LONDON: When John Coates was on a winning streak during his days as a trader at Deutsche Bank and Goldman Sachs, the narcotic-like high he experienced was so powerful he was determined to find out more. So after 13 years on trading floors on Wall Street he moved to the neuroscience labs of Rockefeller University in New York and of Britains Cambridge University. Here, the trader turned neuroscientist has been bent on uncovering the brain biology behind that high, what it did to him, and what its probably doing to those he left behind. What hes come up with, after several years reading up on animal studies and some interesting experiments with spit, is that risk taking is driven by a winner effect a hormonal mechanism in which each competitive victory leads to more wins. The narcotic high was as powerful as anything I have ever felt, Coates said in an interview during a medical conference in London, describing the experience of making huge profits and big bonuses at some of the worlds largest banks. And as other experts in psychiatry and neuroscience at the conference agreed, the consequences of a winner effect gone out of control can lead some to become power-corrupted politicians, cruel military dictators and even surgeons who like to play god. You become euphoric, delusional, you have less need for sleep, you have racing thoughts, an expanded appetite for risk, and less stringent requirements in the risk and reward trade-off, said Coates. Basically, you become a rogue trader. Since publishing some initial scientific studies exploring these traits in traders, Coates says he has been contacted by researchers analyzing politicians, soldiers, and even sports people who believe his work can shed light on theirs. As our research progressed, it became clear we were doing a lot more that studying the biology of financial risk taking, we were studying the biology of (all) risk taking, he said. We only have one biology, and we take it with us into whatever world were engaged in whether its the military, sports, politics or finance. With evidence of extreme consequences of the winner effect traders who turn rogue and bring down entire banks, political leaders corrupted by power who inflict cruelty on subordinates, or soldiers who become indiscriminate killing machines unchecked by the rules of conflict Coates is looking deeper. When you see this transformation take place in people, they start carrying themselves like masters of the universe. And its not a cognitive process. It isnt even about greed. Its more this feeling of consummate power, a feeling that youre dominating the world. Coates says he was increasingly struck by the fact that almost every blow-up north of a billion dollars the sort of blow-up that shakes a bank to its foundation came down to the actions of a trader at the end of a winning streak. The winning streak seems to foster excessive risk-taking, he said. Intrigued, and keen to bring his previous experience to his new role as a Cambridge research fellow in Neuroscience and Finance, Coates asked some of his former colleagues in Londons City financial district to give him some time, and some spit. Over eight consecutive business days, researchers took spit samples from 17 male traders, morning and afternoon, to measure levels of the hormone testosterone during daily trading. The results were revealing. Daily testosterone was significantly higher on days when traders made more than their one-month daily average. And on mornings when they had high testosterone levels, their profits for the rest of the day were significantly larger than when testosterone levels were low. These findings echo similar studies of animals in the wild, which also found a testosterone-driven winner effect among males who fight over territory or a mate, for example. According to Coates, they also show without doubt that risk taking in humans is a physiological and not just a cognitive activity. Within economics, theres a belief that we wander around with this supercomputer in our heads that is unaffected by the body and has the ability to calculate returns, probabilities and the optimum allocation of capital, he said. But of course the science doesnt support anything like that. Coates observations chimed with those of several other speakers at the conference, which gathered psychiatrists and neuroscientists to examine the phenomenon of hubris in public life in other words what leads people in power to become corrupted and behave in arrogant and destructive ways. Nassir Ghaemi, a professor of psychiatry at Tufts University Massachusetts, told the conference disorders like depression can often enhance political, economic and military leaders at times of crisis because depressives are more empathetic, more self critical and more realistic about the world around them. Coates suggests what goes wrong in the case of rogue traders is that the hormonal mechanism behind the winner effect becomes pathological, fostering irrational exuberance and excessive risk taking. He also said it is not enough for commentators and analysts to simply observe these activities, but argued that they should demand proper scientific studies which can provide robust answers to questions about what went wrong. What Im describing is overlooked scientific data, he told the conference. And what were seeing in the corporate world is a desperate need for science conducted in the workplace. Its going to help us understand the sources of the instability, and how to control it. Coates hypothesis is that at a certain level of rising testosterone, effective risk taking gradually turns into a biological wave of excessively risky behavior. If that is the case, it should change the way traders are managed, he said. The trouble with the banks is that their risk management systems and compensation schemes have been amplifying these biological waves, when they should be leaning against them. What they should be doing with traders on a winning streak is not forever raising their risk limits, but holding their limits constant, or even telling them to close out their positions in the middle of a winning streak and take three weeks off until their biology resets.

