The Fear Index

Gabrielle, whose face when he brought it up occupied the entire screen. She looked shattered. He thought: she must have been told the worst of it by now. His finger hovered over the button for a few seconds.
    ‘Gabby …’
    It was strange to watch on screen her reaction to the sound of his voice, the look of relief.
    ‘Thank God, Alex. We’re all so worried about you. How’s it going in there?’
    He glanced around. He wished he had the words to describe it. ‘It’s – unbelievable.’
    ‘Is it, Alex? I bet it is.’ She stopped, glanced to one side then moved her face closer to the camera, and her voice became quieter, confiding, as if it were just the two of them. ‘Listen, I’d like to come and talk to you. I’d like to see it, if I may.’
    ‘I’d like that too. But honestly I don’t think it’s possible.’
    ‘It would just be me. I promise you. All these others would stay back here.’
    ‘You say that, Gabby, but I don’t think they would. I’m afraid there’s been a lot of misunderstanding.’
    She said, ‘Hang on a minute, Alex,’ and then her face disappeared from the screen and all he could see was the side of a police car. He heard a discussion start, but she had put her hand over the entry speaker and the words were too muffled for him to make out. He glanced over at the TV screens. The CNBC headline was ‘DOW DOWN MORE THAN 400 POINTS’.
    Hoffmann said, ‘I’m sorry, Gabby. I’m going to have to go now.’
    She cried, ‘Wait!’
    Leclerc’s face suddenly appeared on camera. ‘Dr Hoffmann, it’s me – Leclerc. Open the gates and let your wife in. You need to talk to her. My men won’t make a move, I promise you.’
    Hoffmann hesitated. It struck him, oddly, that the policeman was right. He did need to talk to her. Or if not talk to her, at least show her – let her see it all before it was destroyed. It would explain everything far better than he ever could.
    On the trading screen there was a new alert: ‘NASDAQ has declared Self Help against NYSE/ARCA as of 14:36:59 ET.’
    He pressed the buzzer to let her in.

18

    The flight crowd is created by a threat. Everyone flees; everyone is drawn along. The danger which threatens is the same for all … People flee together because it is best to flee that way. They feel the same excitement and the energy of some increases the energy of others; people push each other along in the same direction. So long as they flee together they feel that the danger is distributed …

    ELIAS CANETTI, Crowds and Power (1960)

    THE FEAR IN the US markets was going viral, algorithms sniffing and sniping at one another along their fibre-optic tunnels as they struggled to find liquidity. Trading volume in consequence was approaching ten times normal levels: 100 million shares were being bought and sold per minute. But the figure was deceptive. The positions were held for only fractions of a second before being passed on – what the subsequent inquiry called a ‘hot potato’ effect. This abnormal level of activity itself now became a critical factor in the accelerating panic.
    At 8.32 p.m. Geneva time, an algorithm had entered the market tasked with selling 75,000 ‘E-minis’ – electronically traded S&P 500 future contracts – with a notional value of $4.1 billion on behalf of the Ivy Asset Strategy Fund. To limit the impact on price of unloading so much, the algorithm was programmed to restrict its trading so that its volume of sales averaged no more than nine per cent of the total market at any given moment: at that rate the disposal was expected to take from three to four hours. But with the market ten times its normal size, the algorithm adjusted accordingly and proceeded to complete its assignment in nineteen minutes.

    AS SOON AS there was enough of a gap, Gabrielle slid around the gate and set off across the car park. She had not gone far when she heard shouting behind her and turned to see Quarry breaking free of the group and striding after her. Leclerc was yelling at him to come back, but Quarry’s only response was to raise his arm in dismissive acknowledgement and keep on walking.
    ‘Not going to let you do this alone, Gabs,’ he said as he drew level with her. ‘My fault this, not yours. I got him into it.’
    ‘It’s nobody’s bloody fault, Hugo,’ she said without looking at him. ‘He’s ill.’
    ‘Still – you don’t mind if I tag along?’
    She ground her teeth. Tag along – as if they were on a stroll.