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18 Nov 2011 11:54
The Fear Index by Robert Harris (Hutchinson)
The Fear Index, a financial what-if, takes place entirely on the day that the Blair-Brown years officially ended: May 6 2010, election day.
Britain, though, features only in the occasional flashback memory of its characters, with the 24 hours of action playing out in Switzerland. Living in reclusive luxury beside Lake Geneva, Dr Alexander Hoffman, an American physicist married to an English artist, is number 177 on the Sunday Times rich list, calculating his own wealth as “a billion, a billion-two”.
He has accumulated this by applying the science he learnt while working on the Large Hadron Collider at Cern to the running of a hedge fund.
Hoffman has constructed a “machine-learning algorithm”, a super-computer that trades around the world after analysing data including market behaviour and news stories.
Crucial to both the plot and Harris’s broader theme, this dealer-machine, called VIXAL-4, feeds on fear, anticipating flights from stock before flesh-and-blood brokers make them. The premise is expressed in a rather dodgy aphorism that has been picked out and magnified in the book’s publicity: “Fear is probably the strongest human emotion, period. Whoever woke at four in the morning because they were feeling happy?”
But this is a rare false note. VIXAL-4 succeeds partly by keeping a close eye on the news—and clearly so does Harris. The plot ingeniously combines a number of recent phenomena—financial, political, online and artistic—covered by journalism.
The tension is also considerable as readers apprehend early on that the artificially intelligent broker is a financial HAL—as in 2001: A Space Odyssey, the question is whether the computer has moved beyond the control of its creator.
Hoffman’s own fear index soars after he is physically assaulted in his mansion and after an apparent cyber-attack, which seems to have no obvious author.
Grippingly dramatising the workings of the economy (I understood for the first time how hedge funds work), The Fear Index is, in another sense, an economic novel, not merely in its condensed time-scheme but also in its sparing wordage: though running to more than 400 pages, these are widely spaced and some carry fewer than 150 words.
A speedy read, though, is the appropriate medium for a story in which many of the key events—deep in VIXAL-4’s “brain—take place in milliseconds.—
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