The Un-real Deal: Financial Fiction, Fictional Finance, and the Financial Crisis

Abstract

The credit crisis of - prompted a Manichean discourse that labeled finance the flighty and unreal other of the solidity of the real economy. Almost overnight the "speculative finance" shifted from a descriptive term to an evaluative one, with freewheeling finance singled out as the main cause of the crisis. The fictionality of finance is, of course, a fiction itself. Not only is finance a part of the real economy but since the s it has played an increasingly significant part in it. This essay aligns with recent work in critical finance studies that puts pressure on the idea that finance can be separated from the real economy. Supplementing the world-historical scale at which this work often remains, this essay theorizes the real abstraction of finance through its lived social experience. The year  was replete with financial events: the end of the Bretton Woods agreement and the gold standard, the Middle East oil crisis, the creation of the Chicago options exchange, and the invention of the Black-Scholes equation governing derivatives. It also saw the birth of the financial thriller with Paul Erdman's The Billion Dollar Sure Thing. Seizing upon a formulaic genre and opening it up to a flood of real events from the trading floor, the financial thriller acts as a dynamic interface and sensitive seismograph for theorizing the fictionality of finance. This essay opens with a reading of Bret Easton Ellis's American Psycho () as an example of a work that renders real abstraction in an explicitly social way. Rather than viewing the novel as a hyperbolically postmodern reflection of abstract financial maneuvers, I argue that it is thickly embedded within the historically specific financial cityscape of s Manhattan. I then turn to a comparative reading of recent financial thrillers written in response to the twenty-first-century credit collapse. Unlike Ellis's novel, these thrillers strive to keep the unreality of finance segregated from the real economy at the level of plot, while also making use of generic strategies to do so at the level of form, pushing financial data into footnotes, descriptive asides, and a different tonal register of narrative. By reading these thrillers alongside American Psycho, a book written before the shock of terminal economic crisis, I offer a more historically nuanced reading of their attempts to salvage a workable economy out of the mess of the twenty-first-century American economy.A  salon.com article on the collapse of Wall Street helpfully explained that, "strictly speaking, a derivative is a financial doohickey … Derivatives belong to what should be calledbut never isthe unreal economy."  This Program in Comparative Literature and Literary Theory, University of Pennsylvania.

“Financialization” of public discourse: the case of AIG

“…recovery) spread over a relatively short time span. Primarily, inter-temporal risk management aims for reducing the impact on individual welfare from aggregate risks by averaging the risk over time (Allen and Gale, 1997) by enabling individuals/organizations to spread the risk between their present and future selves [1]. Let us demonstrate this point with a hypothetical example.…”