This paper appeared in the journal Technological Forecasting & Social Change:
Sunspots, GDP and the stock market (View paper PDF)
by: Theodore Modis
Abstract
A correlation has been observed between the US GDP and the number of sunspots as well as between the Dow Jones Industrial Average and the number of sunspots. The data cover 80 years of history. The observed correlations permit forecasts for the GDP and for the stock market in America with a future horizon of 10 years. Both being above their long-term trend they are forecasted to go over a peak around Jun-2008.
The paper concludes:
…..If one accepts that there must be some correlation between GDP growth and stock-market growth as displayed in Fig. 5, then one cannot use the lack of scientific proof as an argument against the existence of correlation between the stock market and sunspots (Fig. 2), or between GDP and sunspots (Fig. 4). On the other hand, if these correlations are real, then we can venture long-range forecasts for the DJIA and the GDP….
….The levels forecasted here for the DJIA of 13908 in mid 2008 and 7919 in early 2014….
While there may be some correlation between sunspots and the DJIA and GDP, there’s also much larger drivers, such as panic and bad loans in the banking industry. Sir William Herschel discovered a correlation between wheat prices and sunspots. In 1801 he published two papers that, in part because of Herschel’s reputation as England’s “Kings Astronmer”, effectively launched the field of solar influences on Earth’s weather. It is in the first of these papers that Herschel discusses an anticorrelation between the price of wheat and the number of sunspots visible on the Sun.
So, I suppose DJIA/GDP links aren’t that far fetched. I remember well when Carl Sagan said in his famous 1980’s PBS special COSMOS that “we are all made of star-stuff”. Thus is doesn’t seem that unplausible that the ebb and flow of our existence continues to be linked to our nearest star.
h/t to Paul Biggs
“Autism prevalence rates for school-aged children in California, Oregon and Washington in 2005 were positively related to the amount of precipitation these counties received from 1987 through 2001,”
http://www.reuters.com/article/healthNews/idUSTRE4A34WG20081104
Global warming causes increased rainfall. Increased rainfall causes autism. The logical conclusion being that autism and other mental incapacities cause people to vote for candidates who promise to reduce CO2 by 80%.
Mark (07:03:54) :
I bet Leif will have a comment or two on this…
Arthur Glass (07:15:56) :
I hope Leif Svalgaard shares his thoughts on this, although I can readily imagine his reaction.
Pierre Gosselin (08:03:34) :
If Leif comments on this, then it means he has lots of idle time on his hands.
I don’t have much time right now 🙂
I do get regularly emails from persons that want my latest and greatest solar data because they are contemplating some investments. Perhaps I should ask for their help instead in predicting solar activity…
We don’t need more sunspots. We need more cowbell.
We gotta have more cowbell!
Rebuttal to O’Bama’s “cap-and trade” to bankrupt the coal industry and to “skyrocket” energy prices. Use incentives instead of “tax-and-destroy.”
Newt still in the “carbon” camp.
Newt on incentives versus punitive fines
It appears that the responses to this are negative, to say the least. But it interested me because I have a book called “Sunspots and their Effects”, published in 1937 by McGraw Hill. The author was Harlan T. Stetson, of MIT. It details the correlation of sunspot variations on the DJ during the Depression, as well as correlations with other phenomena, including weather, mass human behavior, vintage wine quality, tree ring growth, etc. If sunspot activity affects tree ring growth, how can the latter be used to measure past temperatures? The author describes how they measured the total heat input from the sun 70 years ago (avge. 1.94 Calories per square centimeter), and the ultraviolet content of the sunshine. Charles G. Abbott, then of the Smithsonian Institute, claimed that the variation in solar heat was as much as 4%!
Hi from France !
It seems that T. Modis ignores the results published in Nature (2 papers) by the renowned English economist and logician, William Stanley Jevons. Jevons found a rather similar correlation. He used “Herschellian” arguments:
“In 1875 and 1878, Jevons read two papers before the British Association which expounded his famous “sunspot theory” of the business cycle. Digging through mountains of statistics of economic and meteorological data, Jevons argued that there was a connection between the timing of commercial crises and the solar cycle. The basic chain of events was that variations in sunspots affect the power of the sun’s rays, influencing the bountifulness of harvests and thus the price of corn which, in turn, affected business confidence and gave rise to commercial crises. Jevons changed his story several times (e.g. he replaced his European harvest-price-crisis logic with an Indian harvest-imports-crisis channel). ”
ref : http://cepa.newschool.edu/het/profiles/jevons.htm
The climate sunspot connection does this? Let’s see:
Magnus theorem.
After a period of good harvests the agricultural business declines. Wealthy young cowboy’s moves into the cities where they spend their money which flowes into the stock market.
