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The same sharp accelerations at around 1982 and 1994 are discernible. Only the 2007 peak looks less ridiculous.
Here is the logarithmic plot:
Anyway, looking at that S&P series I can't help but marvel at the succession of bubbles from 1950 to 1975, and I am reminded of my
Big bubbles have little bubbles which feed on their liquidity and little bubbles have lesser bubbles and so on to volatility. And the greater bubbles have themselves even greater bubbles to ride on; while these again have greater still and greater still, 'till meltdown.
You should make a song borrowing the music from Pete Seeger's "Little Boxes":
"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
The graphs are pretty parallel. SP grew even faster before 1987.
Post dot-com crash, the engineering becomes blatant: DJIA hung near flat when S&P crashed (they both had a dip on 9/11 though, you can't rebalance the index faster than airplanes crashing). And when S&P picked up, it just returned to dot-com bubble level. DJIA actually went higher ! Pierre
In this crisis, many people need more money, but a lot of money are wondering without a purpose. Somehow the financial system is not moving money from points A where it is to points B where it is needed (contrary to what one Rothschild likes to say). Instead, aimless money is making problems of its own.
http://en.wikipedia.org/wiki/Historical_components_of_the_Dow_Jones_Industrial_Average
Updates in 1939, 56, 59, 76: it sucks... Then 3 updates in the 80's, 3 in the 90's And of course, already 5 updates in this decades, and counting...
In the 80-90, all stocks were free-riding the secular trend of retirement funds going for a gambit. But in most cases, their target benchmark was very broad, at least S&P500 or Russell2000 Pierre
Kolmogorov bubbles
I don't see much difference
NewScientist.com: ... a team of physicists and financiers [successfully predicted] a steep fall in the Shanghai Stock Exchange. Their model, which employs concepts from the physics of complex atomic systems, was developed by Didier Sornette of the Financial Crisis Observatory in Zurich, Switzerland, and Wei-Xing Zhou of the East China University of Science and Technology in Shanghai. The idea is that if a plot of the logarithm of the market's value over time deviates upwards from a straight line, it's a clear warning that people are investing simply because the market is rising rather than paying heed to the intrinsic worth of companies. By projecting the trend, the team can predict when growth will become unsustainable and the market will crash. Sornette, Zhou and colleagues applied their model to the Shanghai Composite Index, which tracks the combined worth of all companies listed on the Shanghai Stock Exchange, the world's second largest. Early this year, the index gained 50 per cent in just four months. In July, the team predicted that the index would start to fall sharply by 10 August (www.arxiv.org/abs/0907.1827). The index duly began to slide on 4 August, falling almost 20 per cent in the subsequent two weeks.
... a team of physicists and financiers [successfully predicted] a steep fall in the Shanghai Stock Exchange.
Their model, which employs concepts from the physics of complex atomic systems, was developed by Didier Sornette of the Financial Crisis Observatory in Zurich, Switzerland, and Wei-Xing Zhou of the East China University of Science and Technology in Shanghai. The idea is that if a plot of the logarithm of the market's value over time deviates upwards from a straight line, it's a clear warning that people are investing simply because the market is rising rather than paying heed to the intrinsic worth of companies. By projecting the trend, the team can predict when growth will become unsustainable and the market will crash.
Sornette, Zhou and colleagues applied their model to the Shanghai Composite Index, which tracks the combined worth of all companies listed on the Shanghai Stock Exchange, the world's second largest. Early this year, the index gained 50 per cent in just four months. In July, the team predicted that the index would start to fall sharply by 10 August (www.arxiv.org/abs/0907.1827). The index duly began to slide on 4 August, falling almost 20 per cent in the subsequent two weeks.
Now "everyone" is predicting even more.
Shanghai Index May Drop 25% on Economy - Bloomberg.com The Shanghai Composite Index, the world's worst performer in August, may fall another 25 percent as China's economic recovery isn't "sustainable," former Morgan Stanley Asian economist Andy Xie said. The measure plunged 6.7 percent to 2,667.75 yesterday, the most since June 2008, and entered a bear market on concern a slower lending growth may derail a rebound in the world's third- largest economy. Xie said the index "should be 2000 or less." The gauge rose 0.6 percent to 2,683.72 today. "The market is in deep bubble territory," Xie, 49, who correctly predicted in April 2007 that China's equities would tumble, said in an interview with Bloomberg Television.
The Shanghai Composite Index, the world's worst performer in August, may fall another 25 percent as China's economic recovery isn't "sustainable," former Morgan Stanley Asian economist Andy Xie said.
The measure plunged 6.7 percent to 2,667.75 yesterday, the most since June 2008, and entered a bear market on concern a slower lending growth may derail a rebound in the world's third- largest economy. Xie said the index "should be 2000 or less." The gauge rose 0.6 percent to 2,683.72 today.
"The market is in deep bubble territory," Xie, 49, who correctly predicted in April 2007 that China's equities would tumble, said in an interview with Bloomberg Television.
They're in for a rude shock in the 21st century...
- Jake Friends come and go. Enemies accumulate.
The idea is that if a plot of the logarithm of the market's value over time deviates upwards from a straight line, it's a clear warning that people are investing simply because the market is rising rather than paying heed to the intrinsic worth of companies.
They have to be doing something more than just that if das monde:
In July, the team predicted that the index would start to fall sharply by 10 August (www.arxiv.org/abs/0907.1827). The index duly began to slide on 4 August, falling almost 20 per cent in the subsequent two weeks.
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