What the Post-Crisis Novel Can Teach Us About Finance

By Alex Brokaw

NEW YORK (Minyanville) --

Money is a horrid thing to follow, but a charming thing to meet.
--Henry James

It's been a long day. The markets crushed you. You crawl home, pour a tall drink and pick up that book you've been meaning to start, a novel your friend who teaches Early English Lit gave you. Something to get your mind off of things.

VIX Index. Oil Futures. Quantitative Analysis. Mortgage-Backed Securities Fraud. Japanese Candle Stick Charting.

Wait, no. This is wrong. You don't want to read about this. This is supposed to be a novel. It's supposed to be an escape from the financial world, right?

In article for the Financial Times last month, author and journalist John Lanchester recalls why there hasn't been much talk about finance in high-grade literary fiction. That is, until now. Two unlikely bedfellows, the novel and Wall Street, have intertwined in the past few years, breeding a crop of literary fiction that might be dubbed the post-crisis novel.

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"There's definitely a flowering of books that are recession novels, not just finance novels. It's an obvious preoccupation now," explains Teddy Wayne, author of the novel Kapitoil (2010), in a recent interview.

Kapitoil is published by Harper Perennial -- a subsidiary of News Corp. ( NWS) -- well known as an industry standard for high-grade fiction. In the novel, Wayne details the tribulations of a Qatari financial wizard lured to New York City by a financial figurehead. (The Wall Street firm his character works for might be modeled on Morgan Stanley ( MS), JPMorganChase ( JPM), or Goldman Sachs ( GS).) Here, adrift in an unfamiliar culture, he develops a computer program that takes advantage of political instability in the global oil markets. Kapitoil is not a financial thriller, the sub-genre famous for fast-paced plots and glossy covers. It's a fully realized novel that weighs the pursuit of passion and profit against real-life questions of morality.

Writing for the Huffington Post, Anis Shivani hails Kapitoil as "immense and unrepeatable." The novel earned Wayne an esteemed fellowship from the National Endowment for the Arts, and was an editor's pick at both Publishers Weekly and Booklist.

"What you try and do as a fiction writer is find the unacknowledged side to a character," Wayne explains of creating financial characters in his fiction. "A purely greedy, mercenary stock trader or broker won't make for a compelling character description. It will just be repeating conventional wisdom."

Leah Hager Cohen's The Grief of Others is another in this class of fiction aimed at humanizing the financial industry. Tracing the romance between two diametrically opposed "technicians" -- a theater set designer and a financial engineer -- there's little glorification of wealth in this prize-winning book. Its central character Ricky, a quant, is attracted to her profession not by the promise of riches, but by a love for solving complex problems. Meanwhile, her husband John wonders whether high income equates to high happiness, and secretly wishes his family had been harder hit by the financial crisis.

While these characters are dealing with modern issues, fiction has certainly grappled with the financial world in the past. Wayne goes on to explain, "Fiction tends to be reactive to finance. It's a sexy subject if you're making money. In times of a bull market, literature about finance can also serve as corrective. We diagnose bankers and their lifestyles and morals in fiction. Therefore, Bonfire of the Vanities in 1987 is very salacious and exciting, because it's heady times and people are acting badly as well.

"On the flip side, during the Great Depression you have a lot of literature about finance and money in general because you need to. The conditions are so severe that art must address it, and does so in novels like The Grapes of Wrath. But then in these times, right now, its neither a bull market nor a bear market: we're not lined up in the streets for bread, and we're not snorting cocaine."

People aren't looking to read austere satire of financial culture, like Brett Easton Ellis' American Psycho or William Gaddis' JR. They're becoming less interested in the post-9/11 narratives as well, like Joseph O'Neill's Netherland or Don DeLillo's Falling Man.

"Now, we can neither mock those who are superior to us, nor identify with those who are on the lower emotional planes," Wayne adds. In many ways, these post-9/11 novels -- concerned with the emotions surrounding the terrorist attacks, with Wall Street being an unavoidable theme -- have paved the way for financial narratives concerned with more than just finance.

DeLillo authored another piece, a short story, which helped to ground a sense of this modern theme. Hammer and Sickle, originally published in Harper's Magazine in 2010, is a direct reaction to the 2008 financial meltdown. The narrator is an inmate in a minimum-security prison, incarcerated for unspecified financial crimes and forced to watch his young daughters on television daily. Their mother has enrolled them as the anchors of the child-run, financial news broadcast. The girls' reports on the global debt crisis often devolve into a series of foreboding questions.

"Will Greece abandon the euro?"

"Did Greece hide the nature of its debt?"

"What is Wall Street's role in this critical matter?"

"What is a credit default swap? What is a sovereign default? What is a special-purpose entity?"

"We don't know. Do you know? Do you care?"

"What is Wall Street? Who is Wall Street?"

The story picks up on one of the less recognized outcomes of the 2008 financial crisis: The language of Wall Street has entered the modern lexicon. The technical jargon once restricted to boardrooms and trading floors can now be heard on Main Street, in or out of context. It's a phenomenon that's allowed modern novels to stay focused on the personal lives and emotions of characters in finance, while avoiding drawn out, complicated descriptions of the industry's processes.

This explains the recent appearance of powerhouse novels like Adam Haslett's Union Atlantic (2010), which elegantly handles the power struggles between the upper echelons of the financial world and the government regulators trying to control them. Or The Financial Lives of Poets (2009) by Jess Walters, a hilarious take on the exploits of an out-of-work financial journalist who's overwhelmed with insecurity in the wake of the 2008 meltdown. Add to these Christine Alger's The Darlings (2012), Martha McPhee's Dear Money (2011), and Jonathan Dee's The Privileges (2010): All literary fiction, all informed by a greater understanding of the mechanisms driving the modern economy.

Then why is the post-crisis novel so important? Shouldn't your eyes be glued to the ticker, not the page? Not necessarily. It's no secret that fiction has played influential rolls in finance before. Ayn Rand's Atlas Shrugged, for example, which glorified laissez-faire economics, is well known to have influenced former Fed chairman Alan Greenspan, whose free-money policies were (at least) partially responsible for the sub-prime mortgage crisis.

Writing for the literary website Untitled Books, former hedge-funder, now novelist Alex Preston weighs in on the issue of "crisis fiction," or what he calls panic fiction. "The reason that markets move in boom-and-bust cycles is because they closely track the patterns of the human mind, of human emotions."

He's right. Stocks are ultimately driven by the emotions of the traders who buy and sell them. That's what these novels have to offer: A better understanding of these emotions. Post-crisis fiction leads us toward elegant conclusions, while the markets never can. They also offer what the ticker will never be able to give: A conclusion, and maybe, if only temporarily, peace of mind.

--Written by Alex Brokaw of Minyanville.

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