Skeptophilia (skep-to-fil-i-a) (n.) - the love of logical thought, skepticism, and thinking critically. Being an exploration of the applications of skeptical thinking to the world at large, with periodic excursions into linguistics, music, politics, cryptozoology, and why people keep seeing the face of Jesus on grilled cheese sandwiches.

Wednesday, September 26, 2012

The stars of Wall Street

Last week, Marketplace ran a story entitled, "Astrology Guides Some Financial Traders."  Thinking that the headline couldn't possibly mean what it seemed to mean, I read the article, and found that yes, in fact, it did.  The author, Heidi Moore, reports, in all apparent seriousness:
(T)he course of true investing never did run smooth, and there are some traders who look to the stars to tell them what to do. Financial astrologers like Karen Starich say traders know they're up against a lot of rich, smart people.

"They want to have that edge," she says. "They want to know what the future is."

Starich chargest $237 annually for her newsletter... (which contains) news of what will happen to the stock prices of companies, or even bigger, to the Federal Reserve.
So, we have the people who are responsible for managing investments, who are the heart and soul of the Stock Exchange, making their decisions based on... horoscopes?  Apparently, yes:
(Starich) sees dark times ahead in the Fed's horoscope.

"They now have Saturn squared to Neptune, which is really bankruptcy," Starich explains.
Neptune represents money. But when Saturn shows up in a chart, it indicates restriction. So for the Fed, that means the "fiscal cliff is here, and there’s no place to go except to print more money or unravel these financial institutions," Starich says.
But... but... really?  Are we talking about only one or two wingnuts, here?  The answer is no.  Three hundred Wall Street traders subscribe to Starich's newsletter; her rival, "financial astrologer" Arch Crawford, is even more successful, and has a newsletter that is delivered monthly to a readership of over 2,000.  Crawford is also predicting setbacks in the nation's finances, but not because "Saturn is squared to Neptune;" no, he says we're in for trouble "because Mercury is in retrograde:"
Crawford warns his 2,000 subscribers particularly against the dangers of Mercury in retrograde, a time when the planet appears to be going in reverse across the sky. The phenomenon, which happens three times or more a year, indicates a month when communications will be screwed up. He warns his subscribers never to start anything new during that time. He points to the fact that Knight Capital launched a new software program in August, when Mercury was in retrograde, and the brokerage firm nearly went out of business. He also notes that most major market glitches have happened while Mercury was in retrograde.
Can I just point out here that Mercury isn't really traveling backwards?  That it's just a sort of optical illusion based on the relative motion of Mercury and the Earth?  That there is no possible way it could have any effect on events anywhere?  That since it happens three or four times a year, for several weeks each time, that of course there will be times when "market glitches" occur during those periods?

That there is this thing called confirmation bias?

Crawford reports that some traders are cautious about letting people know they're making their decisions based upon the stars, and one even asked Crawford if he could have his newsletter delivered "wrapped in brown paper."  At least this is a hopeful sign; on some level, at least a few of these people are aware that what they're doing is ridiculous.

I don't honestly know what about this story appalls me more; that serious financial professionals are relying on astrology to make their decisions, or that a respected and credible media source published this article and treated its subject as if it were completely plausible, with only the weakest of caveats at the end that "...most people would say... (astrological predictions coming true are due to) coincidence."  What's next?  Tarot card readings by stock brokers?  Seances to consult deceased economists?  Sacrificing a goat to assure a good return on investments?

If so, I'm sure Marketplace will be the first to tell us all about how well it works.

Some days I just despair.

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