Fear by Robert Harris Review

If you have a stock portfolio with a bank or dare to be even, online itself to act, so I suggest you after reading Robert Harris’s latest thriller “Fear”, speedily from the gamers business of bets on rising or falling prices get out. Because you are to act (most likely) only a small light and try to reason. However, with intellect rate developments can often not be explained: profit forecasts of corporations can often drop their indexes, while bad news can lead to price increases.

And the days of controlled human brain floor trading are numbered anyway, because soon the entire financial world is almost exclusively dominated by computers.

As we close this vision of the future were already, we experienced on May 6, 2010. Within minutes rustled stock prices in free fall, the Dow Jones lost around 1000 points. It continued to trade in the short term. Curiously, the barometer rose then and made his losses by two-thirds up for it. But within ten minutes 1,300,000,000 shares six times the average and over the entire decade between 1960 and 1970.

The orders were were nearly been traded issued within milliseconds – for the human mind difficult to understand. ‘What happened then, has never been fully explained. The final report of the Securities and Exchange Commission (SEC) states, a single investment company has initiated a computerized sales program. About 75,000 so-called e-mini contracts were sold off at any price, something like panic selling looked and triggered a chain reaction. A trillion dollar market capital was destroyed by it.

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The “Flash Crash” named legendary scenario gave the triggering investment company 4.1 billion US dollars profit, for they had secured with the legitimate “hedging” strategy against losses.

The first hedge funds, on hedging and profit maximization designed, was founded in the year 1949 by AW Jones. What then still made Broker, analyze namely indexes, the correct entry point for the transactions Select, etc., is adopted today by computers programmed with algorithmic trading software, operate independently.

In a Handelsblatt interview on 23/11/2011 pulls Robert Harris following conclusion: “the events in the financial markets are much more important than, say, the threat from Islamist extremists.” On the basis of the real event and the possible further development in the future with potentially more catastrophic consequences Harris wrote his fictional financial thriller. We arrived in a fully digitized and controlled world.

The 42-year-old American physicist Dr. Alexander Hoffmann, a former employee at CERN (the European Organization for Nuclear Research in Geneva), has his own business and VIXAL-4 created an algorithmically perfect software that amp the volatility of the S & P evaluates 500, learn from mistakes and thus self developed further – that is an artificial intelligence. To market his product profitably, he has the “Hoffmann Investment Technologies” company founded and lured the best math and physics graduates with high salaries. committed to absolute secrecy, now its multi-screen computers in a maximum-security prison

work fifty quantitative analysts, contemptuously quants called before the monitors in the paperless office. Since Hoffmann, a brittle, introverted loner who hates the public he has taken an equal business partners to his side, which is responsible for the recruitment of investors. His name is Hugo Quarry, is a pompous, mannered Südengländer, adept at dealing with people.

Today are charged a handful of big capitalists, who Quarry VIXAL-4 is to imagine. As he prepares for the conference, which monitors play crazy because VIXAL-4 acts: 1.5 million put options, an absolutely unusual number of trades – and all short positions to a single stock that the Vista Airways. Later, it is known that a Vista machine has crashed on approach to Moscow. Could VIXAL-4 about predict that? In fact, the program specializes in that it recognizes that disasters, civil unrest, fears in the market early on learns autonomously from it and behaves situation accordingly. As a result, many more stocks from the S & be; P 500 repelled, and the Dow crashes. Hoffmann gets it to do with the Frankenstein fear: Is his self-created child a monster? Is it responsible for the crash of the markets? Somehow he VIXAL-4 switch off – but how

Since the early morning Hoffmann was under psychological pressure?. At midnight, he turned in a first edition of Charles Darwin’s “The Expression of the Emotions in Man and Animals” from 1872, which had sent him a used bookstore in Amsterdam, then a man broke into his secure with codes and cameras Villa. When he learns that he himself ordered the book via email and paid from his account that he himself ordered the burglar and called him the code is that it has (an artist) bought all exhibits his wife on the day of opening, comes over Alex very afraid of himself – because he can not remember any of this. The only explanation he believes in a large plot against him.

This action is not consumed only superficially and current, but greater intellectual history relationships are recognized, Harris has preceded each of the nineteen chapters a quote that most of Darwin’s “the origin of species” (1859) and “the descent of man” (1871), by Bill Gates, Elias Canetti and other the other. Noteworthy is already the first quote (from Mary Shelley’s “Frankenstein” novel of 1818): “… how dangerous knowledge is and who holds how much happier one man his hometown for the world, as one who wants to be bigger than allowing its nature. ”

Robert Harris’s financial thriller” fear “could be placed at a better time on the market than now. After all, the financial crisis that nice talk scientists and politicians with new coinages as barely controllable, makes any fear in reality. Just imagine what if the billions that are zugebuttert daily from somewhere, but the markets could not support geschähe ultimately. If the computer has programmed to crash? A few fellows with perspective, audacity, risk-taking or happiness would make cash; But the bill would catch on us normal citizens.

What does the future hold? How can we make it? This analysis must be done sober, and as fear is always a bad counselor.