A paper written by economists from the Trinity College Dublin (TCD) and University College Dublin (UCD) looked at the changes in the incidence frequency of English words that maybe helpful in pinpointing stock market bubbles. They looked at thousands of articles from the Financial Times and New York Times and the BBC that were published over a four-year period from 2006. They basically found the following:
* When markets conditions were buoyant certain common nouns and verbs like rise, fall, close and gain become more common still.
* When markets were more depressed there is a loss of this commonality of nouns and verbs and as the authors stated “Maybe it’s a bit like happy families are all happy in the same way, but unhappy families are unhappy in many different ways.” A run-up in markets focuses on a few companies, indices and events, in other words; a crash sends waves of disparate, dismal stories through the economy. Perhaps. Or it may just be that when the consensus fractures, language does, too. The Economist