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Crashes : symptoms, diagnoses and remedies

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  • M. Ausloos
  • K. Ivanova
  • N. Vandewalle

Abstract

A brief historical perspective is first given concerning financial crashes, - from the 17th till the 20th century. In modern times, it seems that log periodic oscillations are found before crashes in several financial indices. The same is found in sand pile avalanches on Sierpinski gaskets. A discussion pertains to the after shock period with illustrations from the DAX index. The factual financial observations and the laboratory ones allow us some conjecture on symptoms and remedies for discussing financial crashes along econophysics lines.

Suggested Citation

  • M. Ausloos & K. Ivanova & N. Vandewalle, 2001. "Crashes : symptoms, diagnoses and remedies," Papers cond-mat/0104127, arXiv.org, revised Apr 2001.
  • Handle: RePEc:arx:papers:cond-mat/0104127
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    References listed on IDEAS

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    1. Ausloos, Marcel & Vandewalle, N. & Ivanova, K., 2000. "Time is money," MPRA Paper 28703, University Library of Munich, Germany.
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    5. Laurent Laloux & Marc Potters & Rama Cont & Jean-Pierre Aguilar & Jean-Philippe Bouchaud, 1998. "Are Financial Crashes Predictable?," Papers cond-mat/9804111, arXiv.org.
    6. Jean-Philippe Bouchaud & Rama Cont, 1998. "A Langevin approach to stock market fluctuations and crashes," Science & Finance (CFM) working paper archive 500027, Science & Finance, Capital Fund Management.
    7. A. Johansen & D. Sornette, 1999. "Financial ``Anti-Bubbles'': Log-Periodicity in Gold and Nikkei collapses," Papers cond-mat/9901268, arXiv.org.
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    9. Daerden, Frank & Vanderzande, Carlo, 1998. "Sandpiles on a Sierpinski gasket," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 256(3), pages 533-546.
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    11. Ross Macdonald, J. & Ausloos, M., 1997. "Analysis of TbZn resistivity temperature derivative above the Curie point using singular fitting equations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 242(1), pages 150-160.
    12. Kaizoji, Taisei, 2000. "Speculative bubbles and crashes in stock markets: an interacting-agent model of speculative activity," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 287(3), pages 493-506.
    13. D'Hulst, R. & Rodgers, G.J., 2000. "Democracy versus dictatorship in self-organized models of financial markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 280(3), pages 554-565.
    14. Vandewalle, N. & Boveroux, Ph. & Minguet, A. & Ausloos, M., 1998. "The crash of October 1987 seen as a phase transition: amplitude and universality," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 255(1), pages 201-210.
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    Cited by:

    1. Czarnecki, Łukasz & Grech, Dariusz & Pamuła, Grzegorz, 2008. "Comparison study of global and local approaches describing critical phenomena on the Polish stock exchange market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(27), pages 6801-6811.
    2. Marcel Ausloos, 2014. "A biased view of a few possible components when reflecting on the present decade financial and economic crisis," Papers 1412.0127, arXiv.org.
    3. Cajueiro, Daniel O. & Tabak, Benjamin M. & Werneck, Filipe K., 2009. "Can we predict crashes? The case of the Brazilian stock market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 388(8), pages 1603-1609.
    4. Marcel Ausloos, 2012. "Econophysics in Belgium. The first (?) 15 years," Papers 1212.1946, arXiv.org.

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