{
  "id": "cond-mat/0306496",
  "version": "v1",
  "published": "2003-06-19T09:55:50.000Z",
  "updated": "2003-06-19T09:55:50.000Z",
  "title": "Evidence of Fueling of the 2000 New Economy Bubble by Foreign Capital Inflow: Implications for the Future of the US Economy and its Stock Market",
  "authors": [
    "D. Sornette",
    "W. -X. Zhou"
  ],
  "comment": "41 Latex pages including 14 eps figures",
  "journal": "Physica A 332 (2004) 412-440",
  "doi": "10.1016/j.physa.2003.10.010",
  "categories": [
    "cond-mat.stat-mech",
    "q-fin.GN"
  ],
  "abstract": "Previous analyses of a large ensemble of stock markets have demonstrated that a log-periodic power law (LPPL) behavior of the prices constitutes a qualifying signature of speculative bubbles that often land with a crash. We detect such a LPPL signature in the foreign capital inflow during the bubble on the US markets culminating in March 2000. We detect a weak synchronization and lag with the NASDAQ 100 LPPL pattern. We propose to rationalize these observations by the existence of positive feedback loops between market-appreciation / increased-spending / increased-deficit-of-balance-of-payment / larger-foreign-surplus / increased-foreign-capital-inflows and so on. Our analysis suggests that foreign capital inflow have been following rather than causing the bubble. We then combine a macroeconomic analysis of feedback processes occurring between the economy and the stock market with a technical analysis of more than two hundred years of the DJIA to investigate possible scenarios for the future, three years after the end of the bubble and deep into a bearish regime. We also detect a LPPL accelerating bubble on the EURO against the US dollar and the Japanese Yen. In sum, our analyses is in line with our previous work on the LPPL ``anti-bubble'' representing the bearish market that started in 2000.",
  "revisions": [
    {
      "version": "v1",
      "updated": "2003-06-19T09:55:50.000Z"
    }
  ],
  "analyses": {
    "keywords": [
      "foreign capital inflow",
      "stock market",
      "economy bubble",
      "implications",
      "log-periodic power law"
    ],
    "tags": [
      "journal article"
    ],
    "note": {
      "typesetting": "LaTeX",
      "pages": 0,
      "language": "en",
      "license": "arXiv",
      "status": "editable"
    }
  }
}