As the aftermath of the spacecraft’s first pass became apparent, civil protection authorities began issuing guidance to the public that read like instructions for imminent air raids: stay indoors and away from windows or seek shelter immediately during the object’s pass; keep a well-stocked and up-to-date first aid kit at home, flashlights, a radio, and extra batteries; procure provisions for three days; avoid looking up at the sky; and so on. People flocked to places of worship in fear and despair. End-times preachers took to the streets, shouting “the end is nigh” and calling on people to repent, while hundreds of thousands of others hit the highways to flee major cities in the corridor forecast for the next day’s pass, causing huge traffic jams and hours-long delays.

As people fled, so did money. The market crash conga was led by the stock exchanges of the Middle East, which had the misfortune of being open on a Sunday – Abu Dhabi, Dubai, Kuwait, Tadawul,¹ Qatar, Tel Aviv all halted trading less than an hour after opening. With most stock exchanges closed, the bazaars and private desks in Istanbul, Mumbai, and Zurich became the weekend’s true measure of the fear that gripped the entire world: dealers quoted gold at twenty, then thirty percent over Friday’s fix – and then refused to give any quote. In Russia, whose economy was already in a parlous state, the unofficial ruble-to-dollar exchange rate at the obmenniki – the street exchange booths – had skyrocketed. As the day went by, fear that the object would eventually crash on Russian soil drove the rate higher and higher, until the booths, one by one, ceased selling dollars altogether, sealing the ruble’s retail death.

People seeking safety away from places in C/1998 M7’s projected path were met with another setback: there were no more commercial flights from anywhere to anywhere. The day before, the airspace of the North Atlantic had been emptied due to the object’s pass, but this time it was because the aviation war-risk underwriters called and faxed the airlines to inform them they were withdrawing coverage. At Lloyd’s, executives, lawyers, and underwriters were faced with a taxonomy problem: marine and aviation policies excluded war perils and covered or excluded acts of God, depending on the line. But how was C/1998 M7 supposed to be treated? If it was a natural object, could risk to property and life posed by it be classified as an act of God? And if it was indeed an alien spacecraft, could a ghost ship like this fall under the clause that excluded damage caused by “any hostile act by or against a belligerent power”? Officially, no one knew if it was a spacecraft or not, much less a warship. And even if it was a spacecraft built for war, the war perils clause required a belligerent. Could a derelict be viewed as being engaged in war against the Earth as a whole or any of its states? The insurance industry raced to resolve this conundrum – but lacking an answer, they couldn’t and wouldn’t insure any flight.

Even though the markets were still closed, fax machines and answering services choked on mountains of “at the open, at any price” sell orders from panicked investors, setting up Monday for a brutal opening. Brokers were flooded with frantic calls from their oldest and largest clients, the ones they were on a first-name basis with. On any other weekend, they could have talked them out. Not this time, though, no matter what they said – and they knew it. The agonizing wait for the opening and the object’s next pass did nothing to calm the investor class down.

This climate wasn’t lost on G7 deputies and central bank leaderships. The atmosphere in the G7 deputies’ teleconference couldn’t have been heavier. Even before they connected to the teleconference, they knew their tools weren’t made for situations like this. They were equipped to handle markets afraid of each other – bank runs, currency attacks, liquidity freezes. And the cure was always the same: to convince the markets that money would be there. So, they deployed the one tool they had at their disposal: they pledged “unlimited” liquidity and reactivated or expanded foreign exchange swap lines among them.

But what they couldn’t fight was the investors’ fear. Everyone knew it, and most deputies believed that keeping a stiff upper lip and a confident posture, with the added promise of a coordinated approach, would reassure them. The French deputy suggested a worldwide closure of stock exchanges on Monday, as was done in response to the financial crisis of 1914.² The French proposal was fiercely debated for more than an hour, but was ultimately rejected. Doing so would be construed as an admission that the world was ending. The markets had to stay open at all costs; it was a matter of optics and fragile trust. They agreed to leave it up to national authorities to pull the switches as necessary.

