TEDxZurich - Tobias Preis - Bubble Trouble http://www.youtube.com/watch?v=fJWi_6s10nw When a stock market rises unsustainably, it can create a financial bubble that sooner or later will burst. Dr. Tobias Preis explains whether concepts from physics can be used to create a law describing exactly how such crashes occur.
I am glad to see this. I kind of suspected it, with that much computing power there is no why it should not. Human behavior drives it predict it and profit. They do have some good tools if you can interpret them. Convergence of raw econmic data, social networks and other metrics should give the system a good picture of what is really going on. What is done afterwards is another question. Welcome to Planet Misery, Akuma
There is also a related publication: http://rsta.royalsocietypublishing.org/content/368/1933/5707 "Complex dynamics of our economic life on different scales: insights from search engine query data"
Yeah, I've always thought using Google Trends could predict certain events. However, I think it really depends on what you are trying to predict. For example, looking at his graph depicting the increase in searches for "Lehman Brothers" it still seems like that was a lagging indicator. I highly doubt that searches increased before trouble about Lehman broke out. It was more likely an after the fact occurrence. Lagging indicators are nice, but leading indicators are better. However, I do feel that Google Trends could be used as a leading indicator as long as you know where and how to look. I have an idea, but unfortunately Google Trends doesn't break down the information to the level I need.
The same researcher co-authored a "Scientific Reports" paper which was published last week: "Internet users from countries with a higher per capita gross domestic product (GDP) are more likely to search for information about years in the future than years in the past, a quantitative analysis of Google search queries indicates. The findings, published in the journal Scientific Reports, suggest there may be a link between online behaviour and real-world economic indicators. As use of the Internet and other technological systems grows, increasingly large amounts of data are being generated, the empirical analysis of which can provide insights into real-world social phenomena, from influenza epidemics to stock market trading volumes. Tobias Preis, Helen Susannah Moat, H. Eugene Stanley and Steven R. Bishop examined Google search queries made by Internet users in 45 different countries in 2010 and calculated the ratio of the volume of searches for the coming year (â2011â) to the volume of searches for the previous year (â2009â), which they call the âfuture orientation indexâ. They compared the future orientation index to the per capita GDP of each country and found a strong tendency for countries in which Google users enquire more about the future to exhibit a higher GDP. The results hint that there may potentially be a relationship between the economic success of a country and the information-seeking behaviour of its citizens online." http://www.nature.com/srep/2012/120405/srep00350/full/srep00350.html
I have a primitive question on the options of today (Fri.). Goog dropped $26. The Options Call prices reflect that, they dropped $27 or more, but the Options Put prices does not. The put option on the 650 strike price, only go up $5.6, why?