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

[radtea]

you're thinking of the assholes that actually DO force their way in because they think they're too important to wait around.

He's almost certainly thinking of these people, and you are almost certainly one of them, as the odds of just happening to find a car-length gap in right lane in the scenario you describe without forcing your way in are sufficiently low that your suggestion that you can do it reliably is highly implausible.

The odds of you being an asshole are much, much higher.