Likewise, they discussed the option of a coordinated currency intervention – jointly buying a vulnerable currency – at great length and deferred it. It was, they agreed, more or less grudgingly, “too soon.” Firing such a big gun on Sunday, with Monday’s outcome still unknown, would be premature. But the one currency that needed this boost most of all, the ruble, was the one everyone privately agreed was beyond saving. Eventually, they settled for a declaration of preparedness “to act as warranted.” They understood very well that the country that would be hit by the object would need lots of reconstruction money and that it wouldn’t be provided by the markets.

* * *

If the G7 were navigating uncharted territory, central banks were in an even more dire position. The Bank of Japan was merely four months into its independence and this crisis was its maiden voyage. The first thing it did was to flood yen liquidity, even if it seemed like a bottomless barrel – with Japan on the corridor map, the yen was undergoing an unprecedented selloff and the BoJ didn’t want it to follow the ruble’s footsteps.

The European Central Bank was a mere two months old and, worse, had very little to do; with the euro scheduled to launch on the first day of 1999, it could conduct no monetary policy, so all its president could do was coordinate the German central bank – the Bundesbank – and its counterparts across the Union. Halfway into the teleconference, the governor of the Bank of Greece wondered aloud what ought to have been unthinkable: “will there be a euro for us to join at all?” His country had just been shut out of the first wave of euro adopters for failing to meet the criteria of the 1992 Maastricht Treaty³ and he was there as a mere observer. He tried to suppress a smirk at the thought the treaty’s strict fiscal clauses could be rendered obsolete or even disastrous for the Union itself. His counterparts from Italy, Portugal, and Spain nodded in fearful agreement. The Italian governor mentioned what the G7 understood about the fiscal impact of the object’s crash and explicitly questioned the wisdom of the “no bailouts” clause of the treaty. This drew the wrath of his German colleague, who accused both him and the Greek of using this dire situation to blackmail fiscally disciplined nations into rescuing chronically irresponsible ones that always devalued their way out of every hard choice.

As if on cue, he was joined by his counterparts from Finland, the Netherlands, and Austria. The bankers of the Mediterranean countries and Ireland pushed back against the accusations. Belgium, France, and Luxembourg tried in vain to calm the participants down as the meeting devolved into a shouting match. The ECB’s president tried his hardest to prevent the meeting from falling apart. The Mediterranean bankers threatened to disconnect, angrily warning of diplomatic escalation over the use of national stereotyping and the prioritization of rigid policies that weren’t appropriate for the situation they were facing.

Eventually, he had to interrupt and call the “fiscally responsible” nations’ bankers for an unusually stern talking-to before they could resume. After this short break, the ECB boss tried to reconcile the two factions.

The Mediterranean side reiterated their position that any state affected by C/1998 M7 would not only need assistance from the Union in terms of rescue, evacuation, healthcare for survivors, but was also exposed to the risk of needing financial stabilization. In a state of widespread panic, the Italian governor argued, the markets would sell off like there was no tomorrow, not prop up afflicted economies. This would have devastating financial, political, and social consequences the Union couldn’t afford. He implored his German counterpart to look at previous fear-driven crises, telling him that, if Europeans saw the Union refusing to be there for them when they needed it, the whole project would die. “You can’t afford to lose the trust of the citizens, Helmut,” he concluded.

The German, however, wouldn’t budge. “If we intervene and start bailing countries out,” he responded coldly, “we’ll forever lose the trust of the markets.”
“Here we go again,” sighed the French banker. “Helmut, do you seriously believe markets will trust us if they see us act like everything’s normal while the world burns? Frank? Mika? Dieter?” he added, calling his Dutch, Finnish, and Austrian colleagues by name.
“The markets will act rationally,” the Austrian said.
“Like they did in 1907,⁴ 1929,⁵ and 1987?⁶” the Frenchman responded dryly.

