Sarah Sands: The future is fearful. Ask Robert Harris...

Share
Related Topics

Philosophers and politicians may agree that you should face down your fears in order to obtain wisdom and courage, but they are not the ones investing in the stock market at the moment. The stomach-churning losses in the last week may have underlying causes but the momentum of short-selling is attributed above all to the smell of fear.

Still, one person's loss is another's opportunity. The global panic in the markets happens to coincide with the publication of Robert Harris's new thriller. In it, a brilliant scientist invents a computer that can make predictions about the global financial markets. The computer picks up a far more powerful force in the markets than information. It is fear, the most primal emotion. As Napoleon said: " There are only two forces that unite men. Fear and interest." When the two come together in stock markets, the results are catastrophic.

Harris's title, The Fear Index, is close to the market instrument The Volatility Index, a measure of the volatility in share prices. It can tell you how everybody is feeling. At the moment, investors are buying gold. Does that suggest that they think things can only get better?

The strongest characteristic of fear is its contagion. You would guess that since the markets are being scrutinised by experts they could form calm independent opinions. But investors turn out to be more hysterical that the rest of us, probably because they have a lot more to lose.

As Harris's computer creeps into the territory of artificial intelligence, it realises that terrifying people can be a reliable way of making money. I hope that The Fear Index is not the inspiration behind the decision of some famous investment bankers to go and form their own hedge funds. Is this the way the world ends, with one mass global short-selling?

The risk-takers will no longer say boo to a goose. They are hoarding like hairy survivalists. Who will tempt them out of their shelters? After the gigantic hoax of sub-prime lending, financial institutions may never trust each other again. Everyone is looking over their shoulder – Europe at Asia, Asia at America – while investors' heads are swivelling frantically.

The trouble with the fear index is that it crushes hope. Financial giants such as the American investor Warren Buffett may talk of having a "huge bull on this country" but people are too spooked to believe him. Whether or not we are all heading for a double-dip recession, we will talk ourselves into one. No private investment: no growth.

What we need is a genial figure radiating Reaganesque sunny politics, but unfortunately David Cameron is now about as cuddly as Robespierre. The fear index is social as well as financial. We have peered into the abyss of disorder. At first we blamed gangs and criminals, but within a week everyone was citing the Stanford prison experiment – where half the students were told they were guards, the other half prisoners – and civilisation was hanging by a thread.

A young woman who lives in Tottenham told me that she was still afraid to come to work in central London. It was not the prospect of looters she feared but that the riots would be a catalyst for a terrorist outrage, "because we are vulnerable now".

Once fear is triggered, it is very hard to restore calm. But I recommend the banner held aloft by a woman in London. It said: "Everything is OK."



Sarah Sands is deputy editor of the 'London Evening Standard'

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Langley James : Web Developer; PHP, MySQL, Java; Blackfriars; £25k

£25000 per annum + training: Langley James : Web Developer; PHP, MySQL, Java; ...

h2 Recruit Ltd: Sales Manager - Holiday Homes - £100,000 OTE

£40000 - £60000 per annum + £100,000 OTE: h2 Recruit Ltd: Birmingham, Derby, L...

h2 Recruit Ltd: New Business Sales Manager - Talent Management - £60,000 OTE

£35000 - £60000 per annum + benefits: h2 Recruit Ltd: A true market leader in ...

Recruitment Genius: Business Development Consultant - OTE £35,000

£18000 - £35000 per annum: Recruitment Genius: A Business Development Consulta...

Day In a Page

Read Next
The racy marketing to entice consumers to buy Fairlife, which launches in the US next month  

The Fairlife 'Coke Milk' adverts: Do we really need pin-up girls to sell us drinks?

Ylva Johannesson
Australian cricketer Phil Hughes has died aged 25  

Phillip Hughes: A sensational man, both on and off the pitch

Angus Fraser
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?