 |
| Joan Coates |
Bloomberg
May 14, 2012
As a Wall Street trader named Scott watched the mortgage market crater in late 2007, a switch buried deep in his brain flipped.
What happened next is anatomized, tick by clinical tick, in John Coates’s unsettling book, The Hour Between Dog and Wolf.
Scott’s heart rate sped up, to pump extra blood to his arms and thighs, Coates writes. His pupils dilated, to absorb more light. He began to sweat, his breathing accelerated and he got a hit of adrenalin. Then, as his losses surged to $24 million, his bowels liquefied.
Though Scott is a fictional representation, his symptoms are all too real, judging from the observations of Coates, who spent 12 years trading derivatives for Goldman Sachs Group Inc. (GS), Merrill Lynch & Co. and Deutsche Bank AG. (DBK)
“As losses mount on the trading floor, one observes anxious traders marching briskly to the toilets, the men’s room starting to exude the fear and stench of a slaughterhouse,” he writes.
If this book isn’t on Jamie Dimon’s reading list, it should be following the $2 billion trading loss at JPMorgan Chase & Co. (JPM)
The biological side of financial markets struck Coates during the dot-com bubble in the 1990s, as he watched normally prudent tech-stock traders become overconfident, reckless and euphoric. At the time, he had become fascinated with breakthroughs in neuroscience, notably research into how hormones affect the brain, influencing how we think and behave.
Could it be that testosterone was impairing the judgment of traders, making them feel infallible and propelling markets to unsustainable heights? Then, as tech stocks crashed, were traders overwhelmed by a stress hormone, cortisol?
More
No comments:
Post a Comment