The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust by John Coates

Dog

In this immensely readable book, John M.Coates speculates about the power of physiology on the irrational and conscious acts of man with a specific reference to the fragile and volatile financial markets. As Coates pries out the unseen but unavoidable workings of testosterone and cortisol that manifest in myriad ways, he argues that a thorough understanding of the precision perfect cohesion between brain and body might in the near future,lead to a successful mitigation of risks in a overheated financial world.

The mind body unitary/duality theory has been debated, discussed, deliberated and devoured for thousands of years now. This conundrum has stared right in the face of and boldly stared back by the likes of Aritotle, Rene Descartes, and Immanuel Kant. However this vital question has not merely been a Philosopher’s Holy Grail. The mind/body niggle has also been the preserve of eminent psychiatrists, Nobel Prize winning neurologists and physiologsts.

Extensive, albeit painstaking research into the field of the human brain has enriched man’s understanding manifold into the patterns of communication between the brain and the body. The functions of testosterone and cortisol (the latter termed the molecule of irrational pessimism by the author) have lent invaluable insight to the universal phenomena such as ‘The Fight-or-Flight Response System’ and ‘The Rest-and-Digest Response System’. These two natural and inbuilt defence mechanisms serving two tangentially different objectives provide a great insight into the conscious as well as unconscious acts perfromed by an individual. Does the presence of more women on the trading floor in the capacity of traders and trading managers obviate the chances of avaricious risk taking? Does the inhibition of testosterone reduce the tendency of a boisterous and young trader to plunge into a manic risk accumulation spree? Does the behaviour of middle managers during a recession enhance or exacerbate the already muddled and confused thought processes of a sub-ordinate? All these questions are attempted to be answered by Coates with the backing of some extremely interesting data and incredible on-the-floor experiments.

Taking recourse to a combination of clinical research, informed speculation and noticed behaviour, John Coates has come up with a well researched and most importantly, well intentioned work, progress directed toward which might, in future, see a dimunition if not a complete extinction of many a Financal Crisis and Recession.

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