Those years with Deutsche Bank would be highly profitable for
both parties. Although the data involved financial stocks rather than
fish stocks, Sugihara’s experience with predictive models successfully
transferred across to his new field. ‘Basically, I modelled the fear and
greed of mobs that trade,’ he later told Nature.[13]
Another person to join the Federal Reserve discussions was
Robert May, who had previously supervised Sugihara’s PhD. An
ecologist by training, May had worked extensively on analysis of
infectious diseases. Although May was drawn into financial research
largely by accident, he would go on to publish several studies looking
at contagion in financial markets. In a 2013 piece for The Lancet
medical journal, he noted the apparent similarity between disease
outbreaks and financial bubbles. ‘The recent rise in financial assets
and the subsequent crash have rather precisely the same shape as
the typical rise and fall of cases in an outbreak of measles or other
infection,’ he wrote. May pointed out that when an infectious disease
epidemic rises it’s bad news, and when it falls, it’s good news. In
contrast, it’s generally seen as positive when financial prices rise and
bad when they fall. But he argued that this is a false distinction: rising
prices are not always a good sign. ‘When something is going up
without a convincing explanation about why it’s going up, that really is
an illustration of the foolishness of the people,’ as he put it.[14]
One of the best-known historical bubbles is ‘tulip mania’, which
gripped the Netherlands in the 1630s. In popular culture, it’s a classic
story of financial madness. Rich and poor alike poured more and
more money into the flowers, to the point where tulip bulbs were
going for the price of houses. One sailor who mistook a bulb for a
tasty onion ended up in jail. Legend has it that when the market
crashed in 1637, the economy suffered and some people drowned
themselves in canals.[15] Yet according to Anne Goldgar at Kings
College London, there wasn’t really that much of a bulb bubble. She
couldn’t find a record of anybody who was ruined by the crash. Only a
handful of wealthy people splashed out for the most expensive tulips.
The economy was unharmed. Nobody drowned.[16]
Other bubbles have had a much larger impact. The first time that
people used the word ‘bubble’ to describe overinflated investments