The Austrian, the Dutchman, and the Finn lowered their heads. He was right; investors, being human, weren’t immune to irrational decision-making driven by anxiety or fear.

“What do you think we should do, Antoine?” the Dutchman asked.
“What the G7 does every time this sort of thing happens, of course: buy currency. And national central banks can provide liquidity. It’s not like we’re reinventing the wheel.”
“I’m not going to stand for that,” the German said. “I’m sorry, but you’ll have to count me out of this.”
“Your own government signed the liquidity pledge two hours ago,” protested the Spaniard.
“The Bundesbank does not take instructions from Bonn,” the German replied with a steely look on his face.

This went on for one more hour, with the Mediterranean countries’ central bankers pushing for flexibility in view of the unprecedented situation at hand. They clearly stated they considered the French proposal, which was standard G7 practice, to be a conservative middle ground that could allow for greater ambition if necessary. But such ideas were red lines for the German; he didn’t want the text to imply the creation of new funding mechanisms or any new financial burden. The longer the discussion dragged on, though, the weaker his support from Austria, Finland, and the Netherlands became.

The ECB’s president presented a draft statement, which said that the ECB would (“shall”) coordinate the EU’s national central banks in “whatever action” was needed to support and stabilize afflicted member states. The Bundesbank’s boss suggested changing the “shall coordinate” wording to “may coordinate” and adding the phrase “within existing frameworks and mechanisms, on a strictly voluntary and non-binding basis, and without requiring additional funding,” but his proposals to soften the text this way found no support. Eventually, to avoid an impasse due to his intransigence, they had to opt for consensus minus one rather than unanimity and the statement was agreed upon by everyone except him. Audibly frustrated, he said the Bundesbank would issue a statement with the reasons it could not support the ECB’s position.

“Except the Lacedaemonians,⁷” the Greek banker texted the Italian as he heard the ECB’s president read the statement.
“Indeed,” answered the Italian.

* * *

That night, no stockbroker around the world managed to get any sleep. The grim exchanges with their colleagues, the “sell” orders piling under their fax machines and filling tape upon tape of their answering machines, the frantic calls from their clients all spelled the same omen: Monday’s opening was going to be a bloodbath. From London to New York, from Tokyo to Riyadh, all seasoned market experts and analysts scoffed at the G7 communiqué: from “so many words to say nothing at all” to “once again, the rich countries get open swap lines and the poor are left with vague and empty words,” and these were the kinder assessments.

“There was one thing they should have done and the idiots didn’t do it,” said an angry middle-aged senior broker of a middling investment firm in Toronto to a young, ambitious analyst while chopping cocaine into a fine powder on the surface of a glass-topped coffee table.

He’d been in the office since Saturday afternoon, waiting for his clients’ anxious calls, hoping he could calm them down, but all the words at his command proved useless. His grey hair was oily and disheveled; his eyes bloodshot with sleeplessness and whisky.

“What’s that?” asked the analyst.
“Close the fucking markets, for fuck’s sake!” he shouted, now scraping the white powder into pencil-thin lines.
“But wouldn’t everyone panic if they did?”
“What the fuck does it matter?” he responded dryly and, taking the keys of his Mercedes-Benz out of his pocket, tossed them on the table. “Here! I bet you my Merc they’ll close the exchanges within an hour of the opening bell.” The analyst dithered for a moment. His competitive side was tempted, but he knew history and decided not to respond. The broker took a slim platinum tube from the table, bent low and, plugging his left nostril with his thumb, inhaled one line of the white powder sharply through his right nostril, and threw his head back.

It was at this moment that Globex,⁸ Chicago’s electronic session, came to life. S&P futures⁹ fell to their limit in a matter of minutes and were pinned there by rule. On their screens, the two men saw thousands of offers for everything and bids for nothing. Even before opening, the verdict for the entire week was in.

“I’m glad I didn’t take you up on that bet,” said the young analyst and lit a cigarette as he watched the screens in horror.
“Told ya,” said the veteran broker, smirking.

