A cartoon of a man in a suit running - titled "The Fear Index"

Money Culture

The Science Fiction of Financial Markets

A lot of us feel when we look at the Dow Jones plunging [that] we’re in the grip of some alien force that slips human control.                                                                                           — Novelist Robert Harris

The stock market in May 2010 seemed to “come alive” when it swooned 1,000 points within minutes, Harris said in a bone-chilling radio interview that’s worth a listen for Main Street investors.

His new thriller, “The Fear Index,” which the London Telegraph called “unputdownable,” is about a hedge fund manager.  But in the interview, Harris expressed his desire to take readers beyond the business reporter’s technical explanations for the market’s wild swings up or down.  A solitary, $4 billion trade, the media widely reported, caused the 2010 Flash Crash that left an impression on the novelist.  As Europe teeters on recession, it’s anyone’s guess how the Standard & Poor’s 500 stock market index has managed to soar more than 7 percent since Jan. 1.

Wall Street experts may be able to make sense of a hair-trigger market, but Harris’s sci-fi explanation is appealing to the rest of us.  He invokes the imagination – or, perhaps I should say, the artificial intelligence lab at the Massachusetts Institute of Technology.

To hear Harris’ interview on National Public Radio, click here.

2 Responses to The Science Fiction of Financial Markets

  1. John Graves says:

    Or, as Pogo has said, ‘we have met the enemy and he is us!’
    Call it SiFi, call it HSF manipulation. The fact is that Mr. Market has fits of pique that are not subject to rational thought or regulatory oversight. It has happened in 2007, 2010 and may have been behind the ten moves of 1,000+ last year.
    We value investors have to either ignore the event, or stand aside when such a storm arrives.
    As a reminder, there are no ‘Wall St. experts’. There are simply those who bill themselves as such. Having done this business for nearly thirty years, those of us who know Mr. Market’s ways survive. The rest simply talk.

  2. Scott says:

    This book looks gripping and sounds nerve-racking. There is far more to the financial markets and hedge fund trading than numbers. There are intense emotions. These are the types of emotions involved in trying to best a friend by dumping shares into the market causing theirs to fall. There is emotion into selling some guy stock options he does not need, just for the commission. There is emotion in starting rumors about the viability of a stock or person involved with it. I look forward to purchasing this book. Thanks.