The Fear Index

On the screens VIXAL-4 was continuing to trade. Puzzled, he went to the terminal and began flicking between the screens.
    Quarry said quietly to one of the quants, ‘Go back and check, will you?’
    Hoffmann said, ‘I am capable of throwing a goddam switch, Hugo. I’m not so completely crazy I don’t know the difference between on and off. My God – will you look at that?’ In every market VIXAL was continuing to trade: it was shorting the euro, piling into Treasury bonds, adding to its position on VIX futures.
    From the entrance to the computer room the quant shouted, ‘The power’s all shut down!’
    An excited murmur broke out.
    ‘So where is the algorithm if it’s not on our hardware?’ demanded Quarry.
    Hoffmann didn’t answer.
    ‘I think you will find that is something the regulators will also be asking,’ said Rajamani.
    Afterwards no one was sure how long he had been watching them. Someone said he had been in his office all along: they had seen his fingers parting the blinds, staring out as Hoffmann delivered his speech on the trading floor. Someone else claimed to have come across him at a spare terminal in the boardroom with a mass storage device, uploading data. Yet another quant, a fellow Indian, even confessed that Rajamani had approached him in the communal kitchen and asked if he would be willing to act as his informant inside the company. In the somewhat hysterical atmosphere that was about to overtake Hoffmann Investment Technologies, in which heretics and disciples, apostates and martyrs split into their various factions, it was not always easy to establish the truth. The one thing everyone could agree on was that Quarry had made a grievous error in not having the chief risk officer escorted off the premises by security the moment he had been fired; in the chaos of events, he had simply forgotten about him.
    Rajamani stood on the edge of the trading floor holding a small cardboard box containing his personal effects – the photographs of his graduation, his wedding, his children; a tin of Darjeeling tea he kept in the staff refrigerator for his personal use and which no one else was allowed to touch; a cactus plant in the shape of a thumbs-up; and a framed handwritten note from the head of Scotland Yard’s Serious Fraud Office thanking him for his help in prosecuting some tip-of-the-iceberg case that was supposed to herald a new dawn in policing the City but which had been quietly dropped on appeal.
    Quarry said hoarsely, ‘I thought I told you to bugger off.’
    ‘Well I am going right now,’ Rajamani replied, ‘and you’ll be glad to know I have an appointment at the Geneva Finance Ministry tomorrow morning. Let me warn each and every one of you that you will face prosecution, imprisonment and millions of dollars in fines if you conspire in the running of a company that is unfit to trade. This is clearly dangerous technology, completely out of control, and I can promise you, Alex and Hugo, that the SEC and the FSA will revoke your access to every single market in America and London pending an investigation. Shame on you both. Shame on you all.’
    It was a tribute to Rajamani’s self-confidence that he was able to deliver this speech over a tin of tea and a thumbs-up cactus without any loss of dignity. With a final sweeping glare of fury and contempt, he thrust out his chin and walked steadily towards reception. More than one witness was reminded of the pictures of staff leaving Lehman Brothers with their possessions in boxes.
    ‘Yes, go on, clear off,’ Quarry called after him. ‘You’ll find ten billion dollars buys us a heck of a lot of lawyers. And we’re going to come after you personally for breach of contract. And we’re going to bloody well bury you!’
    ‘Wait!’ shouted Hoffmann.
    Quarry said, ‘Leave him, Alex – don’t give him the satisfaction.’
    ‘But he’s right, Hugo. There’s a lot of danger here. If VIXAL’s somehow migrated out of our control, that could pose a real systemic risk. We’ve got to keep him on side until we can figure it out.’
    He set off after Rajamani, ignoring Quarry’s protests, but the Indian had quickened his pace. He just missed him in reception. He caught up with him by the elevators. The corridor was deserted. ‘Gana!’ he called. ‘Please. Let’s talk.’
    ‘I’ve nothing to say to you, Alex.’ He was clutching his box. His back was to the elevator control panel. He hit the call button with his elbow.