From Rational Bubbles to Crashes

We study and generalize in various ways the model of rational expectation (RE) bubbles introduced by Blanchard and Watson in the economic literature. First, bubbles are argued to be the equivalent of Goldstone modes of the fundamental rational pricing equation, associated with the symmetry-breaking introduced by non-vanishing dividends. Generalizing bubbles in terms of multiplicative stochastic maps, we summarize the result of Lux and Sornette that the no-arbitrage condition imposes that the tail of the return distribution is hyperbolic with an exponent mu<1. We then extend the RE bubble model to arbitrary dimensions d and, with the renewal theory for products of random matrices applied to stochastic recurrence equations, we extend the theorem of Lux and Sornette to demonstrate that the tails of the unconditional distributions follow power laws, with the same asymptotic tail exponent mu<1 for all assets. Two extensions (the crash hazard rate model and the non-stationary growth rate model) of the RE bubble model provide ways of reconciliation with the stylized facts of financial data. The later model allows for an understanding of the breakdown of the fundamental valuation formula as deeply associated with a spontaneous breaking of the price symmetry. Its implementation for multi-dimensional bubbles explains why the tail index mu seems to be the same for any group af assets as observed empirically. This work begs for the introduction of a generalized field theory which would be able to capture the spontaneous breaking of symmetry, recover the fundamental valuation formula in the normal economic case and extend it to the still unexplored regime where the economic growth rate is larger than the discount growth rate.Comment: Latex 27 pages with 3 eps figur

Critical change in the Fermi surface of iron arsenic superconductors at the onset of superconductivity

The phase diagram of a correlated material is the result of a complex interplay between several degrees of freedom, providing a map of the material's behavior. One can understand (and ultimately control) the material's ground state by associating features and regions of the phase diagram, with specific physical events or underlying quantum mechanical properties. The phase diagram of the newly discovered iron arsenic high temperature superconductors is particularly rich and interesting. In the AE(Fe1-xTx)2As2 class (AE being Ca, Sr, Ba, T being transition metals), the simultaneous structural/magnetic phase transition that occurs at elevated temperature in the undoped material, splits and is suppressed by carrier doping, the suppression being complete around optimal doping. A dome of superconductivity exists with apparent equal ease in the orthorhombic / antiferromagnetic (AFM) state as well as in the tetragonal state with no long range magnetic order. The question then is what determines the critical doping at which superconductivity emerges, if the AFM order is fully suppressed only at higher doping values. Here we report evidence from angle resolved photoemission spectroscopy (ARPES) that critical changes in the Fermi surface (FS) occur at the doping level that marks the onset of superconductivity. The presence of the AFM order leads to a reconstruction of the electronic structure, most significantly the appearance of the small hole pockets at the Fermi level. These hole pockets vanish, i. e. undergo a Lifshitz transition, at the onset of superconductivity. Superconductivity and magnetism are competing states in the iron arsenic superconductors. In the presence of the hole pockets superconductivity is fully suppressed, while in their absence the two states can coexist.Comment: Updated version accepted in Nature Physic

Reciprocity as a foundation of financial economics

This paper argues that the subsistence of the fundamental theorem of contemporary financial mathematics is the ethical concept ‘reciprocity’. The argument is based on identifying an equivalence between the contemporary, and ostensibly ‘value neutral’, Fundamental Theory of Asset Pricing with theories of mathematical probability that emerged in the seventeenth century in the context of the ethical assessment of commercial contracts in a framework of Aristotelian ethics. This observation, the main claim of the paper, is justified on the basis of results from the Ultimatum Game and is analysed within a framework of Pragmatic philosophy. The analysis leads to the explanatory hypothesis that markets are centres of communicative action with reciprocity as a rule of discourse. The purpose of the paper is to reorientate financial economics to emphasise the objectives of cooperation and social cohesion and to this end, we offer specific policy advice

Observation of two new L4 Neptune Trojans in the Dark Energy Survey supernova fields

