Ron Arden's Reviews > The Fear Index

The Fear Index by Robert Harris
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M_50x66
's review
Apr 23, 12

Read from April 19 to 23, 2012

I couldn't put this book down even though I guessed what was happening long before the end of the story. This is one of those books that I was reading faster and faster so I could see how it turned out.

The story is about a physicist, Alex Hoffman, living in Geneva who is obsessed with artificial intelligence or as he prefers to call it, autonomous machine learning. He started the research in college and continued working on it at CERN as part of the Large Hadron Collider project. He left and started a hedge fund with a man, Hugo Quarry, who was in the banking business. Alex and a group of PhDs developed the algorithm and computer program that drives the hedge fund. It is a learning algorithm and has generated a remarkable return to the company and its investors.

Things start going awry when Alex is attacked in his heavily guarded home. The investigation indicates that the intruder had all the codes to the gates and locks. Alex is a science aficionado and enjoys collecting first edition science books. He loves Darwin and gets a first edition in the mail with no card. He discovers that he, supposedly, purchased the book by email using an account in the Cayman Islands that he didn't know he had. Alex's wife, the police and his colleagues thinks he is suffering a mental breakdown and he starts telling them stories of some conspiracy. He things he was hacked and someone is trying to drive him crazy.

Alex is a genius and the brains behind the success of the hedge fund. Hugh is the charming schmoozer who gets the clients and keeps the face of the business in tact. As the story continues, Hugh is seeing his gravy train go away, since he thinks Alex has lost it. The story is an amazing combination of sciences, technology and adventure story. I felt as if I was reading a James Bond novel or watching "The Fugitive". The action and intrigue just gets better as you read.

The computer program running the hedge fund is called VIXAL-4, named after a financial index that measures market volatility. The program correlates information from the news, numerous sites on the internet and financial feeds to determine where fear exists. It uses that to drive investments. The hedge fund managers start questioning the program when it seems to be making irrational trades. It goes against everything they know about finance, except that it's making a huge amount of money.

Eventually Alex realizes what's happening and tries to correct things. I don't want to spoil the story, but suffice it to say there are shades of HAL and 2001 in it. If you love adventure, intrigue, science and technology run amok, you will love this book. I'm not sure if Robert Harris is warning of the dangers of AI or if he's just creating a great story. Either way, it was entertaining.
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