The Fear Index

Quarry at least seemed to be treating the suggestion seriously.
    ‘I don’t know. I’m not sure I am saying that. We need to take this one step at a time until we have enough information to make a full assessment. But I think as a first move we have to unwind the positions it’s taken in the market. This could be quite hazardous – and not just to us.’
    ‘Even though it’s making money?’
    ‘It’s not a question of making money any more – can’t you forget about money just for once?’ It was becoming increasingly hard for Hoffmann to maintain his composure, but he managed to finish quietly, ‘We’re way beyond that now.’
    Quarry folded his arms and thought it over, staring at the tiled floor. ‘Are you sure you’re in a fit state to be taking this kind of decision?’
    ‘I am, really. Trust me, please, will you, if only for the sake of the last eight years? It’ll be the last time, I promise you. After tonight, you’ll be in charge.’
    For a long moment they looked at one another, the physicist and the financier. Quarry frankly didn’t know what to make of it. But as he said afterwards, in the end the company was Hoffmann’s – it was his genius that had brought in the punters, his machine that had made the money in the first place, his call to shut it down. ‘It’s your baby,’ he said. He stood clear of the door.
    Hoffmann went out on to the trading floor with Quarry at his heels. It felt better to be doing something, fighting back. He clapped his hands. ‘Listen up, everybody!’ He climbed on to a chair so the quants could see him better. He clapped again. ‘I need you all just to gather round for a minute.’
    They rose from behind their screens at his command, a ghost army of PhDs. He could see their exchange of glances as they came over; some were whispering. They were obviously all on edge with what was happening. Van der Zyl came out of his office, and so did Ju-Long; he couldn’t see Rajamani. He waited for a couple of stragglers from Incubation to thread their way around the desks and then he cleared his throat.
    ‘Okay, we’ve obviously got a few anomalies to deal with here – to put it mildly – and I think for safety’s sake we’re going to have to start dismantling these positions we’ve built up over the last few hours.’
    He checked himself. He didn’t want to create a panic. He was also conscious of the smoke detectors dotted across the ceiling. Presumably everything he said was being monitored. ‘This doesn’t mean we have a problem with VIXAL necessarily, but we do need to go back and find out why it’s been doing some of the things it has been doing. I don’t know how long that’s going to take, so in the meantime we need to get that delta back in line – hedge it out with longs in other markets; even liquidate if it comes to it. Just get the hell out of where we are.’
    Quarry said, to Hoffmann and the room, ‘We’ll need to tread very carefully. If we start liquidating positions this size too quickly, we’ll move prices.’
    Hoffmann nodded. ‘That’s true, but VIXAL will help us achieve the optimums, even in override.’ He looked up at the row of digital clocks beneath the giant TV screens. ‘We’ve still got just over three hours before America closes. Imre, will you and Dieter help out with fixed income and currencies? Franco and Jon, take three or four guys each and divide up stocks and sector bets. Kolya, you do the same with the indices. Everyone else in their normal sections.’
    ‘If you encounter any problems,’ said Quarry, ‘Alex and I will be here to help out. And can I just say: don’t anyone think for a second that this is a retreat. We took in an additional two billion in fresh investment today – so this shop is still growing, okay? Is that clear? We’ll recalibrate over the next twenty-four hours and move on to even bigger and better things. Any questions?’ Someone raised their hand. ‘Yep?’
    ‘Is it true you just fired Gana Rajamani?’
    Hoffmann glanced at Quarry in surprise. He’d thought he was going to wait until the crisis had passed.
    Quarry didn’t miss a beat. ‘Gana has been wanting to rejoin his family in London for some weeks.’ A general exclamation of surprise arose from the meeting. Quarry held up his hand. ‘I can assure you he’s completely on side with everything we’re doing. Now does anybody else want to ruin their career by asking me a tricky question?’ There was nervous