Chaos Researchers Say They Can Predict Market Bubbles

Some of the more recent dramatic disasters in world-wide markets have occurred, not because people panicked or an election did not go someone's way, but because financial institutions have taken to hiring physicists who wrote papers on predicting chaos. If non-linear is just linear in really small steps, then predicting and controlling nonlinearity is manageable. But those extreme chaotic events, the "dragon kings", have not obeyed numerical models yet. An upcoming paper in Physical Review Letters seeks to tame that savage chaotic breast again, with a simple model of chaos predicting that it is possible not only to predict an extreme event, like a stock market collapse, but to intervene and prevent it from happening. read more

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