The Hilltop

by Assaf Gavron

  They were both smart enough to understand the divide between them. Roni noticed at the time that Idan wasn’t in any hurry to help him get into Goldman Sachs. Idan didn’t recruit Roni into his company, but tried to look out for him, to warn him not to stray off course. In all likelihood, Lowenhof had heard of Roni’s success. And from his knowledge of Pilpeli and Goldstein-Lieberman-Weiss, he must have figured out things weren’t entirely kosher. So, after inquiring into his well-being, Idan said, “Let’s go get a drink.” Roni couldn’t get out of it.

  “Listen, Roni,” Idan began, as if he had prepared a speech. “I’ve thought highly of you ever since I showed up at your bar in Tel Aviv. I saw what you did there and recognized the potential. I knew you’d be successful here, too.”

  “What’s this, a pep talk?” Roni tried to joke, but he knew where it was going, and knew he had no choice but to sit and listen. He scratched at the label of the Mexican beer.

  “I feel responsible for you, in a way . . . ,” Idan said.

  “You’re not. I’m a grown man. I’m responsible for the things I do.”

  Idan ignored the remark. “I know the temptation is huge. The connections and information. That you see all these insane sums of money and you know you can simply reach out and grab them.”

  Roni looked at him. “What do you want, Idan?”

  “I know you’re not a criminal,” Idan continued, gazing into Roni’s eyes. “I know those people. They aren’t people who were raised badly, who have no choice but to be criminals. It’s merely greed. There are two principal behavioral patterns that make people operate within the law, a sense of right and wrong, or the fear of being caught, going to jail, losing a lot of money. I’m telling you this because it’s easy to forget this stuff in this line of work, and because I care about you. I’ve seen people trip up. It’s not pleasant. I don’t know what you’ve done or haven’t done. But I’m not stupid. Whatever you’ve done, you did well. But stop here. And be careful. I know you trade for many Israelis, and some aren’t exactly the nicest people. If they fall on the ground because of you, you’ll be in trouble.”

  By this time in his career, Roni was trading almost exclusively in options. With the options, he bought or sold the right to purchase a share at a designated price by a predetermined date. The options were cheap—hundreds of thousands of dollars—but the opportunities and the risks inherent in option trades are exponentially greater than trading in the share itself. A slight fluctuation in the value of the share could have a significant impact on the value of an option. A deal that costs ten thousand dollars can yield a profit of hundreds of thousands but can also run into a huge loss. An option is a gamble that’s been raised to the power of itself: Juj once said to Roni that if trading on the stock market is roulette, trading in options is Russian roulette.

  To counter such risks, the investment bank had several safeguards. One was the requirement that they maintain a special account, a margin account, with sufficient money to cover the risks. A debt could swell to terrifying proportions and have to be paid immediately, so the bank didn’t permit going into the red. A second safeguard was the company’s risk-management department, whose job it was to control and oversee transactions to prevent mishaps—to stop a trader from buying a large amount of options of the same kind without spreading the risks. Roni made an effort to get to know the department’s personnel at Goldstein-Lieberman-Weiss.

  He continued to make moves and yield profits. His network of ties at that stage was extensive enough to snare interesting snippets of information and translate them into cash almost every week. It was safe, because his informers were also invested in the fund. Everyone shared the same interests. But there were scary moments. There were fluctuations that momentarily carried him to the edge of debt. At those moments, Idan Lowenhof’s words flashed through his mind. As the market turned more and more insane, people were being fired en masse, and the pressure he was under to turn a profit became overwhelming.

  The story with the options of RIM, the company that manufactured BlackBerry devices, began at the Sunday pickup basketball game with some Israelis on the Upper West Side. He still went there whenever possible, to stay in shape and sweat a little, and also because he liked most of the guys.

  A chance remark by one of them at the end of the game initiated the ballistic path that would end in Roni’s crash: “Fuck this motherfucking iPhone, what a piece of shit.”

  “Is it new? You don’t like it?” Roni asked as he browsed through the e-mails on his BlackBerry.

