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A successful Wall Street trader turned neuroscientist reveals how risk taking and stress transform our body chemistry
Before he became a world-class scientist, John Coates ran a derivatives trading desk in New York City. He used the expression “the hour between dog and wolf” to refer to the moment of Jekyll-and-Hyde transformation traders passed through when under pressure. They became cocky and irrationally risk-seeking when on a winning streak, tentative and risk-averse when cowering from losses. In a series of groundbreaking experiments, Coates identified a feedback loop between testosterone and success—one that can cloud men’s judgment in high-pressure decision-making. Coates demonstrates how our bodies produce the fabled gut feelings we so often rely on, how stress in the workplace can impair our judgment and even damage our health, and how sports science can help us toughen our bodies against the ravages of stress. Revealing the biology behind bubbles and crashes, The Hour Between Dog and Wolf sheds new and surprising light on issues that affect us all.
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.