The first major market to open was Tokyo. Mere minutes after opening, Nikkei sank like a stone. In less than an hour, it had gone as low as the limits allowed, with most of the board locked limit-down and untraded; prices posted, sellers queued, but no buyers in sight. The BoJ flooded the system with yen once again, but no one wanted it. With Japan firmly in the corridor forecasts, its currency found no haven bid. Hong Kong, Singapore, and Seoul followed suit, and so did all Asian stock exchanges.

Europe’s turn came, and so did C/1998 M7. At 6:55 AM GMT, it passed over the Canadian Shield and the morning news showed the fireball cross the sky live. The object’s cyan-white plasma sheath crawled over Hudson Bay as the first prices of the day were displayed on the boards in London and Frankfurt. The bourses opened down ten percent on the futures alone, and as the pass footage rolled, they hit fifteen. Amidst the panic, throngs of brokers and investors sought refuge in gold, driving it up by twenty percent. US Treasuries were massively bid.

So was, surprisingly, the Swedish krona: a small, cyclical currency that sold off in every global panic before this one. In an ironic twist of fate, though, Sweden’s location turned it into one of the few safe havens, as explained in a laconic advisory fax sent by Éimhear O’Toole, a theretofore rather unknown analyst. She observed that no place on Earth above 52° N¹⁰ could lie beneath C/1998 M7’s track. In closing remarks that would be quoted for years, she wrote, “the last risk-free rate on Earth is quoted in Stockholm.”

* * *

Oil told its own story – twice. War instinct caused it to spike sharply at the open. And then, it slid more and more by the hour, as demand had disappeared – the entire airline industry had been grounded by their insurers and ships were holding in port. And most people around the world either cowered indoors or, attempting to flee to places they thought safer, ended up trapped in traffic jams that looked like glacially slow rivers of colorful metal, many tens of kilometers long.

Beneath the surface of the equity carnage raged a quiet storm, far more frightening than what was easily visible on TV screens: the interbank spreads widened by the minute; commercial paper remained unbought and banks declined to lend to each other overnight. On screens few laymen ever saw, analysts watched trust, the actual load-bearing element of the system, evaporate, further compounding the panic felt by finance ministers and central bankers worldwide.¹¹ In the middle of all this, the world of finance counted another casualty: a famous hedge fund based in Montreal, established and staffed by some of the brightest academics and traders of the day, found out the hard way that history had ceased to be the operative dataset,¹² leaving it out in the cold.

New York’s opening was very short-lived. Already before the bell, the futures were locked at limit-down and the cash market fell into the gap. Just twenty minutes after opening, the ten-percent circuit breaker fired, halting trading for an hour, as the new rules that were adopted that spring¹³ dictated. When it reopened, the decline continued unabated. The twenty-percent threshold was crossed just shy of an hour later, triggering a second automatic trading halt – this time for two hours. Devastation swept through the third and final threshold, and by three in the afternoon, the rules had forced the largest market in the world to go dark. Asia would inherit the wreckage at its Tuesday open.

Meanwhile, Russia was imploding. The obmenniki had stopped quoting altogether – on the retail market, the ruble was dead and buried. The GKO auctions failed outright, with the finance ministry vainly bidding at its own sales.¹⁴ At the same time, the government in Moscow was struggling to avoid announcing a default that had already come while scrambling to organize evacuations of projected crash sites. But, with capital gone, Russia was running on fumes and C/1998 M7’s consecutive passes only brought the moment of impact closer.

The fearful day ended with a sunset that those who witnessed it described as the most beautiful they’d ever seen. In the skies of western Europe and the eastern Atlantic, the twilight wouldn’t fade. Long after the time the sky should have gone dark, the lingering amber afterglow deepened to a shade resembling embers and then blood. For twenty, then thirty minutes, it hung over the horizon, as if the day refused to end. A band of pale, silvery haze no one remembered seeing before lay high above the sunset, and the sinking sun was surrounded by a vast, faint halo of brownish purple. Far to the north, in lands where summer nights never grow entirely dark, thin wisps of cloud at altitudes where no cloud belongs glowed an unnatural electric blue.

