The Fear Index

food and household goods, all the others – these are just right across the board. They are not at all sector-specific.’
    ‘Then there is the short on the S and P,’ said Ju-Long, ‘and the out-of-the-money puts …’
    ‘And the Fear Index,’ added van der Zyl. ‘You know, a billion dollars of options on the Fear Index – my God!’
    It certainly was a hell of a lot, thought Quarry. He came to a halt. In fact, it was more than a hell of a lot. Until that moment, in the general welter of data that had been thrown around, he had rather missed the significance of the size of that position. He stepped across to a vacant terminal, bent over the keyboard and quickly called up a chart of the VIX. Ju-Long and van der Zyl joined him. The graphic showed a gentle wave pattern in the value of the volatility index as it had fluctuated over the past two trading days, the line rising and falling inside a narrow range. However within the last ninety minutes it had definitely started trending upwards: from a base of around twenty-four points at the US opening, it had now climbed to almost twenty-seven. It was too early to say whether this marked a significant escalation in the level of fear in the market itself. Nevertheless, even if it didn’t, on a billion-dollar punt, they were looking at almost a hundred million in profit right there. Once again Quarry felt a cold tremble run down his back.
    He pressed a switch and picked up the live audio feed from the pit of the S&P 500 in Chicago. It was a service they subscribed to. It gave them an immediate feel for the market you couldn’t always get from just the figures. ‘Guys,’ an American voice was saying, ‘the only buyer I have on my sheet here, guys, from about nine twenty-six on, is a Goldman buyer at fifty-one even two hundred and fifty times. Other than that, guys, every entry I have has been sell-side activity, guys. Merrill Lynch I had big-time seller. Pru Bache I had big-time seller, guys, all the way from fifty-nine to fifty-three. And then we saw Swiss Bank and Smith coming in big-time sellers—’
    Quarry switched it off. He said, ‘LJ, why don’t you make a start on liquidating that two-point-five billion in T-bills, just in case we need to show some collateral tomorrow?’
    ‘Sure, Hugo.’ His eyes met Quarry’s. He had seen the significance of the movement in the VIX; so had van der Zyl.
    ‘We should try to talk to one another at least every half hour,’ said Quarry.
    ‘And Alex?’ said Ju-Long. ‘He ought to see this. He would be able to make some sense of it.’
    ‘I know Alex. He’ll be back, don’t you worry.’
    The three men went their separate ways – like conspirators, thought Quarry.

14

    Only the paranoid survive .

    ANDREW S. GROVE, PRESIDENT AND CEO OF INTEL CORPORATION

    HOFFMANN HAD MANAGED to hail a taxi on the Rue de Lausanne, one block away from the Hotel Diodati. Afterwards the taxi driver remembered the fare distinctly for three reasons. First because he was driving towards the Avenue de France at the time and Hoffmann needed to go in the opposite direction – he asked to be taken to an address in the suburb of Vernier, close to a local park – which meant he had to perform an illegal U-turn across several lanes of traffic. And second because Hoffmann had seemed so edgy and preoccupied. When they passed a police car heading in the opposite direction, he had sunk low in his seat and put up his hand to shield his eyes. The driver had watched him in the mirror. He was clutching a laptop. His phone rang once but he didn’t answer it; afterwards he turned it off.
    A sharp breeze was stiffening the flags above the official buildings; the temperature was barely half what the guidebooks promised for the time of year. It felt as if rain was coming. People had deserted the pavements and taken to their cars, thickening the mid-afternoon traffic. Consequently it was after four when the taxi finally approached the centre of Vernier, and Hoffmann abruptly leaned forward and said, ‘Let me out here.’ He handed over a one-hundred-franc note and walked away without waiting for the change: that was the third reason the driver remembered him.
    Vernier stands on hilly ground above the right bank of the Rhône. A generation ago it was a separate village, before the city spread across the river to claim it. Now the modern apartment blocks are close enough to the airport for their occupants to be able to read the names on the sides of