I am currently in the Scottish Highlands for ten days or so, and my outings on the hills have made me reflect on extreme events. The fact that they lie so much outside the perceptions which people have about the world makes it very hard to appreciate that they occur at all. I’ve just finished reading Gillian Tett’s account of the financial crisis, Fool’s Gold.
As I plod up and down the soggy hillsides – it has rained almost all week – I have reflected on the similarities of extreme events in financial markets and extraordinary feats of hill running. These almost literally defy belief.
For example, on the Isle of Skye lies the most rugged set of peaks in Britain, the Cullins. The Cullin Ridge is probably the single most demanding outing in the British hills. It is only 10 miles or so in length. It involves 10,000 (ten thousand) feet of ascent and descent. But the most demanding aspect of it is that there are several rock climbs up to Very Difficult/Severe standard, prolonged bouts of exposed scrambling, and hardly any flat terrain at all. Over much of the length of the Ridge, a slip could prove fatal. Now, on firm, broad tracks which involved simply putting one foot in front of the other, a strong walker would be pleased to cover such a route in 8 hours. Most casual hill walkers could not even contemplate an outing of this kind.
Yet, incredibly, the record time for the Cullin Ridge is 3 hours 29 minutes, with no climbing aids used at all. One of the peaks involved symbolises the difficulties. The Inaccessible Pinnacle is a bizarre fin of rock attached to the ridge. A rock climb is needed to gain its sloping ridge, which is for the most part about six inches wide. As you climb, you are faced with exposure such that, in a popular description, there is a vertical drop on one side and an overhanging and infinite drop on the other! Certain death awaits anyone who falls unroped. At the summit, there is a Difficult 75 foot down-climb required to get off the peak. Elite Ridge runners go up and down this peak in under four minutes – four minutes!
There are ultra-marathon hill challenges such as the Bob Graham Round in the English Lake District, for example. This is 72 miles long with 26,000 – twenty six thousand – feet of ascent and descent. Seventy two miles is almost a triple marathon. The record time is 13 hours 54 minutes.
Now, without knowledge of these feats, someone familiar with the terrain involved would find it almost impossible to imagine that such times could be achieved. They are so far outside ‘normal’ perceptions.
Humans seem to find it hard to imagine extreme events in general. With much more dramatic consequences for us all, the same inability to contemplate the existence of extreme events occurred in financial markets, traders, senior bank management, regulators, central banks. We were very well equipped to withstand a ‘normal’ shock. But not the extreme event which actually took place.