enormously
valuable that the slightest slip could reap incredible profits for
undeserving individuals. I guess I’ve become extremely tight-lipped
over the years to prevent just such an occurrence.”
“I understand.”
Burns put a flabby hand on the door as Sawyer buttoned up his coat. “So,
do you have any suspects yet?”
The agent turned back to Burns. “Sorry, Walter, we have secrets at the
FBI too.”
Henry Wharton sat behind his desk, nervously tapping his foot on the
carpeted floor. The managing partner of Tyler, Stone was small in
stature but large in legal ability. Partially bald with a trim gray
mustache, he looked every bit the senior partner in a major law firm.
After thirty-five years of representing the elite of American business,
Wharton was not easily intimidated. However, if anyone came close, it
was the man currently seated across from him.
“So that’s all she told you? That she was unaware her husband was on
the plane at all?” Wharton asked.
Nathan Gamble’s eyes were half closed as he looked down at his hands. He
now looked up at Wharton. The movement made the attorney jerk slightly.