We report the discovery of the eighth and ninth known Trojans in stable orbits around Neptune's leading Lagrange point, L4. The objects 2014 QO 441 and 2014 QP 441 were detected in data obtained during the 2013-14 and 2014-15 observing seasons by the Dark Energy Survey, using the Dark Energy Camera (DECam) on the 4-meter Blanco telescope at Cerro Tololo Inter-American Observatory. Both are in high-inclination orbits (18.8 ∘ and 19.4 ∘ respectively). With an eccentricity of 0.104, 2014 QO 441 has the most eccentric orbit of the eleven known stable Neptune Trojans. Here we describe the search procedure and investigate the objects' long-term dynamical stability and physical properties

Mapping and simulating systematics due to spatially varying observing conditions in DES science verification data

Spatially varying depth and the characteristics of observing conditions, such as seeing, airmass, or sky background, are major sources of systematic uncertainties in modern galaxy survey analyses, particularly in deep multi-epoch surveys. We present a framework to extract and project these sources of systematics onto the sky, and apply it to the Dark Energy Survey (DES) to map the observing conditions of the Science Verification (SV) data. The resulting distributions and maps of sources of systematics are used in several analyses of DES–SV to perform detailed null tests with the data, and also to incorporate systematics in survey simulations. We illustrate the complementary nature of these two approaches by comparing the SV data with BCC-UFig, a synthetic sky catalog generated by forward-modeling of the DES–SV images. We analyze the BCC-UFig simulation to construct galaxy samples mimicking those used in SV galaxy clustering studies. We show that the spatially varying survey depth imprinted in the observed galaxy densities and the redshift distributions of the SV data are successfully reproduced by the simulation and are well-captured by the maps of observing conditions. The combined use of the maps, the SV data, and the BCC-UFig simulation allows us to quantify the impact of spatial systematics on N(z), the redshift distributions inferred using photometric redshifts. We conclude that spatial systematics in the SV data are mainly due to seeing fluctuations and are under control in current clustering and weak-lensing analyses. However, they will need to be carefully characterized in upcoming phases of DES in order to avoid biasing the inferred cosmological results. The framework presented here is relevant to all multi-epoch surveys and will be essential for exploiting future surveys such as the Large Synoptic Survey Telescope, which will require detailed null tests and realistic end-to-end image simulations to correctly interpret the deep, high-cadence observations of the sky

Stellar kinematics and metallicities in the ultra-faint dwarf galaxy Reticulum II

Based on data obtained from the ESO Science Archive Facility under request number 157689

Observation and confirmation of six strong-lensing systems in the Dark Energy Survey Science Verification data

We report the observation and confirmation of the first group- and cluster-scale strong gravitational lensing systems found in Dark Energy Survey data. Through visual inspection of data from the Science Verification season, we identified 53 candidate systems. We then obtained spectroscopic follow-up of 21 candidates using the Gemini Multi-object Spectrograph at the Gemini South telescope and the Inamori-Magellan Areal Camera and Spectrograph at the Magellan/Baade telescope. With this follow-up, we confirmed six candidates as gravitational lenses: three of the systems are newly discovered, and the remaining three were previously known. Of the 21 observed candidates, the remaining 15 either were not detected in spectroscopic observations, were observed and did not exhibit continuum emission (or spectral features), or were ruled out as lensing systems. The confirmed sample consists of one group-scale and five galaxy-cluster-scale lenses. The lensed sources range in redshift z ˜ 0.80--3.2 and in i-band surface brightness i SB ˜ 23--25 mag arcsec-2 (2" aperture). For each of the six systems, we estimate the Einstein radius theta E and the enclosed mass M enc, which have ranges theta E ˜ 5"--9" and M enc ˜ 8 × 1012 to 6 × 1013 M &sun;, respectively. This paper includes data gathered with the 6.5 m Magellan Telescopes located at Las Campanas Observatory, Chile

QCD and strongly coupled gauge theories : challenges and perspectives

We highlight the progress, current status, and open challenges of QCD-driven physics, in theory and in experiment. We discuss how the strong interaction is intimately connected to a broad sweep of physical problems, in settings ranging from astrophysics and cosmology to strongly coupled, complex systems in particle and condensed-matter physics, as well as to searches for physics beyond the Standard Model. We also discuss how success in describing the strong interaction impacts other fields, and, in turn, how such subjects can impact studies of the strong interaction. In the course of the work we offer a perspective on the many research streams which flow into and out of QCD, as well as a vision for future developments.Peer reviewe