This is a weekly post by Nidhal Guessoum (see his earlier posts here). Nidhal is an astrophysicist and Professor of Physics at American University of Sharjah and is the author of Islam's Quantum Question: Reconciling Muslim Tradition and Modern Science.
We humans have a strong tendency to find correlations where oftentimes there are none, and to blame external factors for serious events when most of the time they are entirely human induced.
A few months ago, when the super earthquake and tsunami in Japan came within a week or so of a “super full moon”, the latter was almost predictably blamed in a number of news stories, and I wrote a newspaper column titled “Don’t blame the moon”. In it, I mentioned that the moon used to be thought of as the reason for a variety of things, ranging from severe weather to pregnancies, but nowadays only the full moon is cited as a principal reason for increases in crime rates (during those “white nights”) to tsunamis. I explained why this is all nonsense.
These days, however, it’s the sun’s turn to be blamed. Since we’ve had major drops and wild swings in stock markets worldwide as well as extreme weather across the globe, one could almost predict that the sun, with its increase in magnetic and flare activity, would be blamed. (And let’s not forget the riots in England.) And indeed, there are articles to that effect, including one on Reuters and one on the Arabic-BBC website, though in both pieces “various views” are presented, without a clear rejection of the solar-activity “theory”. A year ago, an Algerian pseudo-astronomer predicted that Ramadan would be tough because the upturn in solar activity would make temperatures significantly higher than usual…
What’s the story exactly? Well, we know that the sun undergoes a cycle of magnetic activity every 11 years or so, resulting in greater numbers (or very few) sunspots, solar flares, and prominences. The graph on the side shows the variation of the sunspot number since 2000, with the upturn in late 2009 and the expected activity over the next several years. To what extent this affects the earth’s climate is an important issue; the short answer is “not much”; and the solar cycle can even less be called upon to explain any local or regional increases in temperatures.
But then how would anyone cite this as an explanation for the stock market’s wild ride (mostly downward) of the past few weeks? Well, people noticed that in the past week or so, several strong solar “coronal mass ejections” occurred and “coincided” with the big drops in world markets. Secondly, people noted that just like the sun goes through cycles of activity, the market seems to go through similar phases, and moreover, there seems to be some “correlation”. These people, who tend to be smart, if scientifically and methodologically challenged, explained it as a solar psychological effect on investors. They cite a 2003 study by the Federal Reserve Bank of Atlanta that found that such storms could affect the stock market.
OK, that’s a testable hypothesis, so someone should check. Indeed, someone (Alexander Pakhalov of Moscow State University) recently published a study titled “The Influence of Solar Activity on the Investors' Behaviour in the Stock Markets”, in which he concluded that “based on the analysis of extensive historical data, connection between solar activity and the stock market was not found.” (OK, the source is an open-access repository of papers, not a bona fide refereed journal, and I am not an expert to vouch for this research, but it’s a statistical study, and it can be checked.)
Now, here below are graphs of both the sunspot number variation and the Dow Jones Industrial average for most of the last century, so you can take a look for yourself. Of course, we don’t do correlation studies in this “take a look” way, but it is often useful to see (by eye) what the data are showing before feeding them into statistical-analysis programs.
Last but not least, it is important to reflect on how we humans are quick to correlate phenomena and to believe that “we don’t know everything, so the connection is possible…” We humans evolved a capacity to notice patterns because that served us well in our long and difficult history, but we also have a tendency to overdo it, to see patterns where there are none and correlations that do not exist. As we scientists keep repeating, just because certain events occur at the same time or one after the other, does not mean they are related in some way, especially in a causal way. And because life is too difficult (for most people) already, it’s comforting to blame external factors, especially ones that we can do nothing about. It’s our “fate”, so let’s accept it, be strong, and move on.
But it is in fact only when we refuse to accept such reasoning that we make progress and truly move forward. We need to instill in our children and students the habit of asking for evidence, of questioning “received wisdom”, of searching for explanations that can be checked and confirmed. Anything else is superstition, irrational behavior, and just primitive thinking.