For those who knew what C/1998 M7 was, there was no mystery. In the Atlantic pass, tons of hull metal were ablated into the upper atmosphere, fifty to eighty kilometers high. The winds sheared it out along the parallels within a day and, condensed to a fine dust, it was still catching sunlight hours after the ground below had turned away from the sun. The science pages explained this extraordinary gamut of colors correctly and attributed it to “material that had ablated from the object,” but stopped short of uttering the forbidden nouns: “spacecraft” and “hull”.

In half of Europe, the people who’d spent the day stuck in evacuation traffic or sheltering inside now poured outside to see and photograph the magnificent twilight. Few knew or suspected it was in fact made from vaporized starship.

---

1. The Saudi Stock Exchange in Riyadh, Saudi Arabia. ↩︎
2. A financial crisis that resulted from the selloff of about $3 billion (equivalent to approximately $100 billion in today’s – 2026 – terms) by the British who needed funds for their war efforts during the July Crisis at the start of World War I. In response, the world’s major stock exchanges, including London and New York, closed for months. ↩︎
3. The foundation treaty of the European Union, which set the criteria for the single currency. ↩︎
4. The Panic of 1907, often referred to as the “Bankers’ Panic,” was a severe U.S. economic recession triggered by a failed stock speculation scheme in the copper market. ↩︎
5. The Wall Street Crash of 1929. ↩︎
6. The Black Monday Crash of 1987. On October 19, 1987, the Dow Jones plummeted by 22.6% in a single day, due to a sudden panic severely exacerbated by new, computerized trading and portfolio insurance strategies, which caused a cascading wave of automated sell orders. ↩︎
7. After his victory at the Battle of the Granicus in 334 BCE, Alexander the Great sent 300 suits of Persian armor to the Temple of Athena in Athens with the inscription: “Alexander, son of Philip, and the Hellenes, except the Lacedaemonians, from the barbarians inhabiting Asia.” Sparta (Lacedaemon) refused to join the League of Corinth and declined to participate in the panhellenic campaign led by Macedon. Thus, this inscription served as both a political statement of united Greek leadership under Alexander and a deliberate snub toward Sparta’s stubborn independence. ↩︎
8. The electronic trading platform of the Chicago Mercantile Exchange, which was launched in 1992 and allowed futures trading outside floor hours. Its Sunday evening session made it the first formal market to price each new week. ↩︎
9. Futures contracts (official legal agreements to buy or sell an asset at a set price on a future date) tracking the Standard & Poor’s 500, the leading index of large American companies, traded on the Chicago Mercantile Exchange. ↩︎
10. C/1998 M7’s orbit was inclined at 52° to the equator, meaning its ground track, and thus any possible crash corridor, could never reach latitudes above 52° North or below 52° South. ↩︎
11. The TED spread, i.e. the gap between interbank lending rates and US Treasury yields, is a classic measure of banks’ trust in one another. Its explosive widening signals fear of counterparty collapse. ↩︎
12. A fictionalization of the real-life Long-Term Capital Management, a hedge fund based in Greenwich, Connecticut. Staffed by celebrated academics and traders, its highly leveraged “convergence” strategies assumed that historical price relationships would reassert themselves. In the real timeline, it collapsed in September 1998 after Russia’s default. ↩︎
13. In April 1998, the New York Stock Exchange adopted revised “circuit breaker” rules (NYSE Rule 80B) with three thresholds of decline in the Dow Jones Industrial Average (10%, 20%, and 30%) and responses depending on when these thresholds are crossed during the trading day. ↩︎
14. GKO (Gosudarstvennoye Kratkosrochnoye Obyazatel’stvo): a short-term ruble-denominated Russian treasury bill, the instrument at the heart of Russia’s 1998 debt crisis. ↩︎