Gee’s Reviews > Why Stock Markets Crash: Critical Events in Complex Financial Systems > Status Update
Gee
is 74% done
The causes of currency crises such as the 1997–98 Asian currency crises, can probably be
traced back to the interplay of countries’ structural imbalances and weak policies with shifts in market expectations, both amplifying each other to provide the principal source of instability. In other words, the crisis resulted from the interaction of structural weaknesses and volatile international capital markets
— Sep 06, 2022 04:00PM
traced back to the interplay of countries’ structural imbalances and weak policies with shifts in market expectations, both amplifying each other to provide the principal source of instability. In other words, the crisis resulted from the interaction of structural weaknesses and volatile international capital markets
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Gee’s Previous Updates
Gee
is 79% done
A HIERARCHY OF PREDICTION SCHEMES
The Simple Power Law
The “Linear” Log-Periodic Formula
The “Nonlinear” Log-Periodic Formula
The Shank’s Transformation on a Hierarchy of Characteristic Times
— Sep 06, 2022 04:13PM
The Simple Power Law
The “Linear” Log-Periodic Formula
The “Nonlinear” Log-Periodic Formula
The Shank’s Transformation on a Hierarchy of Characteristic Times
Gee
is 49% done
Objects with fractional dimensions turn out to
possess the property of scale invariance. To capture this novel concept, we already mentioned that the word “fractal” was coined by Mandelbrot, from the Latin root fractus to capture the rough, broken, and irregular characteristics of the objects presenting at least approximately the property of scale invariance. This roughness can be present at all scales
— Sep 05, 2022 06:47PM
possess the property of scale invariance. To capture this novel concept, we already mentioned that the word “fractal” was coined by Mandelbrot, from the Latin root fractus to capture the rough, broken, and irregular characteristics of the objects presenting at least approximately the property of scale invariance. This roughness can be present at all scales
Gee
is 36% done
Chaos has been widely popularized and has even been advocated by some as a useful description of stock markets. This, however, remains
too simplistic, as chaos theory relies on the assumption that only a few major variables interact nonlinearly and create complicated trajectories. In reality, the stock market needs many variables to obtain a reasonably accurate description
— Sep 05, 2022 06:18PM
too simplistic, as chaos theory relies on the assumption that only a few major variables interact nonlinearly and create complicated trajectories. In reality, the stock market needs many variables to obtain a reasonably accurate description
Gee
is 34% done
the emergence of bubbles is explained as a self-organizing process of “infection” among
traders, leading to equilibrium prices that deviate from fundamental values. Assuming that the speculators’ readiness to follow the crowd may
depend on an economic variable, such as actual returns, above-average returns are reflected in a generally more optimistic attitude
— Sep 05, 2022 10:43AM
traders, leading to equilibrium prices that deviate from fundamental values. Assuming that the speculators’ readiness to follow the crowd may
depend on an economic variable, such as actual returns, above-average returns are reflected in a generally more optimistic attitude
Gee
is 24% done
Beyond the rationale to imitate discussed before, justification for imitative tendencies can
be found in evolutionary psychology. The point is that humans are rarely at their best when they use rational reasoning. It can indeed be
demonstrated that “rational” decision-making methods are incapable of solving the natural adaptive problems our ancestors had to solve
reliably in order to survive and reproduce.
— Sep 04, 2022 06:12PM
be found in evolutionary psychology. The point is that humans are rarely at their best when they use rational reasoning. It can indeed be
demonstrated that “rational” decision-making methods are incapable of solving the natural adaptive problems our ancestors had to solve
reliably in order to survive and reproduce.
Gee
is 24% done
The urn model can be generalized by changing the rules of addition of the new balls; that
is, how many new investors come into play, how do they do so, and how do they imitate the existing players so as to include more complex nonlinear behaviors
— Sep 04, 2022 06:09PM
is, how many new investors come into play, how do they do so, and how do they imitate the existing players so as to include more complex nonlinear behaviors
Gee
is 24% done
Orléan has captured the paradox of combining rational and imitative behavior under
the name “mimetic rationality” (rationalité mimétique). He has developed models of mimetic contagion of investors in the stock markets that are based on irreversible processes of opinion forming. In the simplest version, called the Urn model.
— Sep 04, 2022 06:09PM
the name “mimetic rationality” (rationalité mimétique). He has developed models of mimetic contagion of investors in the stock markets that are based on irreversible processes of opinion forming. In the simplest version, called the Urn model.
Gee
is 18% done
About half of the time series show outliers for the drawups. The drawups are thus different
statistically from the drawdowns and constitute a less conspicuous structure of financial markets For companies, large drawups of more than 15% occur approximately twice as often as large drawdowns of similar amplitudes
— Sep 04, 2022 05:33PM
statistically from the drawdowns and constitute a less conspicuous structure of financial markets For companies, large drawups of more than 15% occur approximately twice as often as large drawdowns of similar amplitudes
