As the smoke rises over
the oil fields of Middle East, a different kind of fire has engulfed Dalal
Street. The headlines across the country are staggering: "Lakhs of Crores
Wiped Out,” "Sensex Bleeds as Oil Spikes.” Investors have lost
approximately ₹14–15 lakh crore in market valuation, with wealth erosion
exceeding ₹30+ lakh crore since the conflict
To the political class,
this is an opportunity for finger-pointing; to the average investor, it is a
tragedy of "lakhs of crores." But to me and my tribes, who work in
science museums, curating the histories of science and mathematics, this
"bloodbath" demonstrates a theory that spans from the double helix to
the cricket crease. It is a moment where the "pure" science of the
20th century explains the "applied" chaos of the 21st.
The Astonishing Market
Hypothesis
While researching the
Human Genome Project for a 2003 curation, I found myself captivated by the post-DNA
career of Francis Crick. Most remember him for his discovery of DNA, which
earned him the Nobel, but Crick’s later career at the Salk Institute was
dedicated to a much more elusive goal: the "Astonishing Hypothesis",
which offers a revolutionary argument for the scientific study of the mind. He
posited that our every emotion—including the visceral panic that triggers a
"sell" order—is merely the result of a vast assembly of nerve cells
and their associated molecules.
Crick was obsessed with
how neurons communicate through "spiking." A neuron does not simply
pass along information; it waits until the stimulus reaches a critical
threshold, and then it fires a rapid, all-or-nothing electrical signal. Today’s
financial markets are essentially an externalized, global version of Crick’s
neural networks. For months, the market absorbed the "noise" of
regional tension in West Asia (Middle East). However, the recent escalation has
hit a biological threshold.
What the "pink
papers" call a "crash," Crick would have recognized as a neural
cascade. Interestingly, modern economists like David Reid and others have
recently pioneered the use of "Spiking Neural Networks" (SNNs)—models
directly inspired by Crick’s biological descriptions—to predict market
volatility. They found that market movements are not continuous; they are
"spiky." The BSE’s sudden fall is a synchronized firing of fear
neurons across millions of traders, a biological reflex to the pain of
uncertainty that no amount of rational economic policy can easily override.
Hardy, Keynes, and the
Bradman Class
This biological
volatility finds its mathematical counterpart in the work of G.H. Hardy. While
curating the “Cricket Connects: India – England” exhibition, I used Hardy’s
"Bradman Scale" to bridge the world of number theory and sport.
Hardy, the Cambridge Mathematician, who brought the genius of Srinivasa
Ramanujan to the world, famously ranked mathematicians by the standards of the
"Don and placed Ramanujan in this class, while placing himself far below.
Hardy’s memoir, A
Mathematician's Apology, is a manifesto for the "purity" of
mathematics, famously asserting that his work was "useless" for any
practical application like war. Yet, the irony is thick. His close friend, C.P.
Snow, noted that if Hardy had applied his genius for spotting patterns in
cricket scores to the stock market, he would have "minted a fortune."
Snow recalled that even
the legendary economist John Maynard Keynes—a contemporary and friend of
Hardy’s—had once remarked that Hardy’s unique ability to handle the
"Partition Theory" and the "Circle Method" was exactly what
the financial world needed. Partition theory, which Hardy and Ramanujan
developed to understand how numbers can be broken into components, is the
mathematical ancestor of modern Risk Partitioning and Portfolio
Diversification. While Hardy watched the cricket scoreboard with a feverish
intensity even when he was unwell, modern "Quants" now use his
Hardy-Littlewood Circle Method to calculate "asymptotic
distributions" in stock prices—essentially trying to find order within the
market’s chaos.
The Fallibility of
Prediction
The current crisis in
West Asia has forced a collision between these two worlds. The
"Crickian" biological panic has broken the "Hardy-esque"
mathematical models. Most newspapers in India have spent the last few days
trying to find "reason" in the crash, often to blame the Government.
But this assumes the market is a logical machine that can be
"managed."
Crick’s later work
showed that high-stress stimuli cause the brain’s "synapses" to
prioritize survival over long-term processing. Similarly, when Brent crude
nears $120, the market’s survival instinct takes over. Modern economists like Andrew Lo, with his
"Adaptive Markets Hypothesis," have since validated this, bridging
Crick’s biology with the market's behaviour—suggesting that competition,
mutation, and reproduction drive stock prices just as much as dividends do.
A Curatorial Perspective
on Loss
As a curator, one learns
that history is rarely a straight line; it is a series of connections. My
research into the Human Genome in 2003 showed me that even the most complex
biological systems have "fault lines." My work on the India-England
cricket connection showed me that even in sport, we seek mathematical
perfection in a Bradman or a Ramanujan.
Today, the Indian
investor is caught between these fault lines. We have built a financial system
on the "pure" mathematical dreams of Hardy, but it is populated by
the "astonishing" biological nerves described by Crick. The
staggering loss of lakhs of crores is a reminder that we are still far from
being the "masters" of our own economic destiny.
When the war rages in Middle
East, our sophisticated algorithms don't just fail; they "flinch."
Perhaps, instead of using the market as a political cudgel, we should view it
with the scientific temper that both Crick and Hardy championed—recognizing
that some systems, whether they are prime numbers, DNA strands, or the BSE
Sensex, possess a radical unpredictability that is as beautiful as it is
terrifying. We are, in the end, just a collection of nerves trying to make
sense of a world that refuses to be calculated.
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