See the original post here:
Former Wall Street trader studies biology of risk-taking

A new breakthrough in cellular biology has revealed a biological fat switch that could help in the fight against the worldwide obesity epidemic, according to a study published by scientists at the Dana Farber Cancer Institute last week.

The switcha channel-shaped protein that sits in the outer membrane of human fat cellscan help prevent insulin resistance and obesity when it is blocked.

Senior author Bruce Spiegelman, a professor of cell biology at Harvard Medical School, said the implications of this research are far-extending.

The fact that there is a pathway [...]that is potentially druggable that controls these aspects of biology opens up a pretty clear possibility to develop therapeutics, he said.

According to co-author Jun Wu, an instructor at Dana Farber Cancer Institute, one-third of the worlds population suffers from obesity, but there are still no effective drugs in the United States capable of helping reduce metabolic rates.

In any animal, a high calorie diet can lead to obesity or insulin resistanceand commonly both. The diseases, especially when coupled, lead to greatly increased risk of coronary heart disease, type II diabetes and stroke.

The fat switch protein these scientists studied is predominately found in brown fat cellsa type of fat cell that is especially good at using chemical energy to generate and dissipate heat. This heat dissipation functions to prevent insulin resistance, distinguishing it as a good fat cell, according to Wu.

Through five years of experimentation, Spiegelman, Wu and their colleagues found that mice who had blocked fat switch proteins in their brown cells had an increase in their energy expenditure and decrease in insulin resistance compared to mice that did not have this block, even without putting the mice on a low-calorie diet.

Spiegelman said that the fat switch protein is from the same family of proteins as capsaicin, a protein that can be blocked by drugs to prevent the taste of spiceevidence that the fat switch could be manipulated to produce an effect in humans in a similar way.

The druggable potential for the fat switch, Spiegelman added, was one of the most exiciting finds of his work.

More:
Researchers Discover “Fat Switch”

Public release date: 11-Oct-2012 [ | E-mail | Share ]

Contact: Tom Vasich tmvasich@uci.edu 949-824-6455 University of California - Irvine

Irvine, Calif., Oct. 11, 2012 UC Irvine has been awarded $11.5 million over five years to further support the biologists, mathematicians, physicists, engineers and computer scientists who collaborate in pursuit of a more comprehensive and accurate understanding of complex biological systems.

The funding for the UCI Center for Complex Biological Systems comes from the National Institute of General Medical Sciences, one of the National Institutes of Health, which gave the facility initial grants of $450,000 in 2002 and $14.5 million in 2007.

At the time, the UCI center was the first of its kind in California dedicated to systems biology, an emerging field of study that employs the latest technology and computational methods to examine how networks of molecules, cells, tissues and organs interact in complex, dynamic ways to produce reliable biological functions.

"Over the past decade, we've tried to take a teamwork approach to really hard biological problems, encouraging researchers from all over the sciences and engineering to work together. This award is a clear endorsement of that strategy, especially given the current funding environment," said Dr. Arthur Lander, center director and professor of developmental & cell biology and biomedical engineering.

UCI's efforts focus on "spatial dynamics," or how biological systems have evolved to control what happens not just over time, but over space (in different locations within cells, tissues and organs, for instance). In researching this, the center takes advantage of the campus's considerable strengths in computation, applied mathematics and optical biology, in which microscopes, lasers and fluorescence are used to probe cells and tissues.

Additionally, the facility regularly hosts scientific seminars and symposia; offers short courses in systems biology; provides visiting scholar and research support; and administers undergraduate, graduate and postdoctoral training programs.

Founded in 2001, the center has helped UCI garner more than $36 million in federal and private aid for research, education and outreach by teams of biologists, mathematicians, physical scientists and engineers. It's currently one of 13 National Centers for Systems Biology funded by the NIGMS.

###

Go here to read the rest:
UCI garners $11.5 million in continued support of systems biology center