The Fear Index; A Review of Robert Harris's New Novel About the Flash Crash

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Business and thrillers make uneasy bedfellows. If the story is filled with too much technical detail, the "average reader" is dismayed. If the book isn't technical enough, the professional will laugh it off or lose interest. In his new fictionalized account of the Flash Crash on 6 May, 2010, of Robert Harris toes the technical line but surprisingly loses the reader, or at least one reader, with too much detail of another kind.

The Fear Index draws together three disparate strands into thriller form. First there is the financial crisis beginning in 2008 and the further, anomalous day of the mini-maximum crash. Only the astute reader will grasp that from the beginning Mr. Harris has set his book on that date. Second, there is the world of artificial intelligence, in this case the creation of a self-teaching computer. Third, there is evolution. In fact, one of the best features of the novel is the careful and surprising Darwin quotes selected to open most of the book's chapters. They portray a Darwin who is a much more nuanced and observant thinker about human behavior than his public image encourages, and makes the reader want to pull down copies of his books.(1) In the course of The Fear Index, Darwin's later volume, The Expression of Emotions in Man and Animals (1872)  figures prominently as a plot point.(2)

The fear index of the title is a real thing, as traders will know. Otherwise known as the Chicago Board Options Exchange Market Volatility Index, the VIX was first mentioned by Robert E. Whaley of Vanderbilt University in a 1993 paper. It measures the 30-day extent of "implied" market volatility in the S&P 500. It is not without its critics


Published last fall in England by Hutchinson, and now in the United States by Knopf(3) (304 pages, $25.95, ISBN 978.0.30795.793.1), The Fear Index takes place over the course of about 24-hours. Alexander Hoffman is a former physicist who six years earlier left CERN to start a Geneva-based hedge fund in partnership with  British ladies man Hugo Quarry. Hoffmann Investment Technologies is an algorithm-based fund, and over the course of the six years of its existence has offered a remarkable Madoff-level 80% return to its clients. Harris paints the kind of world in which Hoffman makes $3 million dollars "since going to bed". The secret of success is the software VIXAL-4, the latest generation of the artificial intelligence device, whose secret in turn is that it scoops up all intel about everything in the world all the time, and thus makes prescient, predictive buys and sales.  The thrust of the narrative is Hoffman learning that his machine is not just an autodidact computer but the Forbin Project.

In addition, Mr. Harris stirs in some outrageous aspects of recent European life that are cleverly integrated into the action. More said would spoil the surprises, but the book begins with Hoffman awaking in the night to the sound of a stranger in the house, and goes downstairs to find a man in his kitchen sharpening knives.

It's that walk around the house that throws you, however. Readers coming off the work of, say, James Ellroy or Elmore Leonard might find themselves impatient with Mr. Harris's old fashioned if efficient prose style. He blends the skills of Stephen King and Michael Crichton. From the late Crichton he adopts the informative "breaking news" aspect of pop novels, the Michener School, so to speak. Mr. Harris will pause the novel from time to time to explain things to the reader, via the device of the main character explaining things to others, or thinking "out loud" in the "overvoice." But Mr. Harris also indulges in that meticulous description of everything that a character sees and does that Stephen King has used to bulk out his novels over 40 years. A character can't just show up somewhere, he must leave his house, carefully closing and locking the door, stepping with a spring in the step to the car, inserting the key into the lock, opening the door, carefully sitting down, adjusting the seat to the carefully enunciated preferred distance, inserting the key into the ignition and listening to the reassuring purr of the engine, tuning the radio to a favorite song, which then must be analyzed nostalgically, and then driving to the place, along which route, the character must think a thousand thoughts ultimately irrelevant to the tenor of the scene, much less the narrative. It should be said that the first method results in the best parts of the book, while the second method results in a lot of tedium. Unfortunately, the second approach is in abundance. It takes Hoffman some seven to 10 pages to get from his bedroom to outside his house looking in to see the intruder.

Besides The Forbin Project, the book has a bit of The Terminator in it (SkyNet implications) and especially Frankenstein, which provides the opening epigraph and which is also the essential dynamic between Hoffman and his creation. A thriller must make the implausible seem probable, and to do that Hoffman explains his theories via the stand in of potential investors in the book's key chapter, No. 6:

Hoffman tells his group of potential investors that "Computers are increasingly reliable translators in the sectors of commerce and technology. In medicine they can listen to a patient's symptoms and are diagnosing illnesses and even prescribing treatment. In the law they search and evaluate vast amounts of complex documents at a fraction of the cost of legal analysts. Speech recognition enables algorithms to extract the meaning from the spoken as well as the written word … Pretty soon all the information in the world – every tiny scrap of knowledge that humans possess, every little thought we've ever had that's been considered worth preserving over thousands of years – all of it will be available digitally … But here's the thing. Human beings still read at the same speed as Aristotle did. The average American college student reads four hundred and fifty words per minute. The really clever ones can manage eight hundred. That’s about two pages a minute. But IBM just announced last year they're building a new computer for the US government that can perform twenty thousand trillion calculations a second. There's a physical limit to how much information we, as a species, can absorb. We've hit the buffers. But there's no limit to how much a computer can absorb … We can'’t analyse every aspect of human behaviour in the markets and its likely trigger over the past twenty years, however much data is now digitally available, and however fast our hardware scans it. We realised from the start we would have to narrow the focus right down. The solution we came up with was to pick on one particular emotion for which we know we have substantive data.'"

"'So which one have you picked?'"


That's a dramatic moment, but it's hard to see how it can translate to a film. Perhaps Mr. Harris proudly doesn't want his book to be adapted.(4) Which is admirable given the book's context of the struggle of the human mind against its superior in technology, the processor. But books like his are supposed to be "cinematic reads," and Mr. Harris thwarts the urgency the reader might feel with his steroidal prose about minutiae of walking, sitting, driving, running, reaching, and grasping.


1  Here are some of the book's quotes from Origin of Species (1859):

"A grain in the balance will determine which individual shall live and which shall die …"

"There is no exception to the rule that every organic being naturally increases at so high a rate, that if not destroyed, the earth would soon be covered by the progeny of a single pair."

"… the struggle [for existence] almost invariably will be most severe between the individuals of the same species, for they frequent the same districts, require the same food, and are exposed to the same dangers."

And here are some from The Descent of Man (1871):

"Suspicion, the offspring of fear, is eminently characteristic of most wild animals."

"Hardly any faculty is more important for the intellectual progress of man than ATTENTION. Animals clearly manifest this power, as when a cat watches by a hole and prepares to spring on its prey."

"No doubt wealth when very great tends to convert men into useless drones, but their number is never large; and some degree of elimination here occurs, for we daily see rich men, who happen to be fools or profligate, squandering away their wealth."

"Even when we are quite alone, how often do we think with pleasure or pain of what others think of us – of their imagined approbation or disapprobation; and this all follows from sympathy, a fundamental element of the social instincts. A man who possessed no trace of such instincts would be an unnatural monster."

Taken together, these chapter headers amount to a What Would Darwin Do type book, or Charles Darwin CEO, guides to navigating through corporate culture.

2 A first edition of the book goes for $15, 000 dollars, we learn.

3 Both Hutchinson and Knopf are part of the Random House Group, whose ultimate owner is the privately held Bertelsmann AG.

4 Only four of his novels have been adapted, most famously The Ghost, turned into The Ghost Writer by Roman Polanski.

Fool blogger D. K. Holm does not own shares in any of the companies mentioned in this entry.

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