  “Yeah, I got it a week ago. The Internet connection is a joke, never works. And look at this.” He held out the device to Roni and turned it over. Pink stains had appeared on the smooth white plastic backing. Roni took hold of the device and frowned. “What’s this, is it blushing?” He smiled.

  “Can you feel how hot it is? I’ve read a bunch of complaints on the Internet. They said they’d exchange it for me at the Apple store.” He looked at the device in Roni’s hand. “Fuck it, I don’t understand why I gave up my BlackBerry. This iPhone is nothing but noise and ringtones.”

  Roni didn’t give it much thought when he got a call the following day from his Bosnian friend from school, Sasha. Sasha was working now at a large consulting company in San Francisco. He was in New York for a few hours en route to Bosnia for a visit—his grandfather had died—and asked Roni if he had time for a quick lunch, for old times’ sake.

  “You’ve gotten fat!” Sasha said on seeing Roni. They ate at Mister Mei, an Asian bistro they’d enjoyed back in their school days. “You’re not doing any sports?”

  “I played basketball yesterday.” Roni examined his increasingly round stomach. Spending hours in front of monitors year after year was not a recipe for a healthy, slim body. Many of his colleagues went to the gym a few times a week after trading hours, but he couldn’t be bothered. “What’s happening in San Francisco?” he said, changing the subject.

  Sasha was working too hard. “My grandfather was always good to me,” he joked, “and now he died at precisely the right time.”

  Sasha’s team worked with a company from San Jose, a manufacturer of microchips for digital cameras. They did business with some of the leading camera manufacturers in Korea and Japan. The company had hired Sasha’s consulting firm to streamline procedures between the manufacturing plants in China, the development center in San Jose, and clients in Japan, Korea, and the United States.

  “You can’t imagine just how boring the work is, and hard. No one wants to help us help them improve the way they operate.”

  “What about the U.S.?” Roni wondered. “Aren’t there manufacturers of digital cameras in the United States?”

  “There’s Kodak,” Sasha replied, “and now Apple has brought out the iPhone, with their camera. Turns out the chip heats the devices more than they expected, and everybody’s complaining, and that’s why the guys there are freaking out and have zero time for us.”

  Roni froze in the middle of shoving a forkful of General Tso’s chicken into his mouth and looked at Sasha wide-eyed. He recalled the weird color on the basketball friend’s device from the previous evening.

  “What happened, did you choke?” Sasha asked.

  “No, no,” Roni waved his hand, “go on. So, the thin telephones aren’t coping with the cameras?”

  “Don’t know. All these devices that are trying to be everything, maybe it won’t work. A strong communications device with telephone, e-mail, SMS”—he picked up his BlackBerry and gestured toward Roni’s—“I don’t believe there’ll ever be a real substitute for it, as long as it works as well as these. Steve Jobs hasn’t always been right, you know.”

  When Roni got to work, he set one of the monitors to keep track of the Apple and RIM stocks. Apple had remained pretty fixed, but the fluctuations of RIM were interesting. From late June to mid-July it lost some 20 percent of its value, but then regained the same over a similar period of time. From late August to September, it fell sharply agai
n. He read a commentary in BusinessWeek that concluded that “the iPhone will never be a threat to the BlackBerry,” and articles about intrinsic faults with the iPhone—MarketWatch dubbed the device “a ridiculous idea.”

  Roni messaged Meir Foriner on the chat screen, in Hebrew: “The Maccabi game?” The Maccabi game was code for a landline-to-landline call from home at nine in the evening.

  Foriner replied: “With the grace of God.”

  Roni called him that evening and spoke to him about his ideas. Foriner came back the following day with information he’d managed to gather at his credit-rating company. The sales figures for the new iPhone in the first three weeks were indeed a little disappointing. The BlackBerry remained strong, encouraging reports and favorable reviews had been published about new devices released in response to the iPhone. Google, too, Foriner added, was a player worth keeping an eye on. It planned to release its own operating system for mobile phones that fall. Which would also adversely affect the iPhone, at some point, Meir assessed. It could be worthwhile going with Google against Apple.

