Men have endlessly enjoyed making nasty remarks about women’s hormonal cycles. But a recently published study concludes that male traders are to blame for stock market bubbles and their subsequent crashes. The findings published in Proceedings of the National Academy of Sciences recommend that “you could stabilize financial markets by hiring more women and older men.”
Cambridge University researchers Joe Herbert and John Coates (who in his prior career ran Deutsche Bank’s New York trading desk), studied the testosterone levels of 17 London traders for eight consecutive business days. As Coates writes in a Financial Times article, "the higher a trader’s morning testosterone, the more money he made that day. This effect was most pronounced in experienced traders."
From the study, Coates associated elevated testosterone with creating a "positive feedback loop" that increases confidence and the risk-taking that leads to market bubbles. The FT reports that a trader sued the hedge fund he was working for last October for allegedly forcing him to take female hormones to moderate his aggressive behavior.
Higher levels of the stress hormone cortisol (especially in experienced traders), "correlated with higher levels of implied volatility in the options market." Coates believes that in the current financial climate, "traders exposed for months now to the noxious effects of cortisol, may end up in a psychological state known as ‘learnt helplessness’. As a result they may become price insensitive, blunting the instruments of monetary policy."
Coates advocates neuroscience and endocrinology to help economists develop a more accurate model of risk. The endocrine glands of the body come under the overall rulership of Mars, the planetary energy of action and aggression. While the energies of Mars and the Sun (ego/identity) strongly relate to men, these energies are just as important in women’s horoscopes.
The energies of Venus and the Moon particularly resonate with women, but likewise are important in men’s horoscopes. The Moon and the relationships it forms to other planets, most strongly represents the current emotional barometer. Venus rules banking and asset values, so as a broad generalization, women could generate more profits because they might be better equipped to judge current and future value of a financial instrument. As a woman, I absolutely agree with the study’s suggestion of hiring more women traders to balance out of control male energies. However, it is important that both sexes balance the male and female energies of their horoscopes.
If you want to better stabilize the markets, the best way is to look at past and future long term cycles of the planets Jupiter through Pluto. As I’ve written so many times, the government, and especially the Federal Reserve, needs to understand these planetary cycles to chart the appropriate course of economic and monetary policy.
What I find encouraging about this study is that science is really coming around to examining more esoteric factors they would previously dismiss as being without merit to warrant investigation. I am firmly convinced that science will prove the “as above, so below” principle once and for all in the not too distant future.
Related Post: “Stocks Lost Decade from a Planetary Perspective”
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