But soon the cowboys are poor again, and when a natural reaction to every boosted market, a decline, sets in. The boys are forced to move back to their farms which starts to flourish under a steadily brighter sun.
And so on.
Oh oh… so this is all in fun…. but, if the sun stays spotless and we enter a Dalton or Maunder Minimum will the stock market tank? Hehe… just kidding 😉
I’m sure that anybody calculating the same-time correlation coefficient between these two will find they’re not correlated.
Thanks Anthony,
I know it is meant as a joke, but
if the earth is more productive when hotter
then the lag of the djia is correctly hi
after the fact. the ups and downs that do not correspond
to spots is just noise.
I believe that everything has a cycle to it of one form or another.
when these cycles come together can be fantastic or horrendous.
going down to bus stop to get three year old off from the bus. LOL
I believe it was H.G.Wells made the ‘star stuff’ observation.
REPLY: Yes originally, but Sagan repeated it. – Anthony
The DJI would seem to be contradictory to classical economics and solar climate driven change. During warm periods the price of agricultural products fall as land becomes more productive. As the population grows so does the need for mineral resources in the form of metals and timber to take advantage of the new conditions. When the warm period ends so we get the reverse, High food prices as less land becomes arable. With the diminishing food resource comes social conflict leading to wars. Plows are turned swords and the abundant mineral resources become less important as the population plummets.
These periods are known the dark ages.
speaking of SunSpots. The current Sunspot started as a Cycle 24. Looking at its present state, is it possible for a Cycle 24 to split into a Cycle 24 & Cycle 23 spot?
http://sohowww.nascom.nasa.gov/data/realtime/mdi_mag/1024/latest.html
It’s the Bilderburgers, I tell you!! They truly ARE the masters of the universe!
/sarc
I can finally add something to the conversation, since I’m only a learner here, not one of the smart ones here. Great site, great commenters here too. I’ve learned a lot in the last year or so I’ve been coming here.
Roy (07:30:02) :
Oh puh-lease! What unrelieved tosh. This baloney resurfaces at regular intervals.
But do these intervals correspond with sunspot numbers?
If this is an argument about whether society is affected by weather, you’ll get no argument out of me. Mood, confidence, outlook, dispostion any way you slice it.
REPLY: Well, its not my total argument, just some light reading on day filled with contradictions, uncertainty, and predictions. – Anthony
Leif can’t reply now. He is speculating on stock markets like crazy.
@Mike
Roy (07:30:02) :
Oh puh-lease! What unrelieved tosh. This baloney resurfaces at regular intervals.
But do these intervals correspond with sunspot numbers?
LOL.
This surfaces along with the NFC/AFC Superbowl winners and the Stock Market. I wonder if we should carry the NFC wins and the market finishes up correlation through to sunspots and solar cycles?
RE: AEGeneral (09:17:22)
LOL!
If this works, All solar scientists should become millionairs shortly.
Hmmmm — and if the Livingston & Penn prediction is valid then I guess we can expect the DJI to really tank along with the economy. See, the sun really does have an effect, just not on the weather. Next thing you know we’ll get a new cabinet position — Dept. of Astrology — to guide economic decision making.
Bill Marsh (10:43:18) :
The current Sunspot started as a Cycle 24. Looking at its present state, is it possible for a Cycle 24 to split into a Cycle 24 & Cycle 23 spot?
No, once a SC24, it will stay a SC24. It is quite common for the spots within a group [or were there actually two close SC24 groups] to move around a bit, messing up the cycle signature.
As we know from the Livingston/Penn paper, we will run into the next Maunder minimum in 2015, right after the end of the second term of the new president. The seventy year Maunder minimum will then correspond to a depression of 70 years, no more ups and downs of the Dow Jones, just downs. Thus it will be the next president who will lead the people away from the fleshpots of Egypt, away from the fleshpots of evil, into 70 years of hardship where the people will be cleansed of all sins. After those 70 years, the people will find the land where milk and honey flows. Amen.
Very funny:
Of course: this model can be completed.
Aries, Taurus, Gemini, Cancer, Leo, Virgo, Libra,
Scorpius, Ophiuchus, Sagittarius, Capricornus and Aquarius.
A small adjustment;
Mercury, Venus, Earth, Mars, Jupiter, Saturn, Uranus, Neptune, and Pluto;
Another adjustment:
Pluto … is a planet?
And the Moon?
Leif Svalgaard (09:09:34) :
“I do get regularly emails from persons that want my latest and greatest solar data because they are contemplating some investments. Perhaps I should ask for their help instead in predicting solar activity…”
Leif, you should ask for a small return on any profits, a bit like one of one of those ‘no win no fee’ lawyers 😉
Of course it is those who come back for a second hit of data that are the interesting ones.