  Mid-September. Roni and his colleagues watched, astonished, as Lehman Brothers collapsed and the entire market entered a downward spiral. Roni spotted an opportunity. People were fleeing banking and insurance company stocks, he analyzed, but there was no reason for that to affect a manufacturer of mobile devices—on the contrary, people would be looking for real, working, successful products. Roni took a combined position. The RIM share was trading at a price of 105. He assessed that within a month the smoke would have cleared and it would rise to somewhere in the region of 125–130 and perhaps even 140, its value three months earlier.

  He played his gamble two ways: by purchasing “call” options, which would allow him in a month to buy the share at $115, which was lower than the value he assumed it would be. And by selling “put” options, which required him to buy the same share for $80, an even lower value. The expiration date for the options was a month into the future: Friday, October 17. From Roni’s perspective, it was a good bet. In addition to his theory about people fleeing the bank shares in favor of commodity stocks, he believed the faults and complaints concerning the iPhone and the disappointing sales figures would be all over the financial news, and maybe even the mainstream media, and that BlackBerry would go to town over it and pump out publicity for its new products and good sales. It was a rather confident position—Roni gambled in one direction only and didn’t hedge his bets. He was one thousand percent sure of himself, and he took money that belonged to the bank, the bank’s clients, Foriner and the rest of the Israeli clients, and his own, and he invested it. The position, according to the complex mathematical models he ran, had the potential to yield millions in a single month.

  In the first week the shares lost almost a third of their value and fell to $70. The second week saw the drop continue, but more moderately, and Roni believed that the parabola would now swing upward again. He stuck to his gamble, waiting until the expiration of the options. But the curve upward never came. The whole of Wall Street shook. It was hard to find a single stock that didn’t fall sharply.

  When the option expired, Roni’s position wasn’t covered. Far from it. The shares were trading at $55, the sums he had invested were wiped out, and worse, he was obliged to cover the put option and buy tens of thousands of shares at $80, now twenty-five dollars above their market value.

  Roni got the margin call from the bank—a telephone call to warn that the margin account was in the red, and he was instructed to pay up immediately: two million dollars. To cover the debt, he transferred cash from the company account and the accounts of his private clients—again forging Dale Savage’s signature—and purchased more options with a similar position. His rationale: After the fall in June came a correction. So the current drop must culminate in a rise. That’s what the pundits were saying, and what Roni told his friends in the risk-management department who came sniffing around. He turned forty that week but didn’t bother to celebrate. His nerves were too shattered for partying, and he didn’t have anyone to celebrate with anyway. He received the expected call from Gabi. It came during trading hours, and Roni told Gabi he was in the middle of something and would call him back in a few hours. He forgot.

  A month later, the stock continued to plummet, by then to below $40. A large round of layoffs hit Goldstein-Lieberman-Weiss, and one of the people dismissed was Dale Savage. Roni survived the cut. He saw it as confirmation that he knew what he was doing, and that management knew it. Roni withdrew more cash from the accounts of his private clients and the bank and purchased more options and evaded calls from the risk-management bosses and the clients, who were already in a panic regardless of what he was doing. The position he opened this time was worth millions. He continued to gamble on a rise in the RIM price, and also threw in shares of Google, which did indeed launch its mobile operating system, as Meir Foriner had predicted. This time Roni was dead sure he wasn’t going to fail. The market had been falling for two months already, all the historical data indicated that after the market tanks comes a leveling out, which is usually followed by a climb. He received another margin call and, left with no choice, withdrew $1.5 million from his private account to cover the risk. By November, the RIM stock had already shed $100—two thirds of its value. Google plummeted to a low not seen in three and a half years.

  In mid-November Roni stopped going in to work. He didn’t answer the calls from Jujhar Rawandeep, from Meir Foriner, from Alon Pilpeli, from Idan Lowenhof, and from others. While all of them did indeed have their own problems, Roni Kupper was one of their problems. Every time his BlackBerry rang, he felt it was making fun of him. He couldn’t pay rent and began to worry that his superiors and Israeli clients would show up at his apartment, so he took the Mercedes he’d purchased in better times and left New York. He traded it in for a cheaper vehicle at a car dealership in Ohio and lived on the twenty-some-thousand difference for two months—all his bank accounts and credit cards were blocked the moment he disappeared, and there wasn’t much in them anyway. He drifted from one motel to another, didn’t contact anyone (he took apart the BlackBerry and threw it into a garbage can at some gas station), and thought about what he was going to do with himself. In January he arrived in San Francisco. He couldn’t remember the telephone number of his Bosnian friend, Sasha, or his address, but went into the offices of the consulting firm where he worked and they helped him locate Sasha. The first thing Sasha said to him when he saw him was “You’ve gotten thin!”

  Roni stayed with Sasha for five days, until one evening the Bosnian’s phone rang while they were watching a DVD and eating Chinese takeout. Sasha answered and then paused the movie and looked at Roni and signaled with a finger to his lips. “Shhh . . .”

  He ended the call and said, “It’s some private investigator. People are looking for you. The Israelis whose money you looked after. They asked if you’ve been in touch with me recently. You didn’t tell me you lost millions from private portfolios. They want to take legal action.”

  “I lost? They lost. Everyone lost. What do they want to charge me with?”

  “He said something about unauthorized trading, exceeding credit ceilings, lies, forgeries. He said there are also witnesses to insider trading . . . Listen, Roni, I’ll help you as much as you need, but I don’t want to get into any trouble.”

  Roni looked at Sasha and said, “Let’s finish the movie, and then I’ll decide what to do.”

  In the early hours of the following morning, Roni dressed in his smartest Hugo Boss suit, put on a tie, polished his shoes, drove to the airport, purchased a ticket to Tel Aviv, and breathed a sigh of relief when his name didn’t pop up on the no-fly list. The first flight was to Los Angeles, where he boarded an El Al flight direct to Tel Aviv. After paying $3,600 for the ticket (business class, because after all, if he had to leave, at least let it be in style) and fifty dollars for two light blue cartons of cigarettes—he was left with two hundred dollars in cash in his pocket. Al
most twenty-four hours later, he arrived at Gabi’s trailer in Ma’aleh Hermesh C.

  BACK TO BASICS

  The Ninja

  The black asphalt that stretched and wound through the hills had seen a lot: the tires of cars and the tracks of armored personnel carriers and the clopping of donkeys and the patter of goats. A merciless sun had melted it and angry rain had crashed down on it and snow had softened it; rifle bullets and old Jordanian mines and large boulders and the teeth of D-9s and the concrete blocks of checkpoints and mud and stones had formed potholes and bumps. It had been painted a thousand shades of gray, it had been opened and closed to traffic. And that Thursday morning: an apocalyptic yellow in the skies, winds of such force that it seemed even the ancient trunks of the olive grove had yielded and were bending, and then relentless rain, which washed over everything regardless of gender, race, and religious faith, thundered on the windshields of cars and their metal skins, eventually drowning out the political babble on the radio, and the hands-free conversations went quiet. And even the in-car debates, for example the loud argument that was under way in Othniel Assis’s battered Renault Express between his daughter Gitit and his son Yakir, paled and surrendered and made way for silence, and contemplation, and admiration for the uncompromising power of nature and God, and a slight sense of fear of that same power, and, in the case of Captain Omer Levkovich, a frustrating uneasiness. Not only was he traveling in a David jeep, which was supposed to be brand-new and airtight but was allowing in cold air like an air conditioner in August, and not only was the deluge mocking the excuse for a roof and dripping onto selective parts of his anatomy—in addition to all that, when the jeep passed below Majdal Tur, its tire went over a ninja: two six-inch nails that had been bent and welded together. Omer sat on the wet seat, waited for the rain to subside, and said to himself, You won’t lose your temper, you’ll take a deep breath, you’ll fix the flat in no time and move on.