The Hour Between Dog and Wolf: Risk Taking, Gut Feeling, and the Biology of Boom and Bust

Far from the preserve of cold-blooded rationalism, Wall Street is dominated by primitive drives and hormonal surges, argues this scintillating treatise on the neurobiology of the business cycle. Coates, a Cambridge neuroscientist and ex–Wall Street trader whose previous studies have shown that male traders perform better when they have elevated morning testosterone levels, draws an intimate portrait of life on a trading floor, with its intuitive, rapid-fire deal making under pressure, as an almost physical athleticism directed by brain processes and chemistries evolved for less cerebral pursuits. As bond markets soar and slump, he notes, traders experience involuntary fight-or-flight reflexes, jolts of dopamine, and convulsions of the primal “gut brain.” In bull markets, the euphoric boost in testosterone from successful trades fuels ever crazier risk taking until the inevitable collapse, when the defensive steroid cortisol takes over and turns financiers into risk-averse paralytics dependent on government bailout and stimulus. Coates takes economist John Maynard Keynes’s idea of entrepreneurial “animal spirits” and grounds it in hard science, while introducing readers to a brain that’s inseparably intertwined with a very demanding body. The result is a provocative and entertaining take on the irrational exuberance—and anxiety—of the modern economy. Agent: Natasha Fairweather, AP Watt, U.K. (June)