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Article: Trade patterns predict financial earthquakes. (Stock Market).
- Article from:
- USA TODAY
- Article date:
- August 1, 2003
CopyrightCOPYRIGHT 2003 Society for the Advancement of Education. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The stock market has its share of shakeups, but who would guess that large movements in this man-made system adhere to a similar pattern of predictability as earthquake magnitudes? After analyzing four years of data from the world financial markets, an interdisciplinary team comprised of an economist at the Massachusetts Institute of Technology, Cambridge, Mass., and physicists from Boston (Mass.) University discovered that large-scale events in the stock market adhere to distinct patterns. They believe that market analysts could use these findings to predict--at least partially--the chance of a market crash.
"The frequency of crashes such as those in 1987 and ...