The Physics of Wall Street: a brief History of Predicting the Unpredictable

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delbrot hid from the nazis during World War II.) Sornette performed 
extremely well on his exams and was admitted to the most prestigious 
of the grandes écoles, École normale Supérieure.
He received his doctorate in 1981, at the young age of twenty-four
— and was immediately given a tenured position at the University of 
nice. His earliest work was in an area of physics known as condensed 
matter — the study of matter under extreme conditions. But he began 
to branch out the following year, when he began his obligatory mili-
tary service. He spent these years working at a government military 
contractor called thomson-Sintra (keeping his academic position all 
the while). It was during this period, working on research for the mili-
tary, that Sornette first began to study chaos theory and complex sys-
tems, subjects that would later provide much of the foundation for his 
interdisciplinary work.
In June 1986, Sornette married a young geophysicist named Anne 
Sauron. At the time she was a Phd student in orléans, interested in 
geophysics, but after their marriage she moved to nice, where Sornette 
was already established. Shortly after their wedding, Sornette secured 
funding for his new wife to join his research group, with him as her 
doctoral advisor. they focused on connecting the work Sornette had 
begun on ruptures to questions concerning the cause of earthquakes.
Although Sornette was officially Sauron’s advisor, their work was re-
ally a collaboration between experts in different fields. He didn’t know 
the first thing about earthquakes when they began working together 
(she, meanwhile, didn’t know anything about material rupture). But 
Sornette was a quick study. together, they began to think about ap-
plying fractal geometry to the study of tectonic plates, sections of the 
earth’s crust that slowly creep around the planet. tectonic plates were 
originally proposed to explain the strange evidence that the continents 
were once connected — for example, certain varieties of plant are 
found only in western South America and eastern Australia — but they 
are now believed to be responsible for things like earthquakes (which 
occur when two plates collide or shift past one another), mountain 
ranges (which form when the plates collide, buckling at the collision 
site), volcanoes (which erupt at the interface between plates, where 
magma from below the crust can escape), and ocean trenches (the op-

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posite of mountain ranges). the Sornettes’ work was an attempt to 
understand how the current geology and topography of the divide be-
tween Asia and India — a stretch of land as long across as the conti-
nental United States, spanning the Himalayas and a handful of smaller 
mountain ranges — could arise as a result of many small earthquakes 
over millions of years, as the two continents collided with one another.
Geophysicists study a broad swath of topics concerning the inter-
nal structure of planets. But their bread and butter, the research that 
gets funding agencies most excited, is predicting natural disasters like 
earthquakes and volcanoes. earthquake prediction is a matter of par-
ticular importance, for both scientific and humanitarian reasons. It is 
also famously difficult, though this hasn’t stopped scientists, and be-
fore that philosophers and astrologers, from trying their hand. the 
ancient roman historian Aelian, for instance, hinted that animals 
could accurately predict earthquakes, claiming that snakes and wea-
sels evacuated the Greek city of Helice a few days in advance of an 
earthquake that devastated the region. An ancient Indian astrologer 
and mathematician named varahamihira believed that earthquakes 
could be predicted by looking for particular cloud patterns.
In the 1960s and 1970s, the United States and the Soviet Union 
launched competing earthquake prediction initiatives, showering 
geophysicists with funds. these programs led to claims that anything 
from electrical storms to increased radioactivity to an absence of 
earthquakes could be used to predict future disasters. But the state of 
the art, especially in the mid-1980s, was not much better than it was 
when Helice succumbed in 373 b.c. (Indeed, both animal behavior 
and earthquake clouds remain on the list of active research programs, 
even today.) the ability to accurately predict earthquakes is a kind of 
holy grail.
Sornette began his collaboration with Aérospatiale in 1989. that 
same year, he and Sauron published a paper connecting self-organiza-
tion, the idea behind the theory of ruptures he had been developing, 
to earthquakes. the analogy was quite close: the earth’s crust could be 
understood as a material capable of rupture; a theory that described 
rupture in something like Kevlar could also, in principle, describe 
rupture in something like rock. the last step was simply to view cata-
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t h e p h y s i c s o f wa l l s t r e e t

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strophic earthquakes as critical events, ruptures at the interface be-
tween tectonic plates. It was not the very first paper to link the ideas 
of self-organization, criticality, and earthquakes. But it was close. And 
it set the stage for Sornette to think of his two parallel projects — pres-
sure tanks and earthquakes — as closely connected.
the moment of inspiration came two years later, in 1991. By this 
time, he and others had developed a detailed model for how fractures 
and cracks percolate through a material. this model accounted for 
how degrees of organization and coordination could serve to amplify 
fractures, to turn small causes into large effects. It was while thinking 
about this model that Sornette realized that if all of the pieces were in 
place for a critical event, an explosive rupture, the way in which the 
fractures leading up to the rupture would multiply would be affected. 
the idea was that a rupture would be preceded by smaller events, fol-
lowing a very specific, accelerating pattern. this pattern is called log-
periodic because the time between the smaller events decreases in a