Five minutes later, having made a cup of strong, black coffee and picked a couple of home-baked cookies from a large glass jar, Zorn was back at his personal workstation. Racked in front of him were eight flat-panel screens, arranged in two rows of four. They showed a constant stream of real-time market data and global TV and internet news coverage. A yellow legal pad lay on his desk, next to an old Harvard University coffee cup filled with freshly sharpened HH pencils. Zorn picked up a Bluetooth telephone earpiece and put it on. He looked at the only other item on his desk: a twenty-year-old picture of his parents. ‘This one’s for you,’ he murmured, and punched a speed-dial number.

When the call was answered there were no hellos or small talk, just a simple instruction. ‘I want to make a short call on Lehman’s,’ Zorn said. ‘Start with a hundred in three-month options. Be ready to write a lot more.’

‘You sure, Mal?’ asked the voice on the other end of the line, with the carefully modulated tone of surprise that a broker reserves for a client about to embark on an insane course of action. ‘Lehman’s is trading at almost eighty, and it’s only moving up. You’ve got a hundred million dollars says it’s gonna go the other way?’

‘Yes.’

‘OK. Well, it’s your money and you’ve always been right before, but…’

‘But nothing. Write the calls. And something else: what’s the premium on Lehman’s credit default swaps at the moment?’

‘Less than a basis point, couple tenths, maybe… but why do you want to know? You wanna bet that a one-hundred-and-fifty-year-old bank

…’

‘Hundred-and-fifty-seven-year-old, to be precise.’

‘Whatever… you’re saying that this great institution, the fourth biggest bank on the Street, is about to collapse?’

‘That’s right. At some point over the next year or two, that’s exactly what I’m saying. Buy ten billion bucks of Lehman’s CDSs. If people want to sell you more, buy it. Don’t stop.’