Econophysicists Develop and Test "Bubble Index"

eldavojohn writes "Oh if only we could identify the bubble markets as they appear, but with all the random variables, it would take some sort of econophysicist to build predictions for that! Well, a team has released a definition of a 'bubble index' that led them to make predictions of bubbles six months ago that would pop between then and now. The four bubbles they selected were the IBOVESPA Index of 50 Brazilian stocks, a Merrill Lynch Corporate Bond Index, the spot price of gold, and cotton futures. Two out of the four were bubbles, with Merrill Lynch being a bubble already popping and cotton continuing to soar into even bubblier status. Still, for your first try, 50% isn't bad. The team learned a lot of new things from the first run, revised their method, selected their predictions for the next six months, and sealed them. Only time will tell if they are truly onto predicting crashes."

Comments

Re:Self-fulfilling prophecies

[PopeRatzo]

Does no-one see the problem here?

You mean the problem of "What the hell is an "econophysicist""? Who comes up with these disciplines, anyway?

I want to be an archaeobioeconolinguaphysicist when I grow up. That would be the study of, um, economical models of the language of microbes doing astrophysics. Or something.

or a anthrometeoreconomist.

Let's face it, if it has "econo" anywhere in the name of the discipline, it's about 2 levels softer than sociology. I don't know how many of you have had the pleasure of meeting economists, but if you have, I bet you agree that the notion of a Nobel Prize in Economics is about as silly as a Nobel Prize in Home